Latest / Small Business Success with Fexingo: Local Companies, Main Street Stories, and Community Commerce / How a Local Bookstore Used a Rare-First Model to Beat Amazon
Transcript
- Lucas: Luna, have you ever walked into a bookstore and found a book you didn't know you needed—something that felt like a secret? Luna: All the time. That's why I still go to bookstores. The algorithm doesn't surprise me anymore. Lucas: Right. And that's exactly the feeling that a small bookstore in Portland, The Wandering Shelf, decided to bottle. They stopped trying to carry everything and started carrying only things you couldn't find easily online. Luna: So they went niche, but like, hyper-niche? Lucas: Yes. The owner, a woman named Sarah Kline, told me she realized that the only way to survive against Amazon was to stop competing on selection and start competing on discovery. So she flipped her entire inventory model to what she calls 'rare-first.' That means every book on the shelf is either a signed first edition, an out-of-print nonfiction title, or a small-press literary novel you've never heard of. Luna: Wow. So basically she's running a treasure hunt, not a bookstore. How did she get the inventory? Lucas: She spent six months building relationships with estate-sale liquidators in the Pacific Northwest. She'd show up to previews, buy entire lots of books for pennies on the dollar, then sort through them at her shop. She also started a 'book detective' service—customers could request a specific title, and if it existed, she'd find it within a week. Luna: That's a lot of labor. But I imagine the margins are better than new books—used books have a much higher margin. Lucas: Exactly. New books typically have a margin around 40 percent, but used books can be 70 to 80 percent if you source cheaply. Sarah told me her average cost per book is about $1.50, and her average selling price is $18. That's a twelve-times markup. But the real magic is the average transaction value. Luna: What is it? Lucas: Forty-eight dollars. The industry average for independent bookstores is around twenty-two. Because when customers come in for the hunt, they typically leave with three or four books. One rare find, a couple of curated recommendations, and maybe a small-press poetry chapbook. Luna: So the curation itself is driving basket size. That's smart. But how did she get people in the door initially? Lucas: She started with a weekly email called 'The Shelf Note.' Every Thursday, she'd highlight one book—usually a first edition under $50—and tell a two-paragraph story about how she found it. Within three months, the open rate was 68 percent, and people started coming in specifically to buy that book. Luna: So the scarcity plus the story creates demand. That's a classic collectible strategy—like what sneaker resellers do. Lucas: Exactly. And she trained her staff to be 'book detectives.' Every employee has a small budget to buy books at estate sales or thrift stores. They get a commission on anything they sell. So the staff is incentivized to find hidden gems. One employee found a signed first edition of Toni Morrison's 'Beloved' for fifty cents—sold it for eight hundred dollars. Luna: That story alone is marketing gold. You can't buy that kind of authenticity. Lucas: Right. And the word of mouth spread. Within 18 months, foot traffic was up 62 percent. The store now has a waiting list for people who want the 'book detective' service. Sarah said she's turning down customers because she can't keep up with demand. Luna: That's a good problem to have. But how does she handle the economics of a rare-first model? I imagine the inventory is slow-moving compared to a traditional store. Lucas: It is. The inventory turns about 2.5 times a year, compared to 4 or 5 for a typical bookstore. But because her margins are so high, she can afford to hold books for months. She also has a consignment section where collectors place books on her shelves. She takes a 30 percent commission, so she has no inventory risk there. Luna: So she's essentially a marketplace for collectors. That's a low-capital way to expand selection. Lucas: Yes. And it creates a virtuous cycle: collectors bring in rare books, which attract serious buyers, who then buy the curated shelf, which increases the store's reputation, which attracts more collectors. Sarah told me that some collectors drive three hours to visit the store. Luna: I love that. It's the opposite of the 'everything store.' It's the 'only-here store.' Lucas: That's exactly the phrase she uses. And it's a lesson that applies beyond books. Any small retailer can ask: what can I offer that no one else can? It doesn't have to be rare books. It could be vintage vinyl, custom furniture, or locally sourced ingredients with a story. Luna: Right. The key is to stop trying to beat the giants at their own game. Instead, change the game entirely. And if you're listening and this kind of strategic thinking has helped you in your own business, I'll say what we've said before: conversations like this are only possible because listeners support the show directly. If you find value in these episodes, you can help keep them ad-free at buy me a coffee dot com slash fexingo. Lucas: Yeah, it really does make a difference. And speaking of changing the game—let's talk about one more tactic Sarah uses. She hosts a monthly 'First Edition Friday' event where she brings in a local author to sign their book. But here's the twist: she only invites 20 people, and tickets are $10, redeemable toward any purchase. Luna: So it's a paid event that drives sales. That's clever. It creates scarcity and a guaranteed audience. Did it work? Lucas: Sold out every month for the first year. Average attendee spent $65. And the authors love it because they get a dedicated crowd. Sarah said the events now account for about 15 percent of monthly revenue. Luna: So she's essentially built a community around discovery. That's what big retailers can't replicate—the human element of surprise and connection. Lucas: Exactly. And that's the core insight. Sarah told me, 'Amazon can sell you any book in the world, but it can't make you feel like you found something no one else has.' That's the moat. Luna: I think that's a great note to end on. Thanks, Lucas. Lucas: Thanks, Luna. See you next time.