A1 Books - Down for the Final Count
- By Michael Stillman
After 15 years in business, A1 Books is forced to close down.
By Michael Stillman
Would you like to buy 360 copies of Still Reading Khan, by Mushtaq Siekh? Maybe you would prefer 59 assorted Bibles, or thousands of various textbooks. Or how about this one - the proprietary software and computer servers of the online pioneering bookseller A1 Books? You are too late. It all went up for auction on September 15, 2010, at A.J. Willner Auctions in Netcong, New Jersey. With it went the legacy of A1 Books, once bigger than Amazon, a pioneer that morphed itself through several different faces, while almost, but never quite managing to fully establish itself. It was a survivor until finally it could survive no more.
It's hard to be certain about the details of A1 Books' history, it being a private company and spokespersons no longer available. Based on old interviews and stories, for which we cannot vouch, it was formed in 1994 and first went online in 1995. Founder Shinu Gupta was quoted as saying they were selling books online before Amazon. Gupta had immigrated to America from India, but obtained his education in the U.S. Apparently, he found locating textbooks (this was back in the pre-internet 1980s) difficult and expensive. Gupta became a Wall Street trader, but he was also something of a technical guru as well as an avid reader. Put business, tech, and books together just as the internet is emerging and what do you get? A bookselling website.
In the early days, A1 Books was targeted primarily toward the education market. It sold textbooks and others of scientific and similar interests, as well as some for pleasure reading. It quickly grew its inventory to a very large size, claiming 500,000 titles in stock in the late 1990s, a hefty sum then for a shop that sold almost exclusively via the internet. As time moved on, that stated number grew to one million. The focus shifted from college students to anybody who wanted books. Price was A1's calling card. It sold books cheaply, not collectible or antiquarian titles, but more common material at uncommonly low prices.
While the company had been formed to sell its own inventory, around five years ago it made a major push to get others to sell on their website. It would go up against AbeBooks, Alibris, Amazon and others in the listing site field. Naturally, this would be a tall order, as those other sites were already well established. A1 offered sellers a better deal - no listing fees, 12% commissions. Others were charging 15%-20% along with monthly listing fees. A1 made a major push, contacting as many booksellers as it could find, aggressively pursuing them to list their books on A1. Some did, many more did not. Everyone likes low listing fees, but if the audience isn't there to buy, they really don't matter. From what we can tell, the more successful listers had an occasional sale, others few if any. Since A1 was not a site noted for expensive, collectible books, sellers were not able to make up for low volume with high-end sales. Booksellers were not losing money by listing with A1, it's just that they weren't making it either.
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A1 Books - Down for the Final Count
- By Michael Stillman
Bankruptcy auction notice for A1's parent Webnotions, Inc.
At the time, we did a review of the A1 site. Our conclusion was that while the site was fine, we could not see any compelling reason for customers to move from the majors to A1. We felt that they needed to come up with a way to better differentiate themselves, that "me too" would not enable them to seriously challenge the market leaders. Ultimately, while it appears that A1 had a decent base of customers, and some who strongly believed they could obtain the best prices there, they never separated themselves sufficiently to make serious inroads into the listing site market.
A1 still had a few more tricks up its sleeve. It further evolved, becoming one of the "mega-sellers" on sites like Amazon. They flooded the market with low priced books, apparently using automated formulas to assure their prices were the most competitive. The mega-sellers have not always been popular with traditional booksellers, particularly those who specialize in the less than rare variety of books, but it is a niche that several companies have worked with apparent success, at least in viewing them from the outside. Again, we have no way of verifying any of the claims made by or about A1, but we saw statements that they had revenues of $20-$30 million in their peak years, had 2-4 million customers, had 30-40 employees, primarily at their headquarters in Netcong, New Jersey. Whatever their numbers, they were undoubtedly sizable, but as others have learned, you can't make up for losing money on individual sales with volume. The volume may have been decent, but obviously the margins weren't.
Still, A1 continued to try to grow. They added an overstock business to buy up publishers' remainders and overstock, and resell it cheaply. They expanded to selling items beyond books, a la Amazon and Alibris. They again pushed for more listers. They opened a bookselling website in India, and convinced the Times of India to go 50-50 in the venture (which is still active). The "growth" continued almost to the bitter end. Generally, such aggressive attempts at growing are either the sign of a very successful business or one desperately seeking a way to survive. In hindsight, it looks as if A1 Books was in the latter category.
Even as the company was attempting to push forward, it evidently was not doing so well at keeping up with its bills. Last April, some creditors went to court to force the company into involuntary bankruptcy. We don't know how long these problems were brewing, but usually, a company can stave off its creditors for a while as it tries to find a way to resolve its financial issues. A1 must have been struggling for quite awhile. The court at first pushed A1 towards a Chapter 7 bankruptcy. This is not the form that airlines go through every few years, where they are able to pay their old creditors a few pennies on the dollar and re-form as a new company. In Chapter 7, they just sell everything off and the company disappears. It means the court does not believe the company would be viable even if it could wipe its debt off the books for a few cents.
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A1 Books - Down for the Final Count
- By Michael Stillman
A1's India site.
A1 managed to win a reprieve, that is, a conversion from Chapter 7 to Chapter 11, where a company is allowed to attempt to reorganize itself, in June. At the time, Mr. Gupta issued a statement indicating this was a positive development, but apparently the company could not come up with a reasonable financing plan. By July, the company was back to Chapter 7, leading to the auction in September of its inventory and equipment. For A1, which survived the great internet collapse of 2000 (remember Pets.com and its ubiquitous sock puppet spokesdog?), another decade was not to be.
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