A bookstore with soul
Most in the sustainable sector are familiar with Better World Books - the social enterprise, the online bookstore with a soul started by three college students seeing an arbitrage in the market for used books.
As a social enterprise, Better World Books (BWB) has produced impressive statistics: $13 million raised for literacy and libraries, 6.5 million books donated, and over 91 million books reused or recycled. But most of us are not, however, familiar with the business strategy of BWB, of how BWB is scaling its profit and impact. Very few social enterprises can say they are more than a novelty in their industry much less a force in their market. BWB is beginning to reach that status in its industry.
Being named one of Inc 5000’s fastest growing companies four years in a row and listed as a top eRetailer by Internet Retailer does not happen by accident. There is a successful strategy and execution at work. Andy Perlmutter, the President and CEO of Better World Books, says that the company’s business strategy is essentially the same as it was established by its college student founders.
He describes the basic strategy, saying, “There is stuff in the world whose value has run its course in the hands of the people who own it. In some cases, this stuff has negative value, taking up space, maintenance– the cost of ownership. But this stuff has value for someone else if the stuff can be marketed and delivered in an efficient manner.”
The company’s strategy has a number of components:
Potential for Arbitrage. BWB found a product with an arbitrage between the value of the people who own the product currently and people who have need of the product in the future. Used books.
Virtuous Supply Chain. BWB receives most of its inventory from college book drives and from academic public libraries. Once sold, the company donates a percentage of the sale to literacy non-profits of the donor’s choice while also raising funding for campus organizations and its library partners. It is a virtuous cycle. All of the constituencies in the value chain gain both economic and intangible benefits in their interaction with BWB and are aligned along a common vision for literacy improvement.
Values-driven Consumers. BWB serves a fast-growing segment of consumers who want to “vote with their dollars” for causes they believe in. They want to align their purchasing decisions with their values. In addition to raising funds for literacy through every sale, BWB has established a “Book for Book” promise where it donates a book to someone in need for every book purchased on BetterWorldBooks.com.