These days everybody is feeling the pinch of the troubled economy.

With prices for many goods and services rising, far outpacing wages, it has become a struggle for many to afford the basic necessities, let alone find enough cash to buy items not necessary for survival, like books and entertainment...
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These days everybody is feeling the pinch of the troubled economy.

With prices for many goods and services rising, far outpacing wages, it has become a struggle for many to afford the basic necessities, let alone find enough cash to buy items not necessary for survival, like books and entertainment.

But there is good news for the cost-conscious bookworm, said Hector Rivas, chief executive officer for Thrift Books, an Auburn-based, Internet used book seller.

Sitting in his office in the Auburn warehouse – one of four the company operates – Rivas explained one of the reasons his company is thriving in these tough financial times.

“A lot of customers are price sensitive right now, and they’re looking for bargains,” Rivas said. “Because of that, we have a great Web site for them and great products for them.

“Everyone asks me (what we offer that other companies don’t) and I tell them it’s price,” he adds. “Hands down it’s price. You can get a New York Times bestseller delivered to your home anywhere in the U.S. for under four bucks. Within a week we’re lowering our prices even cheaper. Most of our inventory sells for a penny a book. Then it’s just three bucks and change for shipping.”

Rivas first came onboard Thrift Books in 2003, shortly after founders Jason Meyer and Auburn High School graduate Daryl Butcher started the company.

“The original founders met at a church function, and the idea was to start selling used books on Amazon,” Rivas said. “So unlike a traditional brick-and-mortar store, where they had their business and decided to sell on Amazon, they built around selling on Amazon from the beginning.”

Rivas, who had previous sales experience while putting himself through college at Brigham Young University in Provo, Utah, said he soon found himself in charge of procuring books for the fledging enterprise.

“We get our books from a lot of different places,” he said. “We partner with a lot of different libraries. We work with traditional brick and mortar stores like Half Price Books. We also get them from thrift stores. We work with probably 70 or 80 different organizations.

“We negotiate at a higher level, and they send them to us by the truckload,” he added. “It’s not unusual for us to buy up to 2 million books in a single month.”

Originally the company operated out of a storage unit in Kirkland, but soon found itself needing to expand.

“It was four guys and a couple thousand books to start with,” Rivas said.

Soon the company moved to a new space on Mercer Street in Seattle.

“Ironically, the building that we had on Mercer Amazon is ripping down and building their new headquarters there,” he said. “They’re putting that on top of our old building.”

Soon the company outgrew the 24,000 square feet of space in Seattle and found a new 67,000-square-foot home in Auburn.

“We hold about a million books in this warehouse,” Rivas said.

In addition, the company maintains four other warehouses, in Detroit, Portland and Atlanta.

“Each of those holds a million books as well,” Rivas said.

Although statistics are not available regarding used book sales on the Internet, Rivas said that he believes Thrift Books is the largest purveyor of used books online.

“I believe we are the largest distributor of used books on the Internet in the world,” he said. “There is not a company online (selling used books) exclusively that is bigger than us.”

Currently, the company employs almost 200 people nationwide, including the more-than-60 people who work at the Auburn warehouse and corporate headquarters.

And although the company still does the majority of its business through Amazon.com and eBay, Rivas said he hopes that a revamped customer service philosophy will spread the good word about the company’s Web site at www.thriftbooks.com.

“We’ve got a liberal customer service policy that we modeled on Nordstrom,” he said. “Some people may take advantage of that, but I think it’s worth it in the long run.”

Despite the current hunker-down mentality prevalent in many businesses, Rivas said growth is the key word at Thrift Books.

“We’d like to get up to 10 warehouses and 10 million books online,” he said. “Honestly, when a customer thinks of used books, we’d like it to be synonymous with Thrift Books. We’d like for that name to be the first thing that comes to mind.”

For the millions of consumers that used to happily spend ten, twenty, or even thirty dollars or more on a book at the local bookstore, many are now turning to websites like Thriftbooks.com--one of the largest retailers of used online books--where they can enjoy purchasing millions of titles for as little as a single penny...
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Auburn, WA (PRWEB) March 9, 2009 -- For the millions of consumers that used to happily spend ten, twenty, or even thirty dollars or more on a book at the local bookstore, many are now turning to websites like Thriftbooks.com--one of the largest retailers of used online books--where they can enjoy purchasing millions of titles for as little as a single penny. As more consumers seek used books as their new and more affordable entertainment medium, Thriftbooks.com has realized an influx in online sales over the past year.

"Our website was specifically designed for the frugal consumer," states Hector Rivas, CEO of Thriftbooks.com.

Rivas credits the recent rise in sales to the current economic calamity that most consumers are faced with.

"Our prices become more attractive as more consumers continue to cut back on spending," says Rivas.

With the current state of the US economy, most consumers are being very creative in how they approach their own personal entertainment. Many are avidly seeking ways that they can still entertain themselves without having to spend an arm and a leg in the process. This generally means that many people are staying in more, as opposed to going out to eat or to the movies. And, in turn, many are also devising imaginative ways to keep themselves occupied when at home. While at the same time, they are also adhering to a strict budget that can carry them through these temporary economic woes and into a financially brighter future.

For these many strapped consumers that enjoy reading often, Rivas has the best solution for their woes.

"If you love to read, and you are currently pinching pennies--then you've found a new best friend with Thriftbooks.com!"

Thriftbooks.com is currently one of the largest online retailers of used books, with more than 4 million used books in their inventory, and four major distribution centers spread across the United States. These are not just any cheap books either. Most of their books tend to be national bestsellers, like 'Atonement' by Ian Mcewan--which is currently listed on their website for a solitary penny, plus the cost of shipping.

"There are not too many places where you can order a New York Times best seller and get it delivered to your doorstep for under $4," states Rivas. "We've always thought that our business model made sense and would appeal to the everyday reader; books are one of the few products that are not diminished by being used."

Of course, Thriftbooks.com offers a money back guarantee and a price match guarantee, which Rivas says has never been invoked in the company's history because they always offer the lowest prices on used books online.

According to Rivas, the solution to enjoying premium reading for less is simple.

"Why would anyone pay more for a book when the story is the same, whether the book they buy is new, or has been used?"

For more information on Thrift Books, please visit them online at www.Thriftbooks.com.

About Thriftbooks.com

• Has been in business since 2003
• Offers a money back guarantee; if a customer finds a better deal they will match that price
• 40% of their inventory sells for .01 cent, with one of the lowest shipping rates in the industry
• Currently holds four major distribution centers in Auburn, Portland, Detroit, and in Atlanta
• One of the largest online retailer of used books, with more than 4 million used books in their inventory
• Utilizes a signature, proprietary technology to manage massive inventories from four different shipping centers, and to assure that customers receive their orders in a timely manner
• 1st book ships for $3.95, second book thereafter ships for $3.45
• You can enjoy the lowest prices, and the best selection on used books online at: http://www.thriftbooks.com

“What we’re trying to do is provide cheap books for everybody,” said G. Seth Beal, the president and chief operating officer of Thrift Books, which lists three million books and has 180 employees. Beal says he personally loves handling and collecting old volumes, but his business model is based on achieving economies of scale through automation.”...
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Like his novels about the Old West, Larry McMurtry’s memoir “Books” is an elegy for a disappearing way of life. For McMurtry, selling used books was a calling, one that attracted eccentric personalities (like the store owner who hid his best books in paper sacks) and demanded esoteric knowledge, “near to alchemy,” of “editions, variants, points, bindings, provenance, cost codes.” McMurtry especially relishes the tactile aspects of the trade most threatened by the Internet. “What fun is there in clicking,” he asks, “compared to the pleasure of handling a fine copy of a rare book?” ndeed, the state of the art in used-book selling these days seems to be less about connoisseurship than about database management. With the help of software tools, so-called megalisters stock millions of books and sell tens of thousands a week through Amazon, AbeBooks and other online marketplaces. Some sellers don’t even own their wares. They just copy other sellers’ lists and then buy the books as necessary, pocketing the markup (though none acknowledge the practice, since it is banned on most commercial sites).

To small sellers like Joe Orlando of Fenwick Street Used Books and Music in Leonardtown, Md., megalisters treat books as “simply a widget that they can make a few bucks on.” The megalisters — a name originally intended as a term of abuse but now accepted by the accused — don’t quite disagree. “What we’re trying to do is provide cheap books for everybody,” said G. Seth Beal, the president and chief operating officer of Thrift Books, which lists three million books and has 180 employees. Beal says he personally loves handling and collecting old volumes, but his business model is based on achieving economies of scale through automation.

Thrift Books acquires its stock literally by the ton, usually from libraries, secondhand stores and charities. Employees enter each book’s SBN code into the company’s inventory, then post the book for sale on Amazon and other marketplace Web sites, using software to determine the price in relation to the competition. It isn’t just a matter of beating the lowest price. Sellers can adjust a set of variables — specifying a price floor, for instance, or ignoring competing stores with poor customer ratings — to come up with their own algorithmic “secret sauce,” explained Marc Fournet, the director of business develop­ment at FillZ, an inventory and pricing service.

Because of the sophistication of the software, automated pricing doesn’t necessarily lead to a race to the bottom. Still, many popular books can be found on Amazon for a penny — including “The MacGregor Brides,” by Nora Roberts; “The Bourne Ultimatum,” by Robert Ludlum; and six of the other 15 titles on The Times’s paperback fiction best-seller list from a year ago. The trick, according to a recent cate-list in the trade magazine Fine Books & Collections, lies in the shipping allowance ($3.99 at Amazon), which lets an exceptionally efficient seller squeeze about 75 cents out of a transaction. Achieving that efficiency isn’t easy. With 13 employees and an inventory of more than 140,000 books, Harvest Book Company is on the threshold of megalister status, but Eugene Okamoto, the company’s president, says he hasn’t yet pushed costs down enough to make a profit from penny books. “That’s the holy grail,” he said.

Though the rise of the megalisters has hurt many mom-and-pop operations, the toll has been less than catastrophic. A database maintained by Susan Siegel of Book Hunter Press lists 3,968 “open shops” — as brick-and-mortar outlets are known — across the United States today, down from 4,119 in 2002. A 4 percent drop over six years might not be something to cheer about, but it would seem downright enviable to record or video store owners. What method are the smaller used-book sellers using to survive? “Hit ’em where they ain’t” by turning the labor-intensive “hand selling” approach into an advantage, says Gene Alloway, the co-owner of Motte & Bailey, Booksellers, in Ann Arbor, Mich.

The new strategy involves a selective embrace of e-commerce, focused mainly on a category of book that scarcely existed before the Internet — books you might call “rare but not collectible.” These are books sought after not as artifacts or for resale value, but for their content — often concerning subjects with appeal to fervent communities of interest. If you absolutely have to have Joseph C. Lisiewski’s “Kabbalistic Handbook for the Practicing Magician” right away, what else can you do but shell out the $149.50 for the cheapest of the three paper­back copies available on Amazon? (The other two are priced at $349.19 and $349.89.) Before the Internet, a magic aficionado would almost certainly not have found that copy of the “Kabbalistic Handbook” in his local store, nor would the seller have known to set the book’s price so high.

This segment of the market is not insubstantial. A recent search on Amazon, sorting by year, genre and price, turned up 99 biographies with paperback editions published in 2000 selling for over $100, including “Seth Green” ($201.88 and up), Elina and Leah Furman’s “unauthorized biography” of the actor who played Dr. Evil’s son in the “Austin Powers” movies, and “Without You” ($290 and up, with a CD), Dan Matovina’s group portrait of the Welsh power-pop band Badfinger.

In some cases, less obscure used books will also become extravagantly expensive. “Before the Storm,” Rick Perlstein’s 2001 book on Barry Goldwater and the rise of the conservative movement, was selling in July for prices above $130. “The original publisher took the book out of print quite prematurely,” Perlstein explained in a comment to a blog post on the subject.

A hand seller like Joe Orlando of Fenwick Street is doing much of his online business in this mid-to-high range. On Biblio.com, a marketplace devoted to independent sellers and the high-end rare-book trade, 44 percent of the offerings from Orlando’s Fenwick store were selling for $25 or more and 17 percent for $50 or more. When it comes to selling rare books, megalisters may be at a disadvantage, partly because there are fewer benchmarks for their pricing software. And Alloway of Motte & Bailey says he’s able to outwit the megalisters’ computers, provoking price wars and then buying up books at below market value, holding them until prices readjust.

Hand sellers are preserving and circulating this new alchemical trade wisdom in online forums on sites like BookThink and AbeBooks. “This thread is potentially worth thousands of dollars to each and every one of you,” one participant in a discussion board on eBay wrote under the heading “A book that looks like nothing,” where sellers pass along tips on surprisingly valuable books. And the hand sellers have allies in marketplace sites like Biblio, which keeps out the penny sellers with policies like a $1 minimum price. “The meat of our sales tends to fall in the $40 to $125 range,” said Brendan J. Sherar, Biblio’s chairman and chief executive.

After the great wave of creative destruction set off by e-commerce, the more adaptable breed of used-book seller seems to have survived with McMurtrian ideals intact. Chris Volk, a store owner and the vice president of the Independent Online Booksellers Association, says her colleagues are frustrated but undaunted by the megalisters. “In the long run,” she said, “people who know what they’re doing will win out.”

I managed to get a few minutes of Hector Rivas's time. He's the CEO of Thrift Books, one of the biggest penny sellers. He was affable, but somewhat reticent about disclosing specific facts and figures about the company's performance.

"It's so competitive, so cutthroat," he said. I understood completely. You need to guard every advatage you have. How many books do they sell weekly? ...
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I managed to get a few minutes of Hector Rivas's time. He's the CEO of Thrift Books, one of the biggest penny sellers. He was affable, but somewhat reticent about disclosing specific facts and figures about the company's performance.

"It's so competitive, so cutthroat," he said. I understood completely. You need to guard every advatage you have. How many books do they sell weekly? ...

In order to see the entire cate-list you must purchase the July/August 2008 issue:   http://www.finebooksmagazine.com/issue/0604/index.phtml

Hector Rivas has found out that a penny can go a long way. His company, Thrift Books LLC, sells more than 1,500 used books a day online. And 30 percent to 40 percent of those books cost only 1 cent.

"We're going to take over the world," he jokes. And he may, perhaps 1 cent at a time...
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Hector Rivas has found out that a penny can go a long way. His company, Thrift Books LLC, sells more than 1,500 used books a day online. And 30 percent to 40 percent of those books cost only 1 cent. "We're going to take over the world," he jokes. And he may, perhaps 1 cent at a time. Since Thrift Books started in 2003, the company has emerged as one of the largest used booksellers in the country -- with 400,000 books in stock and adding 10,000 titles online every day. The company is able to list a high volume of books each day using a program that developed by Thrift Books co-owner and software architect, Daryl Butcher. He says the software is what has made Thrift Books one of the leaders in the used book industry. "The software enables us to sell books on the Internet efficiently. Because this cuts cost and time, we can sell the books at cheaper prices," said Butcher. Instead of listing each book manually on every Web site, after listing one book on just one Web site, Butcher's program automatically lists that same book on all the sites it's programmed to, such as Amazon.com, Half.com, eBay.com, Alibris.com and the firm's own Web site that was started this year -- www.thriftbooks.com. On Amazon.com, Thrift Books has the highest customer rating of all high-volume sellers, Rivas said, adding that if you search any book on Amazon.com and Thrift Books has it in stock, the book will appear on Amazon's front page almost every time. This is because Thrift Books' software program automatically reprices inventory on a regular basis so that the prices stay competitive, which allows the firm's books to be viewed more frequently. The majority of the books are sold domestically but the company does ship internationally. Rivas says he wants to have the least human contact possible at the company's automated 25,000-square-foot warehouse located on Mercer Street, near Lake Union in Seattle. But the company still needs 22 full-time employees to grade the books' condition, sort them, shelve them, pick them out of the warehouse when they are sold and ship them to the customers. Thrift Books is privately held and has about $2.5 million in annual sales, according to Rivas, with 60 percent of sales coming from Seattle-based Amazon. "That first year we only made $1,000 in sales," said Rivas. "We've had our hardships and see ourselves as the major players in this market. Our software system enables us to continue to run on a shoestring budget, even today." The owners say they plan to operate in the same way they did when they started -- low budget -- no matter how big the company gets. With no significant connection to or profound love for books, the business partners saw books by the bulk as a low-risk, profitable business plan. The original owners, Butcher, who had an idea, and Jason Meyer, who was looking for an idea to invest in, met at a church function. "He (Meyer) asked me if I had a million-dollar idea and I said, yes," said Butcher. Rivas joined the team a few months later and all three men are co-owners of the company. "Our business model is like Wal-Mart's, buy in bulk and sell at deeply discounted prices," said Rivas. "We bank on volume to make money. If you're a small seller, you can't make money off of a penny." Rivas said as far he knows, Thrift Books is the only other company outside Amazon that sells books for 1 cent. And Thrift Books offers cheaper shipping rates for multiple book orders. The shipping rate for one book is $3.45; for each additional book, Thrift Books charges $2.59. The owners were so sure the plan could not fail that they started purchasing computers for Butcher's software before they had any books to sell. "We knew we could get the books. There was no doubt," said Rivas. With his marketing and sales background, he was able to increase inventory by purchasing books in bulk at warehouse prices from various places such as charities and thrift stores. Thrift Books pioneered profit sharing with local libraries by buying books, which are usually sold at the libraries' annual sales, and then giving the library a cut of the profit from sales of those books. The King County Library System was the first to partner with Thrift Books in 2004. Since then, the North Central Region Library system in Central Washington and the Pierce County Library System have also joined. Thrift Books' inventory of random books often ranges from best-sellers to "no market" books such as old encyclopedias and dictionaries. The "no market" books account for 20 percent to 30 percent of Thrift Books' inventory and have surprisingly been a success. "The reason why we say we offer 'hard-to-find' books on our Web site is because sometimes we get very old books," said Rivas. "We get feedback several times a week from our customers saying they were glad we offer the books they've been searching a long time for." The owners say there is always a possibility that they will start selling new books but for now their main mission is to define the used-book business. The online used book market has grown significantly. In 2004 national sales of used books were $2.2 billion, up 11 percent from 2003. Of the $2.2 billion, $609 million came from online sales, according to the Book Industry Study Group (BISG), an industry trade association. Thrift Books has plans to expand but Rivas would not be specific. "Right now, we want to become scalable and be able to replicate our warehouse anywhere in the country," said Rivas.

Earlier this month we pondered the strange Internet phenomenon of penny-book sales via Amazon.com, and reached the conclusion that penny books might be less a business model than an unintended consequence of a business model.

One reader begged to differ, contending that our argument really applied only to small businesses. And he knew what he was talking about, seeing how he was the president of a Seattle bookseller that sells more than 1,500 books a day on average, with perhaps 30% to 40% of those going for a penny...
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Earlier this month we pondered the strange Internet phenomenon of penny-book sales via Amazon.com, and reached the conclusion that penny books might be less a business model than an unintended consequence of a business model. One reader begged to differ, contending that our argument really applied only to small businesses. And he knew what he was talking about, seeing how he was the president of a Seattle bookseller that sells more than 1,500 books a day on average, with perhaps 30% to 40% of those going for a penny. We've been trying to find the most-efficient way to list the most books in the least amount of time with the least labor," says Hector Rivas, president of Thriftbooks (www.thriftbooks.com). Thriftbooks' weapons in that battle are technology, a willingness to experiment -- "we're young guys learning from our mistakes," Mr. Rivas says -- and those very economies of scale that we didn't think were such an asset in the penny-books world. But that said, a quick tour of Thriftbooks' business model only reinforces many of our initial conclusions: Penny books are a savagely low-margin business with little room for error, and not a good business for the little guy. Thriftbooks began in the summer of 2003 when the principal owners, Daryl Butcher and Jason Meyer, met at a church function. Within a week the two had bought computer equipment, books and warehouse space and listed and sold their first books online. Today, Mr. Rivas says Thriftbooks has an inventory of more than 400,000 books, which they turn over about every two months. They sell about 60% of their wares as an Amazon third-party seller, though they do also sell books through Abebooks, Google's Froogle service and their own Web site. The company expects revenue of $2 million this year. Mr. Rivas says Thriftbooks' inventory is basically books that haven't sold in brick-and-mortar bookstores. "What they discard as books that aren't useful, we can sell online," he says. Well, a lot of them: Mr. Rivas says 20% to 30% of the books that come in is " stuff that has no market" --encyclopedias, dictionaries, volume series and the like. Mr. Rivas says Thriftbooks has various ways of disposing of those, including eBay, sales overseas, and if all else fails, recycling. ("That's been a learning process," he says of such disposals.) Books that make the cut are listed for sale by other employees, who use software developed by Mr. Butcher that links into Amazon's. These employees grade each book, picking from onscreen choices, and scan each book's ISBN number from its bar code, typing in the number for books without bar codes. That automatically retrieves information about the book from Amazon, including the price range, and sets a price. When the books are shelved, a handheld scanner records that and the book is listed for sale. The software is a key to Thriftbooks' productivity, Mr. Rivas says. He estimates that while a small seller might be able to list 30 books online an hour, Thriftbooks' typical employee can list 200 -- and one star performer can list 450. That drives costs down. "We want to automate everything," Mr. Rivas says. "We want to have the least human intervention possible." Still, automation isn't everything. Volume and size are key, too. Mr. Rivas notes that while small sellers drive shipments to the post office, the post office comes to pick up Thriftbooks' packages (and gives them a volume discount) -- and because Thriftbooks buys supplies in units of thousands, it pays less. "We're getting wholesale prices for everything we purchase," he says. His conclusion, in fact, is that "if you're a small seller, there's absolutely no way you can make money off a penny book." Big sellers can, apparently. But even then, it doesn't sound easy. And some of Thriftbooks' other successes sound like the exception to a fairly pitiless rule. For instance, Mr. Rivas says the company does get a lot of repeat customers, exactly the kind of business that's difficult to build given Amazon's site organization, which is based around connecting shoppers and sellers on a title-by-title basis, not third-party storefronts. But then Thriftbooks is easy to find on Amazon: It sells so many penny books that Mr. Rivas says it's frequently high in search results for used books. "If you search any book, we will more than likely be on the front page every single time," Mr. Rivas says, then adds: "That's our business model, to be on the front page. What good does it do you if you're on the third page?"

Jason Meyer and Daryl Butcher met at a boat party on Lake Washington last July. Days later, they purchased 10,000 used books from a charity, rented a warehouse in Kirkland and formed Thrift Books.

A year into the venture, the company has 300,000 used titles listed on Amazon.com and other online retail sites. Meyer, who oversees the company's finances, said he expects more than $1.2 million in sales the first year...
read more >>

Jason Meyer and Daryl Butcher met at a boat party on Lake Washington last July. Days later, they purchased 10,000 used books from a charity, rented a warehouse in Kirkland and formed Thrift Books. A year into the venture, the company has 300,000 used titles listed on Amazon.com and other online retail sites. Meyer, who oversees the company's finances, said he expects more than $1.2 million in sales the first year. "It's all volume," Meyer, 32, said of their strategy, which is to sell a large quantity of books cheaply and to make a profit on shipping. "We sell a lot of books for a penny." If selling used goods online isn't a new concept, selling them efficiently is — particularly for small businesses. Amazon Web Services, a venture the Seattle-based online retailer started two years ago, lets software developers use its sophisticated, back-end technology to invent new ways to display and sell goods online. Butcher, 25, the software architect at Thrift Books, for instance, used the vast catalog of available product information made available by Amazon to develop a program that lets his employees scan a book's bar code to quickly and accurately price and list thousands of used books. Without the program, they would have to enter each item manually. Jeff Barr, technical program manager at Amazon Web Services, said more than 50,000 developers use the program so far. Some tap the information to tailor their own sites and make a profit on referral fees, while others build software programs to help other merchants sell online. It's a potentially lucrative market if those developers can persuade merchants to use their products. Roughly 700,000 sellers have offered new, used or collectible items on Amazon in the past 12 months. "What can they do?" Barr said of the developers. "We said, 'Surprise us. Show us new things.' " Dave Anderson started his company, ScannerPal, after his wife, Barbara, began selling used books on Amazon 2 1/2 years ago. Anderson, who wrote software for wireless devices, had accompanied Barbara on a book-scouting trip when he saw his wife go through stacks of used books, holding up each one to determine whether it would sell or not. When they returned home, half the books had no market value. He decided the key to running a successful business was to buy only books that sold at a higher price. Anderson developed a software program that allowed his wife to use her cellphone, or any other wireless device, to enter a book's bar-code number. The program returned important information, including Amazon's price for the book, how many others were selling copies, the item's sales ranking and the lowest price for which that book was available. In December 2002, he started selling his software to the public through his Web site, www.ScoutPal.com. It now comes equipped with a scanner that attaches to a wireless device, so users can scan books at a garage sale. "You're going to pick up a book that's going for pennies at a resale shop and come to find out that it's worth $100," he said. "We call that the buried treasure and the gems. It's a lot like mining for gold." Big partners upset If the program furthers Amazon's goal to sell everything online, that vision has begun to clash with another side of its business. The company receives revenue through its Merchants@ Program, which enables larger, established retailers to list their products online. Each of the deals varies in size and complexity. While Amazon lists products for some retailers, it powers the sites of others. Toysrus.com sued Amazon last month, alleging it violated their exclusive partnership by allowing other retailers to sell toys and baby products on Amazon's site. Toysrus.com, a division of Toys R Us, has paid more than $200 million since the deal began for the right to exclusivity, according to the lawsuit. Amazon Chief Executive Jeff Bezos declined to comment on the lawsuit, when asked at the company's annual shareholder's meeting recently. But a company spokeswoman said Amazon would file its legal response sometime this month. Phil Forman of Newtown Video Distributors in Southampton, Pa. , said he might be out of business if he hadn't started selling online, including on Amazon. Forman originally sold VHS movies to video-rental stores but saw business dip as consolidation and the rise in video-store chains altered the industry. Forman first began selling bits and pieces of his inventory online, entering each title individually. He then purchased a program from Portland-based Monsoon Retail, which developed software using Amazon's information. The software helps merchants manage the selling process from beginning to end. Newtown now lists up to 30,000 to 40,000 movies at any given time. While Internet sales have increased sharply, his video-distribution business continues to decline. This means the company's overall sales might remain flat this year when compared with those of the year before. "That to me is a big jump because without it, I don't know if we'd be making money any longer,"Forman said. Slim margins For Thrift Books, which now warehouses its books in Seattle, the question now is how profitable it can become. The company's average sale price per book is $2. Amazon receives 10 percent of each sale, plus it requires used booksellers to charge $3.50 for shipping. Of that amount, the bookseller keeps $2.23 and it must use a large portion of that to pay for shipping and handling. Meyer, who runs the company's finances, said it developed a mail manifest system that pre-sorts packages. This allows savings of roughly 20 cents per package, which drops to the bottom line. The company purchases used books from major charities, but it's looking for other sources to bump up the average sales price per book. While the company's operations are generating cash, it won't pay off its initial investment — shelves, computers, and other startup capital — for another eight months. Meantime, it searches for the gems. Thrift Book's best-selling titles are "Seven Habits of Highly Effective People" by Stephen Covey and "Men Are From Mars, Women Are From Venus" by John Gray. Both sell within 48 hours from the time they're listed. The titles that sit on the shelves the longest: mass-market paperback books. Titles from authors such as John Grisham and Tom Clancy usually go for a penny. Meyer said he wonders how much further prices will decline as more sellers go online, more used books are recycled, and more books are listed on Amazon. "The bigger question to me is: How big can this get?" he said of his business. "I don't know. This market may be a thousand miles wide and one inch deep."

Jason Meyer and Daryl Butcher met at a boat party on Lake Washington last July. Days later, they purchased 10,000 used books from a charity, rented a warehouse in Kirkland and formed Thrift Books.

A year into the venture, the company has 300,000 used titles listed on Amazon.com and other online retail sites. Meyer, who oversees the company's finances, said he expects more than $1.2 million in sales the first year...
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eBay is not the only e-commerce site trying to attract enterprise sales. Amazon.com is another. Daryl Butcher, software architect with Thrift Books LLC, said, "With Amazon, if a book never sells we don't have to pay anything." eBay also has had its share of failed sellers, including Home Depot and Motorola, both of which pulled the plug last year when they learned high quantities of identical items keep prices too low. eBay.com Inc. in late February added SOAP and Java to its Web services SDK, tools that developers can use to integrate their back-end systems with the popular online auction site. The company also has teamed with Microsoft Corp. to adapt Office System 2003 to better suit an emerging class of enterprise developers leveraging established Web sites to build sales. Debbie Brackeen, director of the eBay developers program, said that the auction site once thought of mainly for antiques, collectibles and curiosities is now also an alternate sales channel for such companies as Disney, General Electric and Sears. "Like the majority of our eBay developers, Sears is focused on the end-to-end solution, starting from listing the items for sale all the way to end-of-auction inventory management and fulfillment issues," she said. Though the developer program has been in existence for about three years, Brackeen said it has only recently started to pick up steam. "We've grown from 200 developers last year to about 4,000 now," she said, adding that the recent enhancements to its SDK were in direct response to this growing community. "Developers were demanding SOAP and Java," which she said provides preconfigured and tested libraries. The tools had already supported XML and .NET. eBay and Microsoft early this month posted sample code on developer.eBay.com that glues Excel and Front Page components of Microsoft's Office System 2003 to eBay's SDK. Enhancements to Excel include an inventory staging component that enables manual or automated inventory input via XML import, bulk loading of listings with real-time pricing, and a persistent historical sales page for review and analysis of sales and invoices. An enhanced version of Microsoft's Front Page Web design tool will permit display of multiple eBay listings, and has a WYSIWYG editing tool and the ability to sort, filter and group data. She said that enterprise solutions provider SAP this year plans to release an eBay integration plug-in. "This will allow their customers to easily flush obsolete or excess inventory to the eBay marketplace" through an automated process, she said. The tool should be released by June. Other Channels eBay is not the only e-commerce site trying to attract enterprise sales. Amazon.com is another. Daryl Butcher, software architect with Thrift Books LLC, said, "With Amazon, if a book never sells we don't have to pay anything." eBay also has had its share of failed sellers, including Home Depot and Motorola, both of which pulled the plug last year when they learned high quantities of identical items keep prices too low. Absent that problem, Butcher said, Thrift Books obtains used and surplus books of all sorts from various sources and lists them as a so-called Amazon Marketplace Seller, a group of third-party sellers that sell new and used items alongside Amazon's at lower prices. Using the Amazon Web Services SDK, Thrift's .NET back end has been completely integrated with Amazon, Butcher said. "An application sits on our server and polls Amazon for new orders, which are imported into a database. At a certain level, a printout is generated with picking lists and invoices." Butcher said the company sells about 1,000 books per day. The ability to tap into Amazon's extensive catalog of items greatly simplifies data entry, Butcher said. "When we enter a book into our system, we just type the ISBN number and Amazon gives us the title, author and price of the book." The service also displays what other merchants are charging for used books in various conditions. "We wouldn't know what to charge if we didn't have Amazon telling us what everyone else was pricing at." Data flows from Amazon in the form of text files, which require the developer to build logic in order to parse. According to Jeff Barr, Amazon's technical program manager, this may change over time. "We've given out the fundamentals and left room for developers to put their creativity on top. In the future, we'll have more structured ways to do that." Nevertheless, Barr said Amazon's Marketplace Sellers account for about 22 percent of the company's overall book sales. Perhaps even more interesting are Amazon Associates, the company's name for companies that sell merchandise from Amazon's catalog on their own Web sites through cross integration via XML or SOAP APIs (www.amazon.com/webservices). "This is our virtual scenario. As people make purchases through your site, we ship the items and send you commissions. We've got over 900,000 associates doing this." Barr said which API to use is a matter of developer knowledge and preference. "SOAP is more formal and structured and appeals to people who grew up with strongly typed languages like Java and C++. The XML-over-HTTP, sometimes called REST, is more for the stringy scripting languages like Perl, Python and PHP." One of the advantages of REST, he said, is that no SOAP toolkit is required. "All you need to get started is to open a socket, do a raw HTTP get and read the results. Every programming environment can do that." Integration Outsourcing Outsourcing is also an option, and a handful of consultancies exist solely for the purpose of connecting companies with commercial sites. Services include postings of listings, inventory management and order processing and fulfillment. Among the largest is Atlanta-based Auctionworks Inc. "Last year we facilitated over a quarter of a billion [dollars of] goods sold to the eBay marketplace, and we launch about 2 million items on eBay every month," claimed Paul Lundy, the company's chief marketing officer. Auctionworks tools and services start at about US$15 per month for a self-activation program with a simple XML-based API, Web page templates and online help. On the high end, $5,000 to $10,000 buys back-end integration, training and custom templates. The company also adds a per-transaction fee.