As applications for the 2010 Inc. 500 | 5000 arrive, we thought it would be worthwhile to shine a spotlight on some of the companies that are vying to appear on our ranking of the fastest-growing private companies in the U.S. (For more information and to apply, go to http://www.inc.com/inc5000apply/2010/.) One that caught our eye was Vienna, Virginia-based Booksfree.com.
About 10 years ago, Doug Ross had a hunch that Internet retail was going to be big. At the time, books were one of the only products selling online with some popularity, but nobody had tried to rent them—until Ross founded Booksfree.com in 2000. While Netflix was simultaneously developing a similar program for videos, Ross instituted an online library system for books. It worked like a regular library, but he added a few improvements: he would send books directly to customers, charge no late fees, and let members return books through the mail at their convenience in order to receive the next book on their wish lists.
Booksfree.com started with an inventory of about 100 best sellers and gained 600 customers within six months using what at the time was a novel rental approach. The four-person operation bought more books as they were requested, which was a significant start-up cost that led to a 90-day break in service.
"We just told everybody to hang onto our books, don't send them back, we're planning to re-open," says Ross. "We opened 90 days later and didn't lose a customer."
The challenge of keeping Booksfree.com in business is long over. If you request a book from the company today, it's likely they'll already own it in their three million-book inventory. Your request will be automatically forwarded to the company's warehouse, where it will be printed and scanned to determine where one of 19 employees can find the book in the 7,500 square-foot storage space. The company processes about 30,000 such requests for books and audio books every month.
Avid readers choose the service for convenience, to save paper, and to cut costs. Ross estimates that the average customer spends about $3 per book using his service, depending on which of the 45 different plans they choose. Some customers, he says, read a book every single day.
Explosive popularity earned Booksfree.com a spot in the 2008 and 2009 Inc. 500, with the most impressive growth being a period between 2004 and 2007 that saw a 211 percent increase in revenue. Ross says that doubling revenue in the last four years makes his company a good candidate for continuing its trend through the 2010 list.