2X eCommerce Podcast

Kunle Campbell (00:01.41)
Hi Mike, welcome to the 2X Ecommerce podcast.

Mike Ward (00:05.368)
Ah, thanks. It's great to be here.

Kunle Campbell (00:07.202)
Fantastic. So this episode is really interesting in the fact that I'm actually a customer of Thriftbooks, your company. I've always been fascinated about just the used book market. There's a time I was really splurging out on physical books. And I just thought to myself, new books, you know, if I can get a reasonably new, you know, new book, used book, I will. And I

I bought several books from yourselves. Do you want to please tell your story as to because you're a founding member of 5th Books from the introduction.

Mike Ward (00:47.634)
Yeah, sure, would love to. So, you know, my background is actually not around books. I love books and they've always been something I've been really interested in, but my background is as a computer programmer, as a developer. So, you know, when I came out of college, it was as a web developer back when websites were brand new and I had a degree in computer science, a minor, but I...

Um, primarily taught myself HTML and some of those things. I was in some bands at the time with my buddies. And so I built bands websites and, uh, that ended up being something interesting. I put on my resume and I got some interest from some companies and that became my career is writing and building websites for some companies. And then thrift books was founded by a friend of mine who I knew very, very well. Uh, college roommate.

And he immediately pulled me in and said, Hey, Mike, we need you to build us a website. And, you know, that was not uncommon for the field I was in, um, for my friends to ask me for favors like that, but it sounded interesting enough that I decided to, to jump in and do it. And so it was a moonlighting job. I had another full-time job, uh, working at, um, a financial services company and

writing code to help their trading department, you know, very, very different than e-commerce. And then in my spare time was helping thrift books, get their first website up and do some other things like that. And then it got to a point where the company got big enough that, you know, it was, it wasn't making a lot of money yet, but big enough that myself and a couple other guys decided it would be worth doing that, that cliche quitting of the day job.

I'm going to the startup. So, uh, I pulled the trigger along with a, another friend of mine and we, we both quit our full-time jobs and, and came to work for Thriftbooks, uh, full time. So that was the beginning of it that we moved to Seattle and, um, we, we were tiny. We had a dozen employees and most of those were part-time.

Mike Ward (03:08.926)
folks just working in the warehouse, shipping out some orders for us. And yeah, that was the beginning of it.

Mike Ward (03:24.114)
Sorry, I couldn't hear you.

Kunle Campbell (03:26.43)
Interesting, interesting. And what timestamp was this?

Mike Ward (03:30.038)
Oh, this would have been, let me get the exact years right. That's all it's hard to remember back. You know, that would have been back in 2006, 2007.

Kunle Campbell (03:42.638)
Okay. So, so, and, and from, from my understanding, you, you were predominantly on Amazon. So how did building Alty a website kind of work with, with the, with the Amazon strategy?

Mike Ward (04:08.902)
Apologies, can you repeat that?

Kunle Campbell (04:11.082)
Okay, so from my understanding, you started out from Amazon as an Amazon, you know, store or third party seller. How did building out a website, what were the technicalities required from you then in the mid 2000s?

Mike Ward (04:29.85)
Yeah. So, you know, the, the whole idea was formed because Amazon allowed third party sellers to, uh, join their website. There's a lot of press about that. You know, so we decided we would go get some books and put them online. So the entire business was taking books and putting them on Amazon's website, managing those feeds, managing the process of pricing those items, fulfilling those items, et cetera.

And we thought we would like to have our own website as well as an alternative location for customers that they could come to us and buy a book. Obviously, there's less commission if you sell a book through your own channel versus through Amazon. So we built that up. And some of the challenges are...

If I have a book and I have one copy of it and I sell it on Amazon, then it's no longer for sale on my website. If I sell it on my website, I have to take it down from Amazon. So those were some of the challenges, but at that time our goal was just build the website and see what kind of traffic we get. And you know, no surprise, it was pretty small amount of traffic. We still remained predominantly in Amazon business for many years, even though we had our website.

Kunle Campbell (05:49.511)
Okay. Okay, let's talk about your Amazon journey. And then we'll get into how you transitioned to your to DTC successfully, because not many brands have been able to do that successfully. Right now, from what I understand, also, your website brings more revenue or delivers more revenue than Amazon and your head on head with bands and nobles, which is phenomenal for pure play, you know, e-tailer.

Mike Ward (05:58.504)
Thank you.

Kunle Campbell (06:16.806)
What was the Amazon journey like with Amazon? Obviously, there's a lot of competition in the books category. You're competing against Amazon itself. It's sometimes it's sometimes a race to the bottom. It's it's lots of consumers will get the cheapest prize. So what was your strategy to navigate Amazon and how did you stay profitable if you did at the time?

Mike Ward (06:40.698)
Yeah, great question. And it often is a race to the bottom, right? And we did face those challenges. As you know, and as your listeners are likely to know, Amazon is predominantly price oriented. That was the idea and the model behind the company is they want to create a competitive environment where sellers compete for price and that this would be good for consumers. So

in the book space, that would often become true, right? So if there was a book that had a lot of quantity of it, a lot of offerings available, then the price would drop precipitously. We became really, really good at managing a large scale dynamic pricing environment. So technology became the key, not just managing that process, but also

deciding how to price certain books different ways. So not all books are to be treated equal from a pricing perspective. So imagine an inventory with millions of products in it. How do you determine the price for that and how quickly can you update the price as the environments around that price are changing? That's something we got very, very good at. One of the best on the Amazon platform and it really, really helped us grow.

Kunle Campbell (08:06.718)
Was it proprietary technology, reprising technology?

Mike Ward (08:10.742)
Yes, so on our side it was collecting the prices came through Amazon's feed. So that part of it would be available to any other seller on the platform. But we became really, really good at adapting to those, those inputs that we would get from Amazon in an almost real time fashion. So if we get a stack back from Amazon of

Offers and we see where we're listed in it and the algorithm says we want to be higher or lower Then we can adapt to that Almost immediately send that price back up to Amazon and have it live on their site So we had a turnaround time when we got really fast, you know, we were able to get prices updated in Anywhere from five to twenty minutes depending on You know where we were in the cycle

And other competitors were taking days to update their prices or to react to things that we were changing in our prices. So it created a really, really big advantage. That playing field has leveled somewhat over the last four or five years, but 10, 15 years ago that was a very, very big advantage for us.

Kunle Campbell (09:27.69)
do you mean its levels? Are they now new like off the shelf or you know on market solutions for repricing, dynamic repricing now?

Mike Ward (09:38.923)
Yeah, there are a lot more offerings, third party off the shelf offerings that customers can use. Amazon incorporated directly some, for lack of a better word, sort of low resolution versions of some of those tools. So on Amazon, for instance, you can just check a box in your in seller central to say, I want to be the lowest price or I want to have Amazon pick my price for me.

It's a little bit of a black box, but it solves the speed issue. We didn't want that. We wanted a lot more finer-grained control over what we were pricing our items at. So we did it all in-house and did it all with proprietary software. So that is an advantage and still is today.

Kunle Campbell (10:27.53)
Amazing. So you, you led by your team, you know, led by you, your team members actually did that. So prior to like 2010, excuse me, please. What was the size of your technology team, you know, people who are actually writing code for your reprising for your website in order to make you competitively advantage.

Mike Ward (10:55.61)
Yeah. Well, so yeah, back in 2007, 2008, it was two of us at first and then was four. Uh, and I think probably by 2010, we had five or six developers within the company. And because we were so small, we all wore a range of hats. We were all what we would call full stack developers. So we were.

Kunle Campbell (10:55.904)
Yeah, it will give you competitive advantage.

Mike Ward (11:22.438)
Everybody was writing database code. Everyone was writing front end code. It wasn't until we got into, you know, the mid teens, so to speak, you know, 2010, 2011, 2012, that we started really specializing our development team into certain roles. So, you know, today we have a team focused completely on the website and we have another team completely focused on our operational and backend.

tools and automation equipment and things are, and we have a team dedicated to our database. So it was just a slow evolution over those years.

Kunle Campbell (12:06.454)
I can imagine, I can imagine. I want to step back a little bit. So there's a question I should have asked at the start, which is, and it's always fascinating, it's always sort of, I've always been fascinated about this. It's, it's really down to, to books. How does the business work secondhand books for, for books? Obviously you have deals with publishers and you know, you, you get it, you, you get their products in it and you sell, but how do you get this volume of

books. I mean, I have some books in my garage right now. I don't know what to do with. So what how does it work? And the business side?

Mike Ward (12:45.254)
Yeah, so we buy books in bulk and the industry for consolidating those books is primarily led by thrift stores. So in the US, for instance, there are some really big thrift stores that your listeners will probably be familiar with, Goodwill, Salvation Army, etc. And so if a reader like yourself takes a box full of books from the garage and donates it to Goodwill...

then Goodwill takes that box and they put it in a bigger box. And then they put those in the corner of one of their consolidation centers until they have enough boxes to fill a semi truck. And then we buy it from them. And we pay by the pound for those site unseen. We don't know what's going to be in the box until we get it. And we buy to support our operation, hundreds of semi trucks full of books every week. So, uh,

That's the way the business runs. You need to continue to find those, those nuggets of gold that are mixed in there. And there are also a large number of books that are redundant and that we don't want and those end up getting recycled. So we use a lot of technology to help us decide what to keep and what to reject and what quality levels, um, to set books at and

what to price them at. So there's technology involved at every step along the way in determining out of that semi-truck load with 40,000 books sitting in random boxes, which are the ones that we know the customers are gonna want? Which are the ones that we know we can price at? And some predictive analytics around each one, how fast can we sell it? How likely are we to sell it? Things along those lines help us decide.

Kunle Campbell (14:32.475)
Hmm.

Mike Ward (14:38.546)
where to shelve it, where to put it in the warehouse, whether to keep it, whether to not. All of those decisions are algorithmic and happen in real time.

Kunle Campbell (14:48.094)
Well, so I guess at that point of getting the box, you know, when you've paid by the pound, the hundreds of boxes that come into your fulfillment centers, there's a lot of human sort of impute there. And then what happens to the how are the books scanned? Are they physically scanned or are they put through a machine? What does it look like?

Mike Ward (15:11.07)
Yeah, both. So we have machinery that we've built and iterated on and gotten better, many life cycles to get those to where we want them to be. But a majority of the books actually end up being rejected and recycled. A minority of the books are actually sold to the customer. So it is a lot like I use a gold mining analogy, you're digging through this kind of dump truck load of stuff.

and looking for the gold nuggets within. And so because a majority of the items are rejected, then the automation can look for those rejects upstream. And so yeah, we have conveyor belts and scanning equipment, OCR equipment, and all things that have taken years to develop and they will find the books that we know we don't want and we'll reject them and send the books that we do think we want.

to humans to grade. So there are people involved in the process, but they're downstream for efficiency reasons. And then the people are putting a grade on it. They're recording a couple other data points about it. You know, is the dust jacket missing? Is CD-ROM that would normally accompany it missing or present? And once they mark those things, then the book is a

Kunle Campbell (16:18.005)
Make sure.

Mike Ward (16:37.854)
put a sticker on the spine and it's put into inventory. And then at that point it goes for sale.

Kunle Campbell (16:42.95)
Okay, okay. So the grading is done by humans, but everything pre-grading is essentially automated for a good part. Okay, makes a lot of sense. And is everything in Seattle or is it distributed across the US?

Mike Ward (16:51.995)
Yep.

Mike Ward (17:01.31)
No, we actually don't have any warehouse in Seattle today. We have five distribution centers spread out around the US. And our corporate headquarters are in Seattle. We did previously have a fulfillment center here. But we've consolidated into five big mega centers around the US. And that's where our operations are centered.

Kunle Campbell (17:25.118)
And it keeps the spread really.

Mike Ward (17:27.902)
Yeah, you're balancing two things, right? You're balancing inbound cost because we have to shift the truck in from the goodwill and then you're balancing outbound costs. So if you have many fulfillment centers or processing centers spread out around the country, you may minimize your inbound costs, but you're going to pay the price on your outbound costs. So we've struck a balance where we feel comfortable.

Kunle Campbell (17:48.596)
Mm-hmm.

Kunle Campbell (17:53.918)
Yeah, if you're closest to the source, why not? You know, and that makes more sense. Yeah, it's easier, much easier. Good stuff, good stuff. So with Amazon, you're certainly not fulfilled by Amazon FBA. You handle your fulfillment yourselves. Is that the case 100% of the time?

Mike Ward (18:14.082)
Yes, it is. I think we dodged a bullet. There was a period of time, four or five years ago, when Amazon was really pushing a lot of sellers to move into the FBA program. And the financial metrics never really quite made sense to us. It was close to making sense, but glad we didn't. As your listeners are likely aware, Amazon has been raising their commission costs and their fulfillment costs dramatically.

on the FBA side more so than they are on the seller fulfilled side. And particularly on those products that are low priced, which our product happens to fall into that. So Amazon's shelves are in short supply and so they've created a commission structure that puts the thumb on the scale and advantages sellers that are selling high priced items that are going to sell quickly.

our product is just not suitable for FBA. So I'm glad we never got in on it, to be honest.

Kunle Campbell (19:23.054)
Interesting, interesting. To give listeners some perspective, you know, I earlier on spoke to the fact that your head on from a website traffic standpoint with bands and noble. What's been the trajectory of growth? From from inception, you've been almost 20 years or over 20, via 20 years, you're a 20 year old business.

20 years, 2006, almost 20 years, because you didn't start in 2024, in 2004. So almost 20 years, what's been your growth trajectory? So people just get some context as to, to where you lie in the spectrum of, you know, ecommerce businesses.

Mike Ward (20:05.562)
Yeah, well, as we like to say, slow and steady, and then all of a sudden started slowly and then it went fast. Uh, you know, we, we really are trying to grow or have always tried to grow other than those first three or four years where we may have been growing at, you know, a 30% clip for the most part, we're trying to grow in, you know, a reasonable amount every year, somewhere in, you know, the

the 10 to 20% range and we've been able to pull that off. In terms of the transition to thriftbooks.com, similar story, right? When we started the company, we had one or 2% of our sales coming through thriftbooks.com and the vast majority coming from other places. And then that just grew a point at a time, a point at a time.

We had a goal to say, let's try to get half of our traffic on thriftbooks.com. And it felt like, honestly, it felt like an unachievable goal, but we thought we'd aspirationally put it up on the wall and see if we could do it. And, and we did. And, um, and then from there, as we've grown our customer count, where we have loyalty, we have a loyalty program. We have a brand recognition. It.

began to grow organically in a way that's really been tremendous. So our customers tell the story. We hear from customers over and over and over again, where were you? I wish I knew about you five years ago. I didn't know this was a thing. I didn't know you could actually buy, buy used books like this from a large e-commerce company. So we just continue to spread. And so there we've done some really fun things with our brand, our

Our VP of marketing is amazing and she's done a lot to create a lot of loyalty. And yeah, we've just been able to succeed by slowly, but surely increasing that customer count over time to where now we're in the millions. And as you say, I'm assuming you looked at similar web and looked at our monthly traffic, we're close to Barnes and Noble in terms of monthly traffic. So that's really phenomenal.

Kunle Campbell (22:21.368)
Mm-hmm.

Kunle Campbell (22:27.294)
Yeah, it's interesting. And I'm going to get into the DTC story because most of the stories we tell here are DTC. But before we do that, let's speak to, let's finalise the whole Amazon thing. I know you still do Amazon. Listeners, so for listeners, what tips do you have based on, you know, your story? You know, everybody's journey is different. Do you have to, to e-commerce, you know,

retailers or founders listening to this on just growing on Amazon as a channel? What first principles, you know, thinking or tips do you have?

Mike Ward (23:09.758)
Well, good question. Amazon is a difficult environment. And sure, your listeners are aware of that. It is very price oriented. So first tip is, don't go on to Amazon if you are worried about that. If you think that the competition is going to drive your price down to zero, there's a strategy where you say, my product is differentiated enough.

that I don't need to be there. The thing that Amazon does have going for it are the millions and millions of eyeballs. I mean, they do dominate and they have a majority of e-commerce viewers. So if you are a lesser known brand with a product that you think could compete within Amazon, then by all means jump in there and take advantage of those eyeballs. You are going to...

pay a high commission for that privilege, but it's going to save you on your marketing costs. So if you would rather take some of that commission that you would spend for Amazon and spend it on your own marketing on your own vertical channel, you could do that. There are some brands out there, you know, big brands, it is a little bit different for a startup, but you know, Birkenstock, for instance, they

made a decision years ago to not list their products on Amazon. And I'm sure that was a painful decision for them because they missed a lot of volume, but they wanted to guard their brand and they wanted to guard their price primarily. And other products that you see going back and forth, Nike has struggled. It had a time when they weren't on Amazon and then they were back again and they've kind of flip flopped around. It's difficult. It's difficult as a brand.

because you lose some control of your brand, your brand message, of your pricing perhaps, and that can be a challenge, but there's no other place that can kickstart a company quite as quickly because of the eyeball count. So it's just a balancing act. My recommendation is if you're starting out, go ahead and do both. Set up a direct to consumer site. They're not hard to do nowadays. You don't even really need a giant development team.

Mike Ward (25:32.594)
Set one up, take your product, put it there, take your product, put it on Amazon as well, and work both channels. There's no reason why you can't work both channels at the same time. And if you want to see which one works better, what better way than to collect data, do an A-B test, have a vertical, have Amazon, don't forget eBay and some other third party sites as well, and then see which one performs. But if you wanna put...

marketing effort into it. Amazon is mostly just a pricing play. Are you competitive? Are you getting the buy box, etc.? But on your vertical channel, you can benefit from a lot of creative social media advertising, social media branding. There's a lot of angles out there for a young entrepreneur with a product that they have just brought to market. There's a lot of ways to get your name out there.

And it's not, Amazon's not the only game in town.

Kunle Campbell (26:36.734)
I like your point. Just going, taking a multi-channel approach is really critical now. First of all, 50% of sales occur on Amazon. What about the other 50%? And it really varies from direct channels that are discovered via social media, as you said, and other channels, a plethora of other channels like eBay and Walmart.

and several other channels to execute on. So it's a really good points there, really, really good points there. Out of curiosity, do you utilize Amazon ads at all at this point in time, or do you just stick with the eyeball traffic and popularity of the books?

Mike Ward (27:23.046)
Yeah, we're not using advertising right now. Yeah, it's on the books category, it's an interesting little sub market within Amazon that's kind of unique. Amazon really does bury the link to used books. They make it really difficult to find and difficult to get into the buy box at all. So the advertising doesn't, it wouldn't probably be worth the cost for us, but.

If your listeners are in a different category, certainly it would probably make sense to explore advertising there. But for us, it doesn't.

Kunle Campbell (27:59.362)
Okay. I was very, very curious about that because it's another problem. I've had conversations, I've spoken with a lot of other like Amazon merchants, and they they're spending more and more on advertising to the point whereby they're starting to ask if it's worth it, you know, or not, just due to the way it's cannibalizing on their margins on a net margins, they don't really have much and you know that

I believe Amazon advertising is, is now bigger than AWS, which is, which is wild, really, really wild, um, you know, from, um, from, with what they're doing, you know, so it's a, it's a B mouth, really B mouth rather. Okay. So let's jump right into another timestamp, a very significant timestamp, which is your, your DTC timestamp. When.

When did you start to take DTC seriously? And I would like you to paint a picture, your growth story with, with DTC seems very, very interesting with what, what you've done.

Mike Ward (29:12.23)
Well, there was an event that Amazon had where they raised their rates dramatically, their commission rates. And we'd always taken our direct to consumer platform very, very seriously. So we've always been growing it a little bit every year. But when Amazon changed their commission structure, we decided we were going to...

really begin to push on it in a big way and try to grow it. So I wanna say 2009, sorry, no, it was much later than that. Don't quote me on the year. Long journey, I've batted years. But we were able to push because of that impetus, our growth dramatically on our website.

Mike Ward (30:09.086)
really grow that customer loyalty. And so it just began to tip in our favor slowly but surely. And now we're where we're at, where we're have a majority of our sales coming on that channel.

Kunle Campbell (30:24.998)
Okay, so where do you think the activations came from? How did was, was it good SEO? Was it activations from, you know, inserts in your, in your books on that you sold on Amazon? How do you think it seems like you had to fly well? That just that just keeps giving up until now. Have you built traffic?

Mike Ward (30:49.118)
Right, so all of the ways that your listeners would probably also suspect, I mean, painting inside the lines to some extent, we're using advertising, advertising on Google, et cetera. The challenge for a big company like us with a lot of skews is how to do that effectively. I think most of our competitors and your other listeners

a low price item, it's difficult to know how to advertise. And that's something we've gotten very, very good at in terms of creating actively managed campaigns and segments that make sense, that it's not easily replicatable. But we just also grew that a little bit at a time using our same technological and innovation based process to just get better at it a little bit every year.

And so that's a big driver of traffic for sure. Our email program, as we have repeat customers, is a big driver of traffic. These are all things that are going to sound familiar to your listeners and typical tactics. I think what make us unique is our ability to look at the data behind it and to optimize for KPIs that are going to make those transactions profitable for us.

It can be very easy if you dive in head first into the world of Google advertising or email marketing, it can be very easy to lose money. And we've just been very good at analyzing the data behind it and in fine tuning it as we go, and that's made a lot of the difference, but the tactics themselves are, uh, are pretty straightforward. It's just how do you manage it with data?

Kunle Campbell (32:45.918)
Do you have an internal SEO team or do you work with an agency?

Mike Ward (32:50.186)
We've done both over the years, back and forth. We've gotten to a size now where it's part of our internal team, but we've had success both ways.

Kunle Campbell (33:02.262)
What about paid search, like on AdWords? Google AdWords.

Mike Ward (33:06.722)
Yes, it's the same. Yeah. So we are actually more focused on the SEM side than we are on the SEO side. The SEO tends to follow the SEM. So we definitely have optimized our pages for organic traffic. But we find, surprise, that the more you pay Google, the more boost you get on the organic side as well. Kind of a mysterious thing how that happens. But.

We'll leave the Google conspiracy theories for another podcast.

Kunle Campbell (33:41.378)
Yeah, interesting, interesting. And do you have any active communities around Thriftbox?

Mike Ward (33:51.13)
Yeah. So we have several, you know, we have a very active Facebook group, uh, where it's very reader oriented. It's run by our reader community, uh, really big active community there. We have a very successful loyalty program, which our customers love. So that's a way of keeping them engaged and keeping them plugged into the brand. And then we do a lot in terms of branding and just little things that

make the brand pop out on the packaging. And it's just, if you go to YouTube for instance, and look for thrift books, unboxing or opening videos, our customers are doing the advertising for us. They just love getting that teal package in the mail and oh, here's what I got. And they shoot a video of themselves opening it up and those get a lot of views. And so then we repurpose some of those and put them on Instagram and TikTok. TikTok community, hashtag book talk.

You know, is the big channel for books on TikTok. It's been a, that's been an interesting driver for our business. Uh, we've had, um, pretty good success on some of the videos we put up there. Um, that's not our channel per se. It's just, uh, it's just, you know, a channel that everyone participates in, but it's become really popular and books feel like they're having a bit of a resurgence amongst that TikTok generation, young generation. There's a lot of.

lot of new readers that are excited about books and excited about reading.

Kunle Campbell (35:23.246)
Mm hmm. Yeah. So on your website, you have a you've actually dedicated a section called book talk, which hashtag book talk rather. And it's a good point you made. It's like on social media through hashtags, the communities that already exist and brands

Kunle Campbell (35:53.366)
with the example you gave in regards to the unboxing experience, that is happening and essentially giving you more brand equity in these communities and you're able to actually even build your own communities through the Facebook group, which a lot of people discount, but it's a very, very good channel to notcher your core.

Kunle Campbell (36:24.847)
most excited customers, your most loyal customers. Speaking about loyalty, what are you doing in the loyalty? I mean, books have a lot of, there's a lot of opportunity with loyalty in books. I can imagine as in if you get lots of repeat customers, some people voraciously read books. So what does your loyalty program look like?

Mike Ward (36:28.67)
Right.

Mike Ward (36:47.634)
Well, it's a points-based program. And invite your listeners to go log in and sign up and see what we do. It's a points-based program similar to the way an airline might operate. The more you buy, the more points you get. And the points generate rewards for our customers. And those rewards culminate with a free book that they can get with an order in the future. So our customers love getting that free book.

And there's, it's a bit of that chase. And the other thing that's really made a difference, I think, is just the value that I think our customers are getting compared to what they're used to getting with a new book. I mean, you could buy five or six books and have them delivered to your door with free shipping for the same price as one or one and a half new books. It's just a, it's hard to.

hard to compete with that value proposition if you're a reader and you just want to read a lot of books and where are you going to go to get that many books at that price that are in a very good condition and have them delivered to your door. So it's that really feel good feeling that our customers get by getting a good value and relatively fast delivery and that's very satisfying combined with the reminders about

their points, their points totals, and then a reminder to log in and get their free book. It's a great program. It's been very effective for us.

Kunle Campbell (38:26.99)
that's um yeah it's a given the fact that your model lends itself very well um with repeat customers and i can imagine with average order value you know i don't think what average order value is 50 you know dollars or so because you know books are five dollars 15 10 you want to get that purchase frequency you know running and up and

Kunle Campbell (38:57.354)
So yeah, loyalty program is a given. What about shipping? What's your approach to shipping? Is it free shipping or not? What camp are you on? Camp free shipping or pay for your shipping?

Mike Ward (39:11.814)
Well, clearly customers love free shipping. So we do have a threshold. So if you get over the threshold and you can log on to the website to see how we do it, you can get free shipping. We do encourage people to get that free shipping threshold. It's not hard. Usually two, three books will be enough in your cart and it's under $20, you know, a typical sized order for...

a consumer purchase, we'll get you a free delivery. So it's not hard to get over that bar, and most of our customers do. If a customer opts to not go over that bar, then we just charge a flat rate per book for shipping and it's a couple bucks in that range and it's not exorbitant. But if somebody wants just one book and they just want to pay another couple bucks to get it delivered, that's fine too. We have a number of people that do that.

But most people will look at the hurdle and go, oh, that's not hard. Add another book or two that I want to read in the next month and I get free shipping. That's really easy for customers to do.

Kunle Campbell (40:21.726)
Okay, makes sense. So we've spoken about your website, which is super interesting. It's SEO, good structure. You've got nine million titles on your book. What about your mobile app? Have you got an app and what is the adoption for it if you do?

Mike Ward (40:41.318)
Yeah, we do have an app and we do get a good amount of usage on it. It's not our biggest channel, but it's well used. It's, it's up there. Um, w if you combine the app together with mobile web, then that would account for a majority, I would say of our, of our sales traffic. So some of our customers are opting for just, you know, the browser in the phone as their user experience, which is fine. You know, we, we have a mobile.

first development strategy. So when we're developing our user interface and our design and everything, we're making it look good and functional on a phone first and then on a desktop computer second. So we definitely see that most people are shopping on their phones one way or the other. And the app is a good tool. It has some native features built in that give it some advantage over.

the web version, you can scan a barcode of a book if you're standing in a store and you want to see how Thriftbook stacks up, just scan that barcode and see what our price is. So definitely encourage listeners to get the app. But it's a good experience on the phone, even if you're just using our mobile web, just using Safari or something on the phone.

Kunle Campbell (42:01.546)
What about your e-commerce platform in and of itself? Is it proprietary?

Mike Ward (42:06.258)
We use Microsoft.net stack. So it's all built in house. It is all proprietary, but our stack is built on Microsoft technology. So we have a central database and then a number of dozens of apps, some internal and some external that connect to that central database and manage things like feed management, pricing, repricing, inventory on the website.

serving images on the website, you know, all of those things, shipping, shelving, picking, pulling, all of those attributes are all software that we built in-house, but it's all using a really common framework, the Microsoft.net.

Kunle Campbell (42:52.402)
Okay, makes sense. And then search, search is a huge, it could be an advantage or it could, it could be your Achilles heel with 19 million titles, which change, you know, on a daily basis. What's your approach to search?

Mike Ward (43:08.47)
Well, we use our website team, has some people dedicated to that. We definitely agree with you. It's the primary place most people go. Most of our users we find know what they want and will begin a search with a book title or an author. Occasionally, that's not true. They're browsing a genre. And we try to make a good experience for that too.

But it searches again, just one of those things that we've iterated on and got better at over the years. So we just look at our conversion rate of people that put a search in, how often is that search resulting in an item going into a cart? And then we're fine tuning our search algorithms over the years to make it better and better.

Kunle Campbell (43:53.358)
I really like this convo. Book clubs, have you tapped into book clubs and what's been your experience with book clubs? Many are popping all over the place. They primarily, they typically start from podcasts such as this or Instagram or TikToks. How's that? What are you seeing from Thrift?

Mike Ward (44:12.11)
Yeah, you know, not directly. We just, it's part of our advertising. So it's a segment we've identified in terms of our customers that are part of book clubs. And we do like to advertise to them and send emails to them, you know, in terms of a direct relationship with book clubs. We had considered years ago and played around with some book club management tools that didn't end up panning out for us. But, you know, we just find most of our.

customers that are in book clubs are really just primarily looking for a good deal and they will find us on social media and they will find us on Tik Tok and word of mouth spreads around really quickly in a book club. So yeah, we have a lot of book club users and it's a segment that we put some of our marketing effort at, but you know, in reality we're, we're treating them in the same way we treat other segments, you know, like,

teachers in classrooms or just our top tier loyalty program people. We're identifying all these segments of customers and subtle differences to how we market to them. But fundamentally, they're all just readers. And so we find we win by just giving them a valuable offer and the right book at the right price and in the right condition. And then they come back.

Kunle Campbell (45:40.386)
Okay, makes sense, makes sense. I just searched for my name on your website and my book popped up, E-commerce Growth Strategy. They're both new. So this brings me, this brings you to another question. I thought you only sell new books. Sorry, used books.

Mike Ward (45:47.346)
Good.

Mike Ward (45:58.07)
No, we have a segment of our website that sells new books as well. So that's a growing part of our business. As you can imagine, it's difficult to keep best sellers in stock on the use side. You know, we're bringing in as many semi trucks and as many million pounds of books as we can to try to keep those shelves stocked, but occasionally they do sell out. And so it's been important to have.

have new books as an offer to it. And occasionally a customer will just prefer a new book. They might want to give it as a gift or something. And so that's something we're offering.

Kunle Campbell (46:36.178)
It's customer centric to give them a choice, really. It's customer centric. OK. Right. So Mike, is there anything I haven't covered that you'd like to speak about?

Mike Ward (46:51.27)
You know, the vision of the company when we first started it was to try to save as many books from going into the landfill as we possibly could and make money while we were doing it. And so I'm also just really proud of the effort we've made in terms of helping the environment and doing it in a way that has made profit for the company while we do it. We've saved, you know,

millions and millions of books from going into landfill. We've helped the environment, we've recycled books which saves trees needing to get cut down for pulp and paper. We're just really proud of being able to take those books that were previously getting thrown away and wasted and either recycling them, which helps the environment, or even better, putting those books back into the hands of a reader in an affordable way.

So we're helping the environment, we're helping readers, and we're helping literacy, we're helping primarily people that can't afford books. So we're giving a low cost alternative to people that might have previously thought they couldn't afford to buy books or read a lot of books. We're making it very affordable for them. So I'm really proud of that, I'm really proud of that. I'm proud of my time that I've spent building this company in all the roles I spent.

seven years as the CEO of the company. And currently I'm working as the chief innovation officer, which means I get to focus on all the fun projects that are across departments and do those really interesting, the most interesting things the company's working on, I get to focus on those. I'm just proud to be part of this company. I'm proud for what we do and I'm happy for the readers of the world. And I'm glad.

to be part of something where I feel like we've transformed a marketplace. There are previous to us, there really wasn't a thing like this where you could buy used books in bulk across a country and have it shipped to your door. If a customer wanted a used book, they had to go down to a small bookstore and choose from maybe a couple thousand books that happened to be on the shelf. Today with Thriftbooks and thriftbooks.com,

Mike Ward (49:14.182)
we can offer to customers 9 million books to choose from. And if we don't happen to have a used copy in stock, they can put it on their wish list and we're processing millions of books a week. We're probably gonna find that book they want really soon and we're gonna send them an email and say, hey, we found your book. It's just a, it's a new thing, right? It's not something that existed prior to us. And so I'm proud to be something.

be part of something transact transitional, transformational in the market. It's been really exciting ride.

Kunle Campbell (51:38.062)
Okay, I'm gonna have to just record this again. Sorry guys, sorry. No, so really, really phenomenal, really, really phenomenal there in regards to what you've done from the environmental standpoint. I mean, from my note, in the last five years alone, you've saved 8.5 million trees and you've reduced CO2 to the tune of 375 million pounds.

Mike Ward (51:41.343)
There you are.

Kunle Campbell (52:08.254)
It's phenomenal you've been able to have that environmental impact and you're tracking that environmental impact, reducing landfills and just reducing waste in general. And there's also the commercial layer to this. You're in a thriving $24 billion secondhand books market worldwide with 28% market share, dominant player in North America.

I have a handful full of books in, on my shelf that I've purchased from yourselves. So all the way from, you know, from, from where you are in Seattle, that there's an impact around the world. It's, it's really, really phenomenal. Just out of curiosity for, do you have any collection strategy or do we as consumers just pack our old books again, our books we've bought from Thrift Books?

and send it to our charities and thrift stores and then you do the last mile from there.

Mike Ward (53:07.654)
Yeah, we do have a beta program that is relatively new. We're still getting some of the kinks worked out of that, but we will buy back books, certain books from customers. As you can imagine, the postage to get those books back is really the killer. So we also are completely happy and supportive of our customers taking their used books and dropping them off at whatever thrift stores closest to them.

Um, that, that is the best way to get it back into the cycle. Right? So if, if they drop it off at goodwill or salvation army, they're going to collect it, they're going to, uh, consolidate it and they're going to sell it back to us. And we're going to be able to put it back in the cycle. If, if someone wants to take a, take a stab at our, our buyback program, those links can be found, but it is just a beta program. We're still, still working on it, but yeah, the best.

The most reliable way is just take that box you've got in your garage and go drop it off at the thrift store. It'll find its way back to us.

Kunle Campbell (54:10.442)
Yeah. Mike, before I let you go, what are your thoughts on generative AI and AI in general? How's that going to impact not just your business but for humanity and how we do business?

Mike Ward (54:25.882)
I think it is a very, very monumental development. And I am a pretty plugged in guy when it comes to technology. I was surprised when ChatGPT went public with their GPT 3.5 version, and now I'm using 4.0. And then you see a number of others, Google.

Microsoft who partners with OpenAI jumping into the race as well. It is really phenomenal, the leaps and bounds that we've seen in the last couple of years. I think it has a potential impact on e-commerce, on shopping, and it has a profound impact on our lives as well. I think we're still definitely figuring out how to use it. I know that the school teachers that my kids have classes from are certainly figuring out.

how to use it, how to navigate that. But it is a very, very valuable tool. I use it all the time. And in our industry, specifically around books, it is very, very useful. There are some interesting capabilities that are being unlocked by ChatGPT and others like it. All those big large language models are really well suited to text and to reading and to words.

and to language. And so it can tease apart things from books that were hard for us to get before, concise synopses, themes, and tones within books. It's very interesting what it makes available. So we're certainly on the road to leveraging that in our business. And I suspect others of your listeners will be doing the same.

Kunle Campbell (56:23.546)
Absolutely, absolutely. Particularly in advertising, in rolling out content. It's an army of staff, you know what you're doing. And I think prompt engineering education is a very

It's a very vital skill in comparison to just programming. I know programming is a given now for many of the youths and to survive in this digital world, but I think prompt engineering is key, is really, really important. You need to know how to drive that vehicle of AI.

Mike Ward (57:06.386)
Yeah, couldn't agree more. It's a, that that's really gonna be a skill that is gonna be developed. I think our young people are gonna need to figure out particularly how to write those good prompts. And yeah, couldn't agree more.

Kunle Campbell (57:22.046)
Mike, it's been an absolute pleasure having you for those who want to find out more about thrift books. It's thrift books.com. We've said it a number of times. I'm going to link to it in the show notes. I've sent you a connection invite on LinkedIn. We'll link to your LinkedIn. Are you active on any other social media platforms?

Mike Ward (57:40.338)
Now LinkedIn is going to be the best place to find me.

Kunle Campbell (57:43.766)
Fantastic, fantastic. We'll be looking forward to your content. Expect to get to stream of followers from the audience. And again, it was a really, really good conversation. Love what you guys are doing. You're making money and you also have an environmental impact. And, yeah, I really like this re-commerce angle of things. So thank you. Thank you again.

Mike Ward (58:07.078)
Yeah, I appreciate the time. It's been a pleasure to talk to you and hopefully been useful to your customers or to your listeners. Like I'm customer oriented, but you're listener oriented.

Kunle Campbell (58:16.522)
You are an I'm audience. No worries at all. Thank you. Thank you, Mike. Cheers.