I have recently been on a reading kick after adding myself and exploring friends book preferences on Goodreads. So I thought it would be appropriate to profile an interesting American social business venture called Better World Books that focuses on selling recycled books in a responsible way and making enough money to be able to contribute to environmental and social causes. This triple bottom line company is a well-known story having been named by Fast Company as one of the 45 social enterprises that was changing the world and been the subject of a recent Harvard Business School Case Study. So read on to learn more.
WHAT IS THE BUSINESS ABOUT?
Better World Books on-line used bookseller for the socially conscious that also promotes literacy through more than 80 partner literacy organizations and environmental conservation by decreasing demand on natural resources (e.g. paper) by keeping books off landfills. It is registered as a benefit corporation – a pioneering new business classification only allowed in a few US states. This also allows them to explicitly demarcate themselves as having an explicit social as well as business mission. Signaling to the world that they aspire to a higher standard than profit-maximization for shareholders. Thus far they have recycled nearly 100 million books and raised more than $13 million USD for literacy programs around the globe. They also continue to innovate with unique book drop programs and providing LEAP grants for libraries.
HOW DID IT START?
The business was started by three University of Notre Dame graduates in 2002 who after leading a book drive to help a local learning center decided they wanted to do more. They came up with a creative business model of selling books donated by the public and using the proceeds to fund literacy programs. By the time they graduated they build the idea and won the coveted McCloskey Social Venture Business Plan competition. They used the momentum to expand beyond the US Midwest and into to Universities all over the United States. They became one of the first B-Corporations in 2010 and since they have continued to grow.
WHAT IS THE SOCIAL NEED IT ADDRESSES?
The primary social need the business addresses is literacy. They partner with more than 80 literacy organizations around the world including well-known ones such as Room to Read and Books for Africa. Not only do they partner with these organizations to ship books to classrooms and communities where they are most needed by they also donate directly to them to keep these non-profits afloat. In addition to this social need, Better World Books claims to have environmental impact by keeping old books of the landfills and in productive use and offering carbon offsets for interested buyers shipping paper books.
WHAT IS THE BUSINESS MODEL?
Essentially Better World Books is an online book store for the socially conscious. It relies on people’s good conscience to donate books – which they have done in the millions, especially libraries. As well as consumer conscious to be OK to buy used books from them instead of buying books at places like Amazon. So the revenue model is similar to any other online retailer, they have low costs thank to very low COGs (books are donated) and fixed costs no physical retail presence. The only real cost is labor, marketing and distribution – they provide free shipping.
WHAT ARE SOME CONCERNS I SEE WITH THE MODEL?
- Pricing – How do you fairly price books which have no cost? Cheap enough so that it can attract consumer away from Amazon. High enough so that it makes sense to buy a book from them instead of donating money directly to literacy charities.
- Competition – The space they work in will become more and more of a niche as more and more books are read through ereaders and fewer people buy traditional books. This could also be a unique opportunity however to service the readers who still prefer traditional paper books especially ones that like the idea that a book has been passed down through generations of readers.
- Social impact – I know this will not be popular but I wonder how important of an issue illiteracy continues to be. Thankfully for many countries around the world illiteracy is no longer a big issue. More in more it is becoming an isolated problem especially in countries like India or for migrant populations. How can the company continue to be relevant if literacy programs are no longer needed?
- Partnerships – having so many partnerships expand collection and distribution channels as well as potential for impact. But managing so many stakeholders has to be complex and carry a high organizational cost. I wondering if it is worth it or if they would be better served to focus on a few high impact organizations to partner with?