Diversified trade publisher F+W Media has created a multi-million dollar e-commerce business in just five years, according to chairman and CEO David Nussbaum, speaking at the Publishers Launch conference in New York. (F+W Media is parent to Digital Book World.)
“Our e-commerce business will be over $50 million in 2014, if not 2013,” he said to a crowd of publishing professionals who were furiously taking notes, learning about a book-publishing-based business likely vastly different than their own.
Building an e-commerce operation in the book publishing business has been an oft-discussed and controversial topic for years, spurred by the invention and eventual launch of Bookish, a book sales site funded and owned by three of the largest U.S. publishers, Hachette, Penguin and Simon & Schuster.
The reasons for publishers to have their own e-commerce operations are obvious: Direct sales give the seller more revenue and more data about customers, the latter of which publishers sorely lack when working with third-party retailers. The drawbacks are not as clear but daunting: Publishers would have to enter into a new and complex business and compete directly with their largest customers, including Amazon, which is a known fierce competitor in e-commerce. There are others, of course, like the opportunity cost of investing in direct sales.
While daunting, doing it is not impossible.
While Bookish took two years to launch and hasn’t yet made a dent in the U.S. book business, let alone the bottom lines of its founders, F+W Media has become the “biggest e-commerce operation at a media company,” Nussbaum said.
The transition from 2008, when F+W Media was F&W Publications, a book, magazine and book club company, started philosophically, with Nussbaum going from office to office (F+W has locations around the U.S. and in the UK), telling employees that they were no longer in the book business — they were in the media business. Next, the company started hiring professionals to execute that vision: audience development; e-commerce; online product development; and more, mostly from outside the book publishing industry. Then, the company reorganized under community topics like crafts and design rather and eliminated separate “book” and “magazine” divisions. Last, the company began executing on the new strategy, building e-commerce operations from the ground up.
Recently, publisher Rowman & Littlefield made headlines by opening its own bookstore, put it head to head with Amazon. The company joined F+W Media and Macmillan, making a very small group of publishers building e-commerce businesses.
For F+W Media, the enhanced relationship with readers (read: customers) may be the biggest advantage of its strategy.
“We own these customers — Amazon doesn’t own them, Apple doesn’t own them. These are our customers. These are our gold,” said Nussbaum.