Michael Powell on Internet Success

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Most independent booksellers would consider it suicide to go up against online bookselling giants Amazon.com and Barnes and Noble, but it didn't fluster Michael Powell, the owner of Powells.com. Since 1994, Powell has made his store's online presence a priority for his business. And in the process, his bookselling business has found considerable success. Last year alone, 35% of his company's revenue was derived online, and the online arm of his business is steadily growing.

"We actually started selling online 1994, when we had one bookstore with a database, a tech bookstore," Powell says. He put that inventory online, with information for how people could call or e-mail with an order. By 1996, he was adding more offline stores, but the real impetus for boosting Powell's online presence was a simple, grateful e-mail from a tech book buyer.

"We had been up with a tech bookstore for not too long and a customer had written an appreciative note," Powell recalls. The happy customer from England wrote Powell that he had found a book at Powells.com that would have cost $80 and taken eight weeks to get to him if he hard ordered through a source in England. Through Powells.com it cost $40 and took only three days to arrive. "That's when we thought, wow, this could be something," Powell says.

Today, book buyers can find Powell's in seven locations in the Portland metropolitan area and search an inventory of more than 2 million volumes via its online store.

Keys to Success

One happy customer does not a successful site make, however. Powell attributes the site's success to a combination of factors including the stores tactic of selling new and used books. The store has been selling used and new side-by-side offline since 1979. Online, Powells.com treats used and new equally, as well. "Our product mix is about 2/3 used and 1/3 new," he says. "If you want to save some money you can," says Powell, "if you're eager to get a new copy, you can order a new book."

Powell's also had a good reputation before it fully went online in 1997. "People knew our quality, and we had had some attention in the national press," Powell says. (The book store has been praised in print as far back as 1992, and has even been noted as the Best of the Web by Forbes.com in 2001 and 2002.) The promotional boost has made it easier for Powells.com to forge some strong affiliate marketing partnerships, including ones with Utne.com, The Atlantic.com and even its competitor, Amazon.com.

Amazon.com taps the Powells.com database for its used and rare selections. "They have a copy of our database that is updated daily, and they offer it to their customers and send the order to us to fulfill," Powell says. For each book sold through Amazon, Powells.com receives a percentage of the sale. "We probably have 1,000 partnerships [like this]," Powell says. Powells.com even does business with Barnesandnoble.com via a relationship it has with Abebooks, an online marketplace for used, rare, and out-of-print books. "We do have books listed on abebooks.com, so there is a relationship, but not directly," Powell says.

Powells.com's creative staff also can be congratulated for making the website a success. "You don't have to have megabucks and phalanxes of folks to make this work," Powell says. His small team of software developers (only five) and seven marketing team members develop engaging site features that pull in users and keep them coming back. "The features on the website are probably the most effective marketing expense," Powell adds.

The site offers staff-written book reviews as well as a review a day from four or five major media outlets including Utne.com. Every two weeks a newsletter goes out to about 300,000 opt-in subscribers, and the tech team has been able to create new features on the fly, including a "wish list" that let's users create a list of books they're looking for. When the books come in, Powells.com alerts them to their arrival. Another popular feature is the site's rare book list that is updated each week so users can scan the latest finds.

"Every line of code in our system has been written in-house," Powell says, which he feels is one of Powells.com's strengths. "Initially, we didn't have any other option but to develop in house," he adds. "There was no shelf software available." But even with today's plethora of offerings, he prefers to keep it homegrown. "We don't have to wait for other people to do it, and conflicts [between systems] don't arise when you do it yourself."

Powell does admit it might be more affordable to outsource site development, since hardware and software requirements of Powells.com are the largest single expense after inventory. But then they would lose control of the site and ultimately lose the opportunity to quickly create the fun features that Powells.com users have come to appreciate.

Last updated: May 1, 2004




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