Tony Nash

Tony Nash has built up his online bookstore, Booktopia, into an incredibly successful business with revenue of $7.54 million. So why is he moving into offline retail by introducing some of the first book vending machines ever seen in Australia?

“This is all about providing visibility to the offline world. I still come across plenty of people who haven’t heard of us, so putting our name out there is going to be something we’re focusing on.”

“These will be arriving in January and they’ll be out on location in shopping centres and hospitals, hotels and airports, where people can see the Booktopia brand,” he says.

Indeed, Nash has tried to bring elements of offline retailing throughout his online retail site. He admits the take-up of online retail in Australian has been slow and believes online businesses must engage in traditional branding and marketing practices that will put a digital brand in front of shoppers on the street.

“We’ve committed to bringing out 200 machines, and we’re expecting to increase that to 600 over the next three to five years. Not only does this enable us to have more books, publishers are very interested because they can get more products out there on the market.”

“We are the first Australian company to do this. There have been books in vending machines before but they haven’t been solely dedicated to that, and these are specifically designed for books so they’ll work much better.”

Nash says the company is attempting to take an offline approach in order to engage with customers and eventually bring them online.

“Quite often people just want to browse or be recommended a title, and it’s really our duty whether we’re online or in a shop to say ‘these are five you should look at’. You need to be able to filter choice and serve your customer.”

“That is where the bookstore knowing what is good to read and what isn’t good to read will always be of value. They know their stuff, and they will continue to get sales… and that’s part of why we’re bringing out the vending machines.”

The online world

Nash started Booktopia three years ago after selling an IT recruitment firm, and then giving up an SEO business. After struggling through the dotcom bust, Nashton stumbled upon the idea for Booktopia when pitching for some SEO work.

“My brother went and pitched some SEO to the company which handled all the website and distribution for Angus & Robertson, and about 80 or so other bookstores. The chief executive said they weren’t interested. But we asked how they set up a site, and it took literally 10 minutes to set up an online marketplace.”

“I asked how it worked, but he said that going purely online wouldn’t work, no one would make anything from it alone and you needed a retail presence as well to make money. Of course, I thought ‘I wouldn’t mind giving that a go’.”

Nash set up Booktopia on a budget of just $10 per day, using AdWords to gain early traffic. By the end of the first month, it had sold $2,000 worth of books.

“After that, we knew we had to develop our own site. During the beginning of 2007 we brought the site in house, and it’s just grown from there. We have begun to hold stock rather than just ordering books as they come available in order to reduce orders, and three months ago we moved from a 350 square metre facility to a 2,000 square metre facility.”

The rise of the eBook

The online bookstore’s future has been questioned by some analysts as the eBook continues to gain popularity. Amazon has already achieved moderate success with the Kindle in America, so how does Nash respond to the proposal that the eBook market is taking off?

“The American book industry is worth $38 billion. Of that $38 billion, not even $113 million was sold in eBooks last year, and I think it’s really important to keep that in perspective. Yes, it’s the new buzz, but the devices are too expensive and Australian eBook sales haven’t even reached $1 million yet.”

“People will choose eBooks to read certain things, but the quality of a paper book is so far more superior. In terms of books with a lot of images, the quality of print is so much better. And for kids’ books, in illustrations, printing will bring out the quality more. There will always be demand for paper books.”

But while Nash says the market is more of a niche offering, he believes the digital book readers are good for specific purposes.

“I enjoy reading some eBooks. I’m in my mid-40s, my sight isn’t as good as it used to be and I could just increase the font size on an eReader. But if you take the gimmick out of the offering, what is it really giving you? It’s a niche product, and people are going to use it if it’s giving a specific purpose.”

“So this debate about paper versus digital is just irrelevant. People still go to the movies. They enjoy the big speakers, the experience and the entertainment of it all compared to watching the same thing on a small screen at home, and it’s the same thing here.”

Making Booktopia better

Booktopia is continuing to grow, and more titles are being added to the company’s database each week. But Nash says the company is always looking for ways to improve itself.

“The biggest challenge is figuring out how to increase traffic and get the same type of returns when you’re online as when you’re offline. It’s all about how you can turn an online brand into an Australian household name, and that is the ultimate challenge. The fact people don’t know who we are when we talk to them reaffirms how much we have to do.”

“We also need to look at more efficient things in our business, from spending money wisely to introducing automated systems to save time, to reducing the amount of time on orders to serve the customer better.”