The rise of Amazon and other e-commerce retailers has devastated big book selling retailers, but a local second-hand bookstore has leveraged online sales for its benefit.
Greg Murphy, owner of partner businesses Murfbooks and Dollar Book Swap, said his concept of buying used books in bulk and reselling or recycling them brought in a little under $2 million in revenue last year. Now, he is preparing to expand from the company’s Dayton warehouse by adding a 20,225-square-foot retail store in Kettering.
“The money is in the garbage. The money is in the stuff people don’t want,” Murphy told me, speaking at his company’s Webster Street warehouse, across from Mahle Behr.
The business started out while he was getting his master’s degree at Wright State University and he started selling textbooks back online. The side venture snowballed and, while he never did complete that MBA program, his business now sorts 60 tons of books each week and employs about 20 on the north side of Dayton.
His first business, Murfbooks, buys books in bulk to recycle or resell online and his later venture, One Dollar Book Swap, is set up in the same warehouse to resell the books that are in higher demand for $1 each.
Murphy said he is now planning to grow the second-hand book retail business with an additional store at Wilmington Plaza that will be easier to access and have better visibility to passing shoppers than their original retail shop set up in an industrial neighborhood.
His business model is to get the most cash out of every book, whether that’s stripping the binding and selling the material for recycling, flipping the book on Amazon or reselling it at his retail store.
Along with that store, Murphy said his goal is to open other retail stores in Cincinnati, Columbus and Indianapolis.
“We can’t sell 30 tons of books in Dayton, so we need an outlet beyond our region,” he said.
The store, which Murphy said is heavily shopped by mothers and teachers, also sells books, CDs, DVDs and records. Shoppers put together grocery bags with all the books they can fit for $10.
His business model has thrived with low back-end costs. It’s relatively cheap to build inventory by sorting out the best books from truckloads of salvaged literature. He’s had strong success with low cost Facebook advertising campaigns.
By having a cost structure where its cheap to build up inventory, Murphy’s book store model has found success while first edition sellers have been struggling. In fact, he noted that his employees are still receiving books with Borders stickers that need picked off before they can be resold.
“It’s the new book stores that are devastated by Amazon. Not used book stores. There are some big independent book stores doing really well, but they don’t have the same cost structure as a new book store,” he said.