By Jeremy Greenfield, Editorial Director, Digital Book World, @JDGsaid
The Educational Development Corp., which announced today that it is pulling all of its titles from Amazon, plans to increase its sales by abandoning the major online retailer, according to the company’s CEO.
Amazon accounted for about 13% of EDC’s sales in 2011, estimated Randall White, CEO of the publicly traded Tulsa, Okla.-based children’s book publisher. The exact number is uncertain because EDC sells to Amazon through distributors who also sell through other channels and do not provide EDC an exact breakdown of sales.
According to White, the company will more than make up for the loss of those Amazon sales in 2012 through rival booksellers and through the company’s network of sales representatives.
“We’ve had a great outpouring from bookstores, as you might imagine,” said White. “They are so happy now that someone won’t be able to come in and scan their books and buy them on Amazon.”
While Amazon’s controversial price-scan app does not work on books, White said that bookstores lose sales of EDC books through customers checking book prices independently on Amazon after browsing in the store. Now that popular EDC books like Everyone Poops and How Big Is A Million won’t be available on Amazon, those sales will go more often to bricks-and-mortar bookstores, according to White.
White also expects to see a marked increase in revenue from books sold directly through the company’s network of sales reps, which struggles against Amazon as a competitor in a similar way.
The 75-person company generates nearly two-thirds of its revenue from its sales force of 7,000, which is mostly made up of independent contractors who sell to their friends and acquaintances, often in their own homes at gatherings – like Tupperware parties, but with children’s books.
Many of these contractors are not professional salespeople but instead highly educated mothers who want to make some extra money on the side but don’t want to sell cosmetics, said White.
“When someone goes to one of our gatherings and pulls out the smartphone and says, ‘well, I can get that cheaper on Amazon,’ they don’t know how to confront that sales tactic,” said White. Many sales reps quit after losing too many sales to Amazon, he said.
After the company made the announcement that it would discontinue selling books on Amazon, salespeople who had quit months earlier due to competition from the online retailer immediately called EDC to express interest in selling again, according to White.
Will the gambit work? White has reason to think so. Two years ago, the company pulled its Kane/Miller line of children’s book from Amazon and saw a 33% uptick in sales the following year.
“We’re up 15% in the month of February,” said White. “A 30% increase is possible this year.”
Wall Street isn’t worried yet: EDC shares are only off $0.08 to $4.90 in early trading.
Write to Jeremy Greenfield