Episode 7: Andy Hunter on the Role of Independent Bookstores and the Need for Innovation

In this episode, Joshua talks with Andy Hunter, Founder & CEO of BookShop.org. Andy started BookShop out of a concern for the future of independent bookstores. As Amazon has grown and taken a larger share of the online book selling market, publishers have become more dependent on that one store. BookShop aims to give more power back to indie booksellers and to publishers, by providing a convenient platform both for bookstores and for consumers to use, and by providing access to an affiliate program that pays 10% of the sale price of a book.

Andy talks about his reasons for starting BookShop, and reflects on being surprised at just how many readers are willing to forego buying books at Amazon in order to support their local bookstores. He also talks about what metadata would most help him as a bookseller to sell more books, calling out specifically the need for a higher-level categorization system that is more consumer-friendly than BISAC and the need for more options around book spreads and samples for complex books.

Finally, Andy talks about where he sees hope for the future in publishing. He appreciates that he is seeing more focus on innovation and more understanding of the need for a diverse ecosystem and more consumer choice. Innovation, though, is still lacking; for example, the use of proprietary DRM makes it hard for consumers to read their ebooks wherever they want. There is a chance that the industry will be more supportive of innovators and of new ways of book selling, but there are some potential roadblocks to that hopeful future. Andy also expresses concern about the fracturing of the market with more publishers focusing on direct-to-consumer options instead of focusing support on current book selling options like indie bookstores. 

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Transcript

Joshua Tallent 
Hello, and welcome to the book smarts podcast where we talk about publishing data and technologies and send you away with some insights that will help you sell more books. I’m your host, Joshua Tallent. This week on the BookSmarts Podcast, I’m very happy to have Andy hunter who is the founder and CEO of BookShop.org joining me. In addition to being the founder and CEO of BookShop, he’s also the co-founder and the publisher of Catapult Press, the co-creator and the publisher of the websites Literary Hub, Crime Reads, and Bookmarks, and the co-founder and chairman of Electric Literature. So needless to say, Andy is a very busy person. Andy also received the Industry Innovator Award from BISG at our annual meeting last month. And for many of you who may not know BookShop.org, it’s a book selling platform with a mission to financially support independent bookstores. It’s a B Corp, which is a corporation that puts their mission and the public good above their financial interests. So Andy, thanks a lot for joining me this week.

Andy Hunter 
Thank you for having me.

Joshua Tallent 
All right. So we’re going to talk a little bit about publishing a little bit about book selling. I really think it’s interesting that you made that leap from publishing into book selling, and granted, you’re still a publisher, but you have made that leap to a bookseller, not just for yourself, but for everyone else, for other publishers as well. So tell me a little bit about the reason why you decided to start BookShop. What was the impetus? How has that experience been for you, changing from being a publisher to now being a publisher and a bookseller?

Andy Hunter 
Yeah, well, the reason was just concern about the future of the industry. You know, I always am trying to think about what’s going to happen in the future. And with an eye towards preserving the things that I value. And in this case, you know, literary culture and the culture around books and the effect and importance books have in our society. And over the past, since about 2009, I’ve been a little worried about Amazon kind of eating the world and particularly eating the book world. And even back in 2011/2012, I had a few meetings with the idea of putting creating a nonprofit, online bookseller that would benefit independent presses and independent bookstores to kind of offset Amazon’s growing dominance of the online book selling industry. And then there wasn’t any appetite then, people didn’t understand the need for it. I had a few people who were in charge of grants at various foundations express a lack of interest in funding something like that. Maybe it was too commercial, to get involved in commerce in general. But that was back when Amazon was maybe 15-20% of the book selling world and now it’s over 50%, possibly 60% after the pandemic. And I just watched as nobody did anything about it. I just watched as bookstores’ margins got smaller, I watched as the physical book selling at retail went from about $18 billion a year in the US to about $10 billion. And I watched as Amazon became more and more important to publishers. And eventually, it just became clear that nobody was going to try to do anything about it. There was no meaningful competition, and there was no innovation happening that would help, particularly help shore up independent local, brick and mortar bookstores, against Amazon and help them retain their audience when it came to e-commerce, which I think is really important. Like it is really hard to imagine a future where a small business cannot engage in e commerce all and still thrive. Particularly in retail, where e -commerce is growing by like, sometimes 11-13% year-over-year as a portion of total retail. So I just wanted somebody to do something. Nobody was doing anything. So I figured, well, I’ll take a shot, which was kind of ridiculous. I felt very unqualified, and like there were a lot of people who were smarter than me with better skills than me who could be taking it on, but then in the end, I just was like, well, you know, you lose every shot that you don’t take so I might as well try to you know, try to do something. So that’s what really caused me to do it, is just feeling like if nobody does anything, we’re going to end up with a landscape that’s missing bookstores most of the places in the country. Strong bookstores would survive, bookstores that have the resources to do e-commerce well and have websites and, you know, are good digital marketers, good at creating mailing lists and social media and keep their customers engaged, those stores will do fine. There’s maybe 200-250 stores like that, the rest of the stores might be living on borrowed time. Amazon’s growing at 60% year over year, so that puts them at 80% of the market at the end of 2025 if nothing happens, to change the trends. So yeah, I’ve talked about it a lot. But simply put, bookstores are really important for discovery, they’re really important for growing careers of new writers, they’re really important for a diverse ecosystem around books, they’re really important for keeping books important in their communities, for introducing children to love of reading, to connect authors with readers, they’re essential to the culture around books, and I think a lot of people and organizations in the industry are really not being as alarmed as they should be about the idea of of those resources going away. Every single one of them is an advocate for the importance of books in our culture. And if we let them just be disrupted, and become like just a nostalgic thing of the past, except for some big urban stores, then we’re going to lose a lot more than 2,000 bookstores, we’re gonna lose a lot of advocacy, constant advocacy and discovery for books. So yeah, I’m gonna try not to preach too much in this podcast. But that’s why I started BookShop. You know, it just seemed like a worthwhile thing to do. You know, and I guess the other thing I’ll mention is that, as an online publisher, LitHub and ElectricLit, I had a lot of pressure to earn revenue, I wanted to make revenue in any way I could. But a lot of revenue from online publishing comes from affiliate links. On average 20% of the budget of any online media, whether it’s Conde Nast, or Meredith, or Hearst, or what have you, but 20% of their budgets are coming from affiliate sales. They link somewhere, talk about a great cast iron skillet, click on the link to the cast iron skillet, you buy it, the retailer gives a kickback to that publication. For books, there was only one affiliate program out there: Amazon’s. And Amazon was giving four-and-a-half percent of every book that was sold. So the New Yorker to Time Magazine to BuzzFeed. Anytime you read about a book online, there’d be a link to Amazon. That’s creating like this funnel. That’s as wide as the internet and all us book lovers, every time we want to read an author interview, every time we want to read a book review, we get pushed to Amazon to go buy that book. That in itself was like such a massive competitive advantage of Amazon’s. And yet it was also helping sustain the discourse around books. Well, we need the discourse around books. It’s not like publishers are advertising. Now I’m really going to rant, but publishers are advertising with Facebook. They’re advertising with Amazon Marketing Services (AMS). That’s where all their marketing dollars are going. The marketing dollars are not going to the New York Review of Books anymore. They’re not going to newspaper book sections. They’re not going to Time Magazine. That’s not where publishers are spending their ad dollars. How are those publications going to support themselves, just like you need independent local bookstores in their communities. You also need the media to be covering books and talking about books for book culture to be thriving. So if Amazon is the only place that’s paying to support those publications through their affiliate program, that’s a big problem too. And so that was the flip side of the coin. First of all, independent bookstores need to be earning more revenue through online sales and they and that’s going to be even more important in three years than it is today. Second of all, publications need support for writing about books. And if Amazon is the only place that they can get it that’s a big problem. So creating BookShop was supposed to fix those two problems. 1) Help bookstores that didn’t have the resources to sell well online, and 2) help publications that relied on affiliate revenue to have an alternative that supported independent local bookstores.

Joshua Tallent 
That’s great. Yeah. And you’ve seen a lot of success. So you launched right before the pandemic. It’s like, this was perfect timing, unbeknownst to you. You started right at the end of January 2020. And since that time, you’ve made a ton of sales, you’ve converted a lot of those other sites to using your affiliate program now. So if you look back over the last year, what are some of the lessons and experiences that you’ve had? What are some of the things that you’ve learned in making that jump into book selling, and diving feet first in and kind of hoping for the best? What are some things that you’ve learned that you’re like, wow, I really wish that other people knew about this, or I wish that I had done this thing before I started this venture.

Andy Hunter 
Yeah, that’s, it’s a really good question. Um, well, I think the heartwarming thing that I learned is how much people are willing to rally around their local stores and how much they care, especially big readers, and books are something that are core to people’s identities. They’re not something that people casually engage with. I mean, some people are, but the customers that shop at local indies or care about local bookstores are people who really care deeply, and they’re the kind of people who will go out of their way to support local stores. And that, you know, is something that I had a theory about before we launched, but I didn’t know for sure. And in fact, I was hustling all around town trying to get people to invest in BookShop before it launched. And almost everybody said, No. And they all said no, because you can’t beat Amazon on price. And you can’t beat Amazon on efficiency. So you’re dead in the water. And I was like, I really think that there are people out there who care about other things besides price. And so that was validated. And so that’s something that I learned, that I suspected and I learned was definitely true. We have, at this point, about 1.4 million customers, that’s a lot more than I thought we would have, in our first 14 months. In fact, I remember distinctly in January of 2020, waking up at three in the morning, and for some reason my brain decided it was time to count how many customers we would need in order to not go out of business. And so I was like, Alright, how many customers do we need based on average, you know, by purchase of six books a year, how many people and you know, we’ve got, I only had raised $750,000, we didn’t have much money, and it was all going into building the software. So it was like almost no runway, once we launched and we need about 195,000 to 250,000 customers to make this thing work, or else we’re going to burn out really like within eight months. And then at three in the morning, like how the hell are we going to get 250,000 customers? Like, that’s impossible! How is that going to happen? And then I was like up for the rest of the night just convinced that it was a complete folly, and I like was doomed to fail. But fortunately, that, you know, midnight anxiety didn’t come true. There are a lot of people who are willing to support their local stores. And so that’s great. That’s something that I’ve learned is true, I think we can do a lot more, you know. The goal of BookShop is to take customers from Amazon, not to touch the customers that are already in the indie channel. And that’s another thing I’ve learned which is positive is that for every customer that goes out of their way to buy from an indie right now, there are at least 20 people who are sitting around feeling kind of guilty being like, Oh, I know, I shouldn’t buy on Amazon, but it’s just so simple, whatever, I got a Prime account, you know, and that and they just do it out of habit, or laziness. And, and so I discovered that you can get a lot of those people off the fence if you just make it super easy, and kind of just teach them that they can change their habits a little bit. It’s just as easy and make them feel good about themselves when they do it. So that’s another thing is to kind of keep in mind as we try to change the world for the better is that there are a lot of people who can be broken out of negative habits, as long as you make it simple and clear for them.

Joshua Tallent 
Yeah, that’s great. So I have a question for you that I don’t know if you’ve even thought about it before. But we talk a lot here on the BookSmarts podcast about data, and about metadata, product data around publishing. And there’s a lot of value in that product data. Lots of studies have been done that show that the better quality data a publisher pushes out the more likely a book is to sell, the more units it sells. I’m curious if you’ve been looking at any of the product data that you’re pulling in, I know you get a lot of that data or most of it from Ingram. But I’m wondering if you’re looking at that, and giving recommendations or have any recommendations for publishers, as a bookseller about what will help you sell more books? What kind of data are you not seeing enough of? Do you want more book excerpts? Do you think the book descriptions are too small? What kinds of things are you seeing in the product data that you think, well, if publishers could do these things, then that would help me sell more of their books?

Andy Hunter 
Yeah, that’s a really good question. For me, personally, I had to spend about two days kind of building a hierarchy of BISAC codes that would translate well to customer preferences. For example, you know, I want to create a system where a customer can get a normal amount of options to check, like, what I’m what kind of books I’m interested in. And so you got categories like fiction, that might have, you know, 200 different possibilities. And the roll up, if you just choose the first level of BISAC, will just be fiction, and then the next level is extremely complex. So this is more like, for the world of BISACs, I wish that there was some top level categorization of 20 to 40 categories, they would be very useful. That is more for the common folk, or just like I like thrillers, or I like literary fiction, you know. I think that for visual books, and for children’s books, and really, for any book, the ability to look inside and browse inside is really important. But particularly for kids books, and visual books. And right now, in the US, at least, there is no good solution for it. There’s a number of places or tools which you can use to render ebooks. So if somebody wants to read the first 10 pages of a novel, you can do that pretty simply online. But if somebody wants to see the first 10 pages of a designed book, like a cookbook, and we want to be able to do that for a number of publishers, not just the publishers that are taking the trouble to put those spreads in their ONIX feeds, which are, I think, a minority, then it becomes much more complicated. And so we’re probably going to build something ourselves. In the UK, they’ve got some more robust options where publishers have opted into programs, and that allows them to embed content on the sites that allow readers to browse. But right now, it’s really difficult to do that in the US. So we’re gonna have to build it ourselves. And then we’re gonna have to get publishers to feed us spreads and content samples and rich content that we can put in those previews. So I guess, if I have one metadata wish for the future is that it’ll just be part of publishers workflows, especially visual publishers, to figure out the best way to provide samples in their ONIX feeds. And so that the samples can be quickly and easily rendered. And I’m not talking about like big, heavy PDFs, but something that is image-optimized, and, you know, won’t cause a website to fail all of Google’s Page Experience metrics, and all of that. So that’s where what this is, those are my two data wishes, and I’m not a total like, data person. So these are really based on real world needs. But some kind of hierarchy that is more intuitive than just BISACs that kind of can be layered on top of BISACs is number one, and number two is rich content and spreads and ONIX feeds so that they can be so you can easily create a preview.

Joshua Tallent 
Those are actually probably some of the best suggestions that I’ve heard, and it’s good to get a booksellers perspective, you know, you’re the one selling the book, you’ve got ideas for how you can sell more and how you can get more people interested in titles. And it makes a ton of sense to make sure that they can very easily find what they want to find, what they’re looking for. So we’ve talked a little bit about in the past about looking forward to the future and some reasons for hope. So if we took a snapshot of where we are right now: obviously Amazon is getting bigger, and there’s a lot of pressure for independent booksellers to start selling more and being more active. What do you think, if you look at the publishing industry as a whole, where do you think we’re seeing some reasons for hope in the industry? And if you’re looking 10 years down the road or something, what do you think we’re going to see in the future, to make us feel just a little bit better, hopefully about the direction that we’re headed down right now?

Andy Hunter 
Yeah, well, I can’t say I’m super optimistic. I mean, when I, like, I’m doing all this stuff, like Literary Hub has a ton of readers, I don’t have as much time as I wish I had for Literary Hub these days, but it’s got 25 million readers a year. That’s a lot of people who are engaging content about books. BookShop has a lot of customers. But added up is it enough? It’s not nearly enough. It’s like trying to hold together a crumbling building with like spider webs. So you need to have major players, you need to have like the Penguin Random Houses of the world, to be supporting innovation, and you need to have the Ingram’s of the world to be supporting local bookstores. And the signs of hope are that it seems like many of them are beginning to recognize the importance of doing more. They’re getting slightly better terms. Signs of hope are like the Author’s Guild will be very gung ho about having a conversation about the importance of supporting a diverse ecosystem and fighting back against Amazon. And I don’t think that they were having those conversations 10 years ago. It all has to happen soon, you know, it’s a lot like global warming or something like that, where, like you, people are waking up, there are signs, positive signs that people understand what the stakes are, and that they’re willing to do more to prevent a future that, you know… I don’t know how dystopian—if you’re Prime customer, and you love Amazon, and maybe a world where Amazon sells 80% of the books in the US is not dystopian, but for most of us, I think, is not going to be a good outcome. So there are more people who are aware of that possibility or taking it seriously, and we’re having the right kind of discussions. What I want to see more of though, is just more industry support for innovation. I don’t see a lot of it, you know. It’s, for example, really hard to buy an ebook from anybody besides Amazon and read it on a Kindle. Well, people who own Kindles prefer to read it on their Kindle, that’s, that’s their, that’s the way that they want to read, they might be interested in buying a book from an independent bookstore, an ebook from an independent bookstore. But if 70% of people who read books, or 80% of people who read ebooks, are reading on a Kindle, that’s what they want to read on. A lot of publishers don’t allow you to buy a book from anywhere except for Amazon and read it on a Kindle. Also, I know that if I buy an ebook from some publishers, I can send it to my Kindle using my Kindle email address. But I buy an ebook from Penguin Random House, I cannot send it to my Kindle using my Kindle email address. And I’m not saying that publishers should necessarily give up on DRM or whatever. I’m just saying that publishers should just be like, this is a problem. We want to foster innovation to solve the problem rather than just being like, that’s the way things are. And that’s just one example of many different ways that publishers can foster innovation. I mean, BookShop—this is self serving, and I admit it, but BookShop is the most successful thing to happen for online book selling benefiting the Indies, since IndieBound, and IndieCommerce was launched by the APA. So that was over 10 years ago. So we can say like, this is the biggest thing that’s happened in 10 years. Does that mean that we’ve had huge industry support? Not really, not from publishers. They might add a BookShop link along with their buy options, but not that much considering how much more we could do. We’re just one example of innovation. I’ve also seen a lot of innovative companies go out of business, or I’ve seen them get acquired by companies like Amazon and all that. So I know I’m supposed to be being optimistic. So what I’m gonna rephrase that is that I feel like there’s a chance that now that people are kind of seeing what’s going to happen in the future, that publishers will be more backing of innovators than they have been before, and more willing to bring people in and work with their internal staff and external companies, and try to figure out new ways of doing bookselling in ways that support the industry rather than disrupt it. Because like, one worrisome solution to Amazon’s dominance that I think some publishers are looking at is like, oh, if Amazon’s gonna be so dominant, we have to create our own direct channel to customers. So rather than saying, like, we need to work with more indies and strengthen that, or even saying, we need to work more with Barnes & Noble and strengthen that relationship, and so Barnes & Noble doesn’t go away. They’re saying we need to find a way to sell directly to customers so that we circumvent Amazon that way. Well, that’s not, you know, I don’t think that that’s the right kind of long-term solution, I don’t think they’re going to beat Amazon at direct-to-customer. And I think that that’s just another, it’s just another way that publishers are now competing with the Indies that they need to, they need to rely on to kind of keep the ecosystem healthy. So it’s good and bad. You know, there’s a lot of reasons to be worried. But at least people waking up to the importance of grappling with this issue and seeing some organizations really take it on and some publishers really care and Indies having a bigger voice in the in the media and the press, I think, is a good sign. And it’s a sign that there might be hope. But I also think that there’s only hope if everybody really, really is much more activist than they’ve been before. Like they can’t just sit around and wait for to see how things play out anymore. They have to actively brainstorm and actively engage in behavior change, and encourage things that will help prevent a negative future from happening. So publishers, big publishers need to reinforce Barnes & Noble, they need to get much better terms and margins to Indies. They need to work out their supply chains to make sure that Indies have a great stock of popular titles, all this stuff, I do think they should solve an ebook problem to allow Indies to sell a greater market share of ebooks, audio books, that kind of thing. But I am seeing some, some openness to it and some recognition of the problem. So hopefully that will result in more solutions and more positive action.

Joshua Tallent 
Awesome. Yeah, that’s great. Okay, so we’re out of time. I appreciate you taking some time to chat with me, Andy. Where can people follow you online and follow the work that you’re doing?

Andy Hunter 
Well, you can follow BookShop.org on Twitter, or Instagram, and you can follow me on Twitter as well. I’m not on it too much, but my handle is @AndyHunter777.

Joshua Tallent 
Well, that’s it for this episode of the BookSmarts podcast. If you like what you’ve heard, please leave a review or rating in your podcast app, and also please share this podcast with your colleagues. If you have topic suggestions or feedback about the show, please email me at joshua@firebrandtech.com. Thanks for joining us and for getting smarter about your books!