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: So you walk into a bookstore. Not a Barnes and Noble. I mean a real independent shop. The shelves are packed, the lighting is warm, and there's a glass case near the register—inside, a single copy of a novel. It's a signed first edition, priced at $250. And it's already spoken for. Luna: That's the model we're talking about today. A bookstore that doesn't try to compete with Amazon on price or convenience. It competes on what Amazon can't do: curation and rarity. Lucas: The shop is called The Last Word, in Portland, Oregon. Owner Sarah Mitchell opened it in 2019, which—if you remember—was the height of the 'bookstore apocalypse' narrative. Amazon had just crossed 50% of all new book sales in the US. Borders was gone. Barnes and Noble was closing stores. Luna: And yet she opened a bookstore. I remember reading about her and thinking, that takes guts. Or maybe a certain kind of stubborn optimism. Lucas: Turns out it was strategy. Sarah didn't open a general-interest bookstore. She opened a rare and signed first-edition shop, with a small selection of new releases and a curated backlist. Her thesis was simple: Amazon is great for getting you a book fast and cheap. It's terrible for discovery—for the serendipity of finding something you didn't know you wanted. Luna: And rarity adds a layer. A signed first edition isn't something you order with one click. It's a treasure hunt. Lucas: Exactly. So let's talk about how she built that. Sarah spent her first year cultivating relationships with small publishers and authors directly. She'd go to book fairs, track down authors doing limited signings, and buy small lots—sometimes just 10 or 20 copies of a signed run. She built a database of collectors, mostly via email and Instagram, and would alert them when a new arrival came in. Luna: And that was the beginning of what she calls the 'First Look' membership. For $50 a year, members get an email 48 hours before the general public when a rare book arrives. They can claim it before it hits the shelf. Lucas: Right. And here's where it gets interesting. The membership isn't just about access—it's about community. Members get invited to private author events, usually over Zoom or sometimes in person at the shop. Sarah hosts a quarterly 'First Edition Club' where members get a curated signed book shipped to them. It's essentially a subscription box, but hyper-curated. Lucas: And that matters because Sarah's margins are actually better on rare books than on new releases. A new hardcover from a big publisher costs her about 50% of list price. She sells it at list, maybe a small discount. On a signed first edition, her cost might be 30% of the selling price because the scarcity lets her set a premium. And she's not competing with Amazon because Amazon doesn't have those titles. Luna: Let me jump in with a number. According to the American Booksellers Association, indie bookstore sales in the US grew 12% year-over-year in 2025, and that growth is continuing into 2026. Meanwhile, Amazon's book unit sales declined 4% in the most recent quarter. The narrative of the bookstore dying is reversing. Lucas: And shops like The Last Word are part of that reversal. But I think the key insight here is that Sarah didn't try to be a smaller version of a big store. She leaned into the one thing a big store can't do: deep curation and scarcity. Luna: There's also a behavioral economics angle. Scarcity increases perceived value. When you know there are only 20 copies of a signed book, and 15 are already claimed, you're more likely to buy at a premium. That's the endowment effect in action. Lucas: And Sarah uses that consciously. She'll announce a new arrival on Instagram with a countdown: 'Five copies left, two already claimed.' It's not manipulative—it's honest scarcity. The books are genuinely limited. But she's transparent about it. Luna: So how many members does she have now? Lucas: As of this spring, about 400 active First Look members. That's $20,000 a year in membership revenue alone. But the real impact is on sales. Members account for roughly 40% of her total revenue, even though they're only about 10% of her customer base. They're her highest-value customers. Luna: And they're sticky. Once you're in that club, you're not going to switch to a different rare book dealer easily. The relationship is personal. Lucas: That's the other element. Sarah sends handwritten thank-you notes with every purchase. She remembers what members collect. If she sees a first edition of a certain author at a book fair, she'll text a member before she even buys it. That kind of service is impossible to automate at scale. Luna: It's the opposite of Amazon. And that's the point—she's not trying to beat Amazon at its own game. Lucas: Now, is this model replicable for other small businesses? I think there's a general principle here. Every local business has something that a giant competitor can't offer. It might be expertise, it might be community, it might be the physical experience of discovery. The trick is to identify that unique asset and build your business model around it, not around trying to match the giant's strengths. Luna: And to be willing to be smaller. Sarah's shop is only 800 square feet. She doesn't have a children's section or a cafe. She's not trying to be everything to everyone. Lucas: That focus is hard for a lot of entrepreneurs. There's a temptation to add more product lines, more services, more square footage. But sometimes the most sustainable path is to do one thing exceptionally well for a specific group of customers who will love you for it. Luna: Before we wrap, I want to flag something. We do these episodes every week, and they take research, editing, and production. We deliberately don't run ads on them. If that choice has value to you—if these conversations have moved your work forward in some small way—there's a simple way to support it. Lucas: Yeah. It's buy me a coffee dot com slash fexingo. That's it. No tiers, no rewards, no perks. Just a way to keep this ad-free if it's worth a couple of dollars to you. And if it's not, that's fine too. We'll keep making them. Luna: I think that kind of listener-supported model actually aligns with today's topic, in a way. It's about building something sustainable by focusing on the people who genuinely value it, rather than trying to monetize everyone. Lucas: That's a good connection. So back to The Last Word. Sarah's latest experiment is a 'rare book subscription' where members pay $100 a month and receive one signed first edition per month, curated to their taste. She launched it three months ago and already has 50 subscribers. That's $60,000 a year in recurring revenue. Luna: And I bet those subscribers feel like insiders. It's not just a transaction; it's a relationship. Lucas: Right. And that's the enduring lesson. In an era of algorithmic recommendations and one-click ordering, the human touch—curation, scarcity, personal connection—becomes more valuable, not less. The key is to find the thing you can do that no algorithm can replicate. Luna: I think that's a perfect note to end on. Next week we're looking at a different kind of scarcity model—a local bike shop that uses a waitlist for repairs to build demand. Lucas: See you then.