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Bookstore trend: 321 Books opens brick-and-mortar store to take on Amazon



In the age of Amazon and e-books, it can be a tough business for brick-and-mortar booksellers. 

But all signs point to a resurgence in print sales. In May, the NPD Group reported that print book unit sales in the United States increased 3 percent in 2016 over the prior year.

This rings true in the Tampa Bay area, as local booksellers report strong sales and continued growth. Tampa’s Inkwood Books is moving from its Hyde Park bungalow to the up-and-coming Tampa Heights neighborhood, nearly doubling its space along the way. Meanwhile, St. Petersburg’s historic Haslam’s Bookstore, which has been family-owned since 1933, remains a steady, local icon.

321 Books, with a brick-and-mortar shop that’s been open for less than a year, is a newcomer on the scene. But it boasts a unique business model that stands up against the might of Amazon, where the Clearwater-based company actually got its start as a used bookseller. Co-owner Tim Russell says 321 Books is setting the mold for how books will be sold in the future.

How it began

It was originally founded by Bobby Hauske as “a one-man show,” says Russell. Every day, Hauske would travel around the region to sift through used books at thrift stores. He used specialized software to determine which books would yield the most profit when sold online. Sometimes he made as much as $600 a day. 

“He’d buy them cheap and then sell them on Amazon,” Russell says. “He was doing pretty well. He was actually doing much better than I thought a person should do by themselves.”

Nearly two years ago, Russell invested in the company. With his backing, they began buying used, overstock books by the ton from charitable organizations that initially received them as donations. To keep up with online sales, they opened a warehouse on 118th Avenue North in Clearwater, which allowed them to scan and list books faster than ever.

Initially, $7 was the benchmark price for books that would earn them a profit through Amazon. 

“We’d get maybe $2 or $3 back at that price,” Russell says. “But we’d have to buy 75,000 lbs. of books in order to wind up with 2,000 to 3,000 lbs. that we could sell.”

Then, earlier this year, Amazon changed the rules.
 
“They changed how much they took as commission. Now, in order to get $3 back, we need to sell a book for $18,” he says. “It’s nearly wiped out the third-party bookselling business. Guys like Bobby driving around in his truck, they’re going out of business.”

The number of books they couldn’t sell online for a profit began piling up and the company’s recycling bill began to grow. For a while, it looked like Amazon’s changes might just put them out of business.
 
An alternative to Amazon

With the news about Amazon’s changes to online bookselling, 321 Books had two choices. 

“One solution was that we shut it down,” Russell says. “The second was that we find a way to have a brick-and-mortar store. The recycling bill was out of control. We were throwing away so many books.”

When he joined 321 Books, Russell, a Largo native now living in St. Petersburg, and his wife envisioned it as an opportunity to give back to the community. The couple already owned several successful businesses in various sectors. They weren’t looking to get rich selling books. 

“This was our charitable arm. There’s no reason we can’t act like a charitable organization and not be a nonprofit,” he says. “We choose to donate a lot of books. The overriding goal was to seal this business up because it makes money and have a charitable heart.”

He’s given away thousands of books -- to schools, children’s organizations, civic groups, nonprofits. 

“Any charity, any school, anybody who calls me and says they want books, we’ll give them to them,” Russell says. “That’s the goal of the company. To get them out there and keep them out of the recycling bin.”

Books still piled up, though. In March, Russell held a book sale at Minnreg Hall in Largo. They sold thousands of books for $1 apiece and donated the remainder -- about 8,500 -- to Pinellas County Schools. 

“It was a win-win for everybody,” he says. “We knew the market was there. We knew we could sell books inexpensively. It’s not rocket science to sell a $2 book.”

He began looking for a space to open a permanent bookstore, an old grocery store, maybe 50,000 to 75,000 square feet. The bookstore could double as a community space for meetings, workshops and other events.

Then he was approached by Simon Malls, which offered him 10,000 square feet -- a former Gap clothing store – at St. Petersburg’s Tyrone Square Mall for below market rent. Borders Books & Music, which once called the mall home, went bankrupt in 2011, leaving Tyrone Square without a bookstore.

Though it was smaller than they’d hoped for, 321 Books signed a temporary lease and opened in April.

The idea was simple. They would sell their overstock books, books they couldn’t sell online, books that otherwise would have been recycled, for low prices. A hardcover goes for $3, paperbacks $2 and mass markets $1 – hence the name 321. Many of these books are worth significantly more than the bargain prices they’re being sold for, Russell says.

The response has been tremendous from the beginning, he adds. Nearly 30,000 books fly from the shelves each month. Every night, they need to restock the store with at least 1,000 books from storage. “It’s going better than we ever imagined,” he says.

The future of 321 Books

In August, Simon offered them a permanent lease. 321 Books has been approached by malls around the state. Many mall owners tell Russell that surveys show them the number one thing shoppers are missing is a bookstore. But only a store like 321 Books would work in this market, he says.
 
“I could open this in Orlando tomorrow, Tallahassee tomorrow. Every mall would want us,” he says. “But while we’re a hot commodity, we’re never going to be a Barnes & Noble, a super exciting corporate profile, highly polished place. You’re never going to see that kind of bookstore again. There’s absolutely no way to make money selling new books. You’re never going to see a new Barnes & Noble. I promise you.”

321 Books is the future of how books will be sold, he says. “It’s the only thing that’s going to stand up against Amazon. It’s worked really well for us and literally saved the company from the recycling bill and Amazon. Now we have this business model that we can expand and franchise out.”

Russell adds, “But it’s real work. They’re books. They’re heavy, and remember, you’re selling them for $1. So you’ve got to sell a lot of them. Basically it boils down to you’ve got to love books. Nobody is going to retire from this business a multimillion dollar bookseller. You’ve got to wake up in the morning excited to sell books. If you’re not, then you don’t want to do this.”

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Read more articles by Tiffany Razzano.

Tiffany Razano is a Pinellas County-based writer and editor covering the City of Clearwater and other news and features in the Tampa Bay region for 83 Degrees.
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