PUBLISHED JULY 2015
by Maria Jesus Rojas, Elisa Yuste, Jose Antonio Vasquez, & Javier Celaya
Direct selling, also known as the B2C model, is defined as selling products directly to consumers without the intervention of distributors or other intermediaries. In the 1800s, manufacturers discovered that they could sell directly to customers through catalogs. In the 21st century, the Internet and e-commerce have strengthened the ability to sell all kinds of products directly to consumers, although there are international copyright issues to address.
The main disadvantage of direct selling is that the responsibility for selling and distributing content falls on the manufacturer. For this reason, companies often enlist the help of third parties. The main reasons companies like direct selling are because it helps keep prices low and because they are able to give their customers faster, more personalized service.
Direct selling on the Internet allows publishers to integrate all the B2B processes into their online platforms without having to go through traditional distribution channels. This way, publishers can offer more dynamic prices and customer-centered added-value services such as recommendation systems linked to users’ browsing and purchasing histories, access to purchased content on several different devices, personal libraries, and discounts on content.
The primary added value of direct selling for publishers is getting to know their customers and their shopping habits better, along with getting to know how customers make use of their products and services. [See “Marketing Whatever You Have to Market: Place Opportunities and Issues,” in this issue.]
Publishers that are known for their catalogs and/or that cover niche markets are better positioned to make the most of this opportunity. Consider O’Reilly, for example. It sells directly to its customers without excluding other channels such as Amazon, Barnes & Noble, and Apple, and it has access to valuable information that helps it adjust its content, sales, and marketing strategies.
One thing O’Reilly has learned is that the preferred format for its readers is PDF; 50 percent of the total number of downloads are PDFs rather than EPUB or MOBI files. This might seem surprising, given O’Reilly’s reputation for revamping standards in the e-book world, but it makes sense because many of its readers work in IT and often read at their desks, and the PDF format allows them to do so.
Other things that O’Reilly learned thanks to its direct contact with customers include that the iPad was the most often used reading device among its most tech-savvy readers, and that 46 percent of its readers preferred using their laptops and PCs for reading, probably for the same reason that they choose PDFs over other formats.
O’Reilly was able to learn all this and more because it asked its customers directly. Based on what it learned, O’Reilly can now develop new questions that will generate even more information on its customers’ habits.
Examples Here and Overseas
Over the last three or four years, formerly small-scale companies have grown to the point that direct selling has become a distinctive feature of their business model.
One of these companies is Librosdecomunicacion.com, a website launched in 2012 by the Spanish publisher Comunicación Social Ediciones y Publicaciones, which specializes in books on communication, journalism, advertising, sociology, the press, radio, television, the Internet, and cybermedia.
The website was created to sell this publisher’s books in their digital format directly to customers and thus make its texts available to a wider audience at the lowest price possible. The e-books, which rarely cost more than $6, are available in PDF and EPUB formats, and some of them are DRM-free.
It is also worth mentioning Leer-e’s pioneering initiative in the e-book world and its gamble on direct selling. This Spanish company, which now focuses on digital publishing and the sale of e-books around the world, launched its platform in 2005. Since then, two of its initiatives have stood out from the rest. The first is its Palabras Mayores collection, which rescues discontinued and hard-to-find print versions of books by reissuing them as
e-books. The second is its Libr-e collection, which lets its authors sell directly to their fans in e-book format.
In 2013, Leer-e partnered with the German platform Bookwire.de to work together not only as aggregators but also as publishers selling content directly to consumers. This alliance has given the German digital aggregator distribution rights from Leer-e’s digital catalog, including some by such internationally acclaimed authors as Gabriel García Márquez, Isabel Allende, and Carlos Fuentes. Thanks to this agreement, as well as others reached with several publishers, Bookwire’s catalog of more than 60,000 e-books is now available to readers across Europe and in Latin America.
Verso Books, which has offices in London and New York, also actively applies the direct selling business model. Specializing in translations of works on topics such as politics, sociology, economy, and philosophy, it throws in the digital version of a book free when a customer buys the print version, and it offers free shipping to anywhere in the world, confronting the Achilles’ heel of direct selling.
Verso’s aims are to establish direct contact with its readers, to offer them all its content and information directly, and to increase the visibility of its entire catalog with each sale, none of which is possible when consumers buy their books on Amazon.
Penguin Books recently launched a pilot project to sell e-books directly through a new website of the famous old Pelican imprint. It allows readers to read streaming content via a cloud reading service. And HarperCollins is now selling all its books, including e-books and audiobooks, directly to consumers through HarperCollins.com. Like other retail sites, HarperCollins.com offers promotions, specials, and discounts for both print and e-book editions. Also, the company is offering free shipping on print titles.
Serving the Sellers
Growing interest in direct selling and the opportunities that digital technology has created for publishing have driven service initiatives.
For instance, Kbuuk, a self-publishing platform based in Houston, TX, and founded by Isaac Shi and Dougal Cameron in 2011, began by offering basic publishing services and then transferred its platform to its cloud-based Pubsoft arm, streamlining its marketing services and online sales model to let publishers and authors manage authors’ websites, upload e-books, sell directly to readers, and share profits.
Publishers and authors can create their own e-shops through Kbuuk, transfer as many documents as they want to e-book format, optimize content for Internet searches, and get ready to start selling. Kbuuk includes a cloud-based HTML5 reader so that customers can read content on any browser, and the reader also allows them to underline, make notes, and share content on social media sites.
The platform itself is intuitive and easy to use. Its customizable templates are usable on sites and in documents and texts to be published. Its most interesting feature is, without a doubt, the ability to keep track of sales in real time, down to the time, place, and format in which an e-book has been sold. This tool can be very useful for new, small-scale, and self-publishers that want to target a particular niche market or that want to know who the most influential readers of its books are.
Options for self-publishers selling direct also include using BookBaby’s BookShop, and publishers that want to do the same can use Slicebooks to create their own store apps for selling whole books or parts of books.
A platform in Spain provides another example of new services. Combining direct selling with a “social payment” system, byeink, which is cloud-based, allows users to create and directly sell their e-books in just four easy steps. Its simple process takes authors from publishing their texts to creating metadata to managing their publications to distributing them in such a way that their e-books can be promoted on social media sites such as Facebook, Twitter, and Google+, or through embedded QR codes. All these services are free.
The novelty of byeink is its “social payment” system. To upload chapters of an e-book (or sometimes the entire book), people must first tweet about the book or comment about it on Facebook instead of paying for the book with money.
byeink also offers e-books for sale via PayPal, which makes it easy for publishers and authors to sell their books directly from their own websites or blogs and to reap the main benefits direct sales afford—getting to know their readers better, and staying informed about how their book sales are going.
María Jesús Rojas, Elisa Yuste, José Antonio Vázquez, and Javier Celaya work at Dosdoce.com, a website dedicated to the analysis of new technologies in the book world that has released more than 40 studies and reports since its launch in 2004. This article is derived from its report “New Business Models in the Digital Age”, sponsored by CEDRO, a nonprofit association of authors and publishers of books, periodicals, and other publications published in any medium, which aims to protect and collectively manage their proprietary intellectual property rights.