Rare Book Monthly
Articles - October - 2010 Issue
A1 Books - Down for the Final Count
Bankruptcy auction notice for A1's parent Webnotions, Inc.
At the time, we did a review of the A1 site. Our conclusion was that while the site was fine, we could not see any compelling reason for customers to move from the majors to A1. We felt that they needed to come up with a way to better differentiate themselves, that "me too" would not enable them to seriously challenge the market leaders. Ultimately, while it appears that A1 had a decent base of customers, and some who strongly believed they could obtain the best prices there, they never separated themselves sufficiently to make serious inroads into the listing site market.
A1 still had a few more tricks up its sleeve. It further evolved, becoming one of the "mega-sellers" on sites like Amazon. They flooded the market with low priced books, apparently using automated formulas to assure their prices were the most competitive. The mega-sellers have not always been popular with traditional booksellers, particularly those who specialize in the less than rare variety of books, but it is a niche that several companies have worked with apparent success, at least in viewing them from the outside. Again, we have no way of verifying any of the claims made by or about A1, but we saw statements that they had revenues of $20-$30 million in their peak years, had 2-4 million customers, had 30-40 employees, primarily at their headquarters in Netcong, New Jersey. Whatever their numbers, they were undoubtedly sizable, but as others have learned, you can't make up for losing money on individual sales with volume. The volume may have been decent, but obviously the margins weren't.
Still, A1 continued to try to grow. They added an overstock business to buy up publishers' remainders and overstock, and resell it cheaply. They expanded to selling items beyond books, a la Amazon and Alibris. They again pushed for more listers. They opened a bookselling website in India, and convinced the Times of India to go 50-50 in the venture (which is still active). The "growth" continued almost to the bitter end. Generally, such aggressive attempts at growing are either the sign of a very successful business or one desperately seeking a way to survive. In hindsight, it looks as if A1 Books was in the latter category.
Even as the company was attempting to push forward, it evidently was not doing so well at keeping up with its bills. Last April, some creditors went to court to force the company into involuntary bankruptcy. We don't know how long these problems were brewing, but usually, a company can stave off its creditors for a while as it tries to find a way to resolve its financial issues. A1 must have been struggling for quite awhile. The court at first pushed A1 towards a Chapter 7 bankruptcy. This is not the form that airlines go through every few years, where they are able to pay their old creditors a few pennies on the dollar and re-form as a new company. In Chapter 7, they just sell everything off and the company disappears. It means the court does not believe the company would be viable even if it could wipe its debt off the books for a few cents.
