Rare Book Monthly
Articles - September - 2005 Issue
What Is happening At Abebooks?
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Meanwhile, other sites, especially the major ones, relied on commissions for income. Abe's major competitor, Alibris, employed a sizable commission at the time, 20%, but no listing fees. As the major new book sites like Amazon and Barnes and Noble joined the old book fray, they too used commissions. Then there was eBay, which also sells books, and did so on a commission basis. While Abe's fixed fees were very reasonable, commissions still had the advantage of providing dealers with totally free listings. They did not have to pay a penny unless the site made sales for them. The commission structure is more favorable to booksellers if sales are low, while the fixed fee is more advantageous if the bookseller is making a lot of sales.
As internet bookselling became the norm, rather than a new invention, people began making many if not most of their book purchases this way. Abe must have felt a tinge of regret with its formula. Fixed fees were great when sales were low, but as sales grew, the company must have become a bit envious of those who used a commission structure. Sites using commissions would be experiencing rapid growth of income as sales grew, while Abe's income stream would have remained relatively flat since its fees were fixed. They would have enjoyed some growth in sales based on increased listings, but Abe was not participating in the larger growth resulting from increased sales.
Finally, a couple of years ago, Abe decided it was time to share in the income generated by its sales. For the first time, they instituted a commission structure, a tiny 3% at first, to be charged in addition to the fixed fees. Since then, Abe has had several increases in the commission pricing. I do not know what percent of Abe's income today comes from commissions versus fixed fees, but I suspect most now comes from commissions, and if not, doing the math of sales and average prices and commissions tells me that Abe's intentions are that this will soon be its major source of revenue.
However, even as Abe was moving to a style of business more like that of Alibris than their original formula, their method of selling remained more suitable to the original formula (interestingly, Alibris has now added Abe-style fixed fees to its pricing structure while reducing commissions). Here is the difference. Alibris provides a complete selling package. The bookseller, in effect, turns over all selling responsibility to Alibris, for which it receives a commission. What Alibris really is here is a retail store, and the booksellers are the behind-the-scenes suppliers. Alibris' "commissions" are effectively the difference between the retail and wholesale prices. Alibris is more like Wal-Mart than like Abe. They buy books from wholesalers (aka booksellers) at one price, and sell them to their customers for 15% more, the retail price. The bookseller remains hidden in the background and does not participate in the sale, only shipping the book to the retail customer once Alibris has completed the sales transaction.
