A simple way to describe Alibris is as an exchange. The online retailer has become the largest independently owned and operated marketplace for new, rare, and used books, CDs, and DVDs in the 11 years since it was launched, primarily through its ability to focus on its customer base.
“A major part of our job is helping independent sellers of books, music, and movies to find buyers,” said Brian Elliott, president and CEO. “But it’s also making sure that our shoppers have a good experience so they come back and buy more of our sellers’ 100 million items.”
As an exchange, Alibris helps sellers find buyers wherever people are looking for new and used books, music, and movies. Alibris does this through its branded marketplaces, Alibris and Alibris UK, and also through hosted marketplaces for, and business partnerships with, leading retailers such as Barnes & Noble, Borders, Chapters Indigo in Canada, and Waterstone’s in the UK.
Alibris has maintained a year-on-year growth rate of between 10% and 15%, despite the economic downturn. Elliott attributes much of that growth to an ongoing focus on driving a good customer experience and finding additional sales outlets for Alibris’ sellers.
“We help small, independent book, music, and movie sellers grow their business,” he said. “If you’re a brick-and-mortar store owner, small or specialist publisher, or just looking to turn some used books into cash, Alibris can help you find many more buyers than people who will just walk into your shop.”
Building a better balance
Alibris began dealing primarily in rare, hard-to-find, and antiquarian books—items targeted at avid book collectors. Over time, the book selection expanded to include new and used textbooks, rare and out-of-print books, and newly released books, which now comprise more than 30% of sales.
“We now also help small publishers and authors who are just getting started and don’t have good distribution of their new book titles. The mix in our new-books category has grown tremendously over the past couple of years,” Elliott said.
Eighteen months ago, Alibris added music and movies to its selection, building the product categories in the same way it did with books: by focusing on hard-to-find and collector’s items. Today, it offers the same expansive product selection in music and movies as it does in books.
The product expansion required significant upgrades to Alibris’ infrastructure. The company must process data from sellers in thousands of formats, which means it needs comprehensive Web site tools to distinguish what inventory a seller has available.
“Our job is to make sense of all of that information,” said Elliott. “We had to take what we’d done in books and do it again in music and movies, aggregating the data and making sense of it.”
Alibris currently has more than 14,000 active sellers and lists more than 100 million SKUs for sale. More than 20% of those offers change on a daily basis, which means Alibris must be on the ball 24/7 with very little margin of error. To scale up its inventory systems infrastructure, Alibris works with Lilien, LLC, its Oracle value-added reseller.
Given the comprehensive nature of Alibris’ sellers’ selection, all of the behind-the-scenes work would be in vain without an easy-to-navigate Web site. For these Web site issues, Alibris works with Good Dog Design, a focused, user-experience-oriented Web design shop. Alibris Web site improvements help consumers navigate through the choices available to them while also showing them new products they might not have otherwise heard of.
“There’s a fine balance point you have to find between how do you make it easy for people to navigate and yet show the breadth and the depth of what our sellers have for sale,” said Elliott.
Problem solving expertise
The other side of Alibris’ business platform includes making sense of the wide variety of products sellers provide; marketing their books, music, and movies; and building services for sellers so they can find buyers looking for their products. To get repeat buyers and build a reputable brand, the company maintains a number of customer service capabilities.
In addition to inhouse resources at its offices in California, Alibris works with Motif Infotech to support e-mail, chat, and phone interactions with buyers. Over time, the company has perfected its approach to quality control, service level agreements, and customer satisfaction monitoring, making sure it responds to customers in an accurate and timely fashion to make them happy.
“We measure our internal and external teams on customer satisfaction, meaning did the customers get the answer they were looking for, were they happy with the answer, did they get it in a timely fashion, and did we answer their questions the first time around,” said Elliott.
“If we’re going to build a repeat customer base and get people to come back, it’s important that they have a solid experience,” he continued. But Alibris’ dedication to its buyers doesn’t stop there.
Many e-commerce retailers are starting to understand the importance of problem solving. Effectively taking care of a customer with a problem and resolving the issue in a fashion that makes the customer happy creates customer advocacy.
“We focus on making sure we give a timely and accurate response but also that we satisfy the customer and continue to run a global, around-the-clock operation in a way that allows us to measure the results of what we’re doing,” said Elliott.
A major component of marketing Alibris starts with the understanding that most of the company’s customers are already online looking for rare, out-of-print, and used books, music, and movies. To differentiate itself in these product categories, the company continually builds on its selection.
Alibris has a three-pronged focus that starts with search engine marketing in partnership with Marin Software. On the affiliate marketing side, Alibris works with LinkShare, and for the third piece, Alibris builds strong loyalty and retention through e-mail marketing, personalized recommendations, and tell-a-friend programs.
“We want to make sure that wherever you are online, if you’re looking for a book, music, or movie item, you’ll see Alibris’ presence on search engines and price comparison shops,” said Elliott.
A rapidly growing component of the company’s strategy is working with large retailers such as Barnes & Noble, Borders, Chapters Indigo, and UK-based Waterstone’s, augmenting their selection by making Alibris’ sellers’ products available to their shoppers. By opening up marketplaces for other retail brands that have large bases of loyal customers, Alibris fulfills one of its primary goals: helping sellers get more sales. It also helps those retailers expand their customer base.
“If you are a retailer like Waterstone’s in the UK, you want to be able to bring your customers the selection that our UK sellers have, as well as what our US sellers can bring, which can’t be carried in a standard store or new book warehouse,” said Elliott.
Executing on a plan
Part of Alibris’ ability to take on international partnerships stems from its logistics capabilities. The company has a cross-docking facility, which means sellers that are across the Atlantic or the Pacific in any direction from their buyers only need to put products in one box. Alibris will pick up the products and have them shipped to its warehouse in Nevada to centralize the process and distribute back out internationally.
The company handles outbound logistics for international shipping, which means sellers don’t have to worry about the varying costs of shipping, regardless of the final destination. Alibris uses OHL (Ozburn-Hessey Logistics) as its facilities partner. “OHL owns and runs the warehouse services that our sellers use, as well as the labor force, and streamlines this part of our business,” said Elliott.
To handle the shipping, the company uses UPS and UPS Mail Innovations (UPS MI) as primary domestic carriers and Brokers Worldwide for international transit. By working with strong partners, Alibris keeps its service delivery times high but its costs low.
On the Web site side of the business, to process credit card transactions and ensure that it remains secure and compliant when dealing with buyers and sellers across the world, Alibris works with Retail Decisions and Chase Paymentech.
“Retail Decisions is our gateway, meaning it provides us access to Chase Paymentech, which handles our credit card companies,” said Elliott.
“Retail Decisions also provides services that help us prevent fraud and manage whether or not the customer’s credit card is valid,” he continued. “If you’re an online operation, you need companies to help you sort through this.”
But even with these advantages, Elliott believes Alibris’ true differentiators are its product selection and its ability to execute on a vision to be an exchange between a wide scope of buyers and sellers. “We’ve got a technology team and a marketing team that find ways to drive growth by executing against product innovation,” Elliot said.
“We’re seeing growth on Alibris and Alibris UK and faster growth on the business partner side of the business, but we need to drive both sides of that equation,” he continued. “It’s all about finding more book, music, and movie buyers for our independent sellers.”