< Taking On Amazon

Transcript

Friday, April 20, 2012

BOB GARFIELD:  We should point out at this point that On the Media made many requests for Amazon to appear on this week’s show. But Amazon made nobody available.

 

Most publishers fear running afoul of Amazon, even big publishers. But there’s one, one very small publisher that seems to be fearless. Randall White of the Educational Development Corporation recently pulled all of his company’s books from Amazon, in protest of the company’s business tactics. Educational Development publishes educational books for children. Its biggest seller is a reassuring message to self-conscious youngsters.

RANDALL WHITE:  The title that sold the most is Everyone Poops.

  [BOB LAUGHS]

It sold over a million copies.

  [BOB LAUGHING]

But we do have great books, educational – science, history, nature, foreign language. But Everyone Poops is our number-one seller.

BOB GARFIELD:  You sell through bookstores but you have a big direct sales component, kind of like Tupperware parties. Tell me about it.

RANDALL WHITE:  We have around 7,000 ladies who sell books through the direct selling method. They can do fundraisers in schools, book fairs, home parties. So these are independent consultants working out of their house. It’s a very powerful sales force though.

 

And what’s happening now, with so many smart phones, they’ll make a sales presentation and among “oohs” and “ahs” and how wonderful the product is, pop out that smart phone, they go, well, I can get that cheaper on Amazon.

Well, there’s a basic rule of sales, and that is whoever makes a sale has to get paid or they quit. It really came down to one individual lady. She went into a school that had never seen our products before, presented them to ‘em and, and the school went, wow, I like these. And the next day she went back in to pick up the order and they’d brought it from Amazon. And so, that day I just decided I’ve got to do something better.

BOB GARFIELD:  So is it easy to get out of the Amazon ecosystem?

RANDALL WHITE:  We didn’t sell directly to Amazon. We sold through a large distributor, Baker & Taylor. So I was in touch with Baker & Taylor and told them, really, they’re killing my business, but they were such a big part of Baker & Taylor that they said, well too bad. So I had to terminate the entire Baker & Taylor account, which is substantial for us.

BOB GARFIELD:  And a very expensive decision for you, at least at first blush. How has it worked out?

RANDALL WHITE:  An article was written about us in The New York Times.  I have been overwhelmed with the response, just because of that article – from individuals, stores, other publishing companies, other people in the industries, not even ours, music industry have called me and said, congratulations, that took some big ones. A guy called me who was the vice-president of a regional chain with 65 stores and said, thanks for standing up for retail stores.

 

As it turns out, we’ve been trying to get in his chain, and that day we opened the account. So I can’t tell you how heartwarming it is for the public to support us in this decision.

BOB GARFIELD:  But I have to ask you whether what you’ve done indicates that David can defeat Goliath or whether it indicates that what you’re really protecting is a business model that just doesn’t work in an Internet world?

RANDALL WHITE:  There’s a company that we are very familiar with that started seven years ago, and they sell only in the direct selling method. And in seven years they’ve built 500 million annual sales. That doesn’t sound like a dead channel to me.

 

The problem is you can’t have a woman sell to her friends and the next day find find it cheaper someplace else, ‘cause they think their friend has cheated them.

BOB GARFIELD:  What’s gonna happen?

RANDALL WHITE:  Well, I believe our 7,000 ladies are gonna be so happy now that I’ve untied one hand behind their back, that they’re gonna talk a friend into joining them, and we’re gonna have 14,000 people selling books. And our sales are gonna double. That’s what can happen, if you get it right.

BOB GARFIELD:  All right, man. Well, thank you very, very much.

RANDALL WHITE:  Okay, thanks.

BOB GARFIELD:  Randall White is the chief executive of The Educational Publishing Company.

Guests:

Randall White

Hosted by:

Bob Garfield