We figured we cannot do worse than following Warren Buffett’s model in summing up the year in a letter to our stakeholders and other interested parties.
The greatest hits and lessons spring up immediately from the noisy details of the day to day.
We’ve seen markets change and come and go, and some stay the same (or change but people still think they’re the same). We’ve seen relevant sales channels dry up, and new ones spring up in their place (or just down the road a stretch).
In our fifth year, Book Driver processed over 100,000 books that were destined for the trash heap, spread over 475 pickups in 2019.
We developed and solidified relationships with 1054 friends and partners.
Financial Performance
We made strong gains in average price sold of books on average which grew 32% year over year.
Return on capital invested was down year over year. Beginning in 2013 we had a growth of capital through 2016. Our lending activities with Accion, Amazon and helped add inventory, equipment and working capital that more than paid for itself.
However, 2016 revealed the downside of debt finance; the ability to finance mistakes. When we undertook the turnaround of Coyote Ridge Books, we strove to raise sales by 25% within 3 months. This did not occur. When this didn’t occur, there was not going to be enough free cash flow to cover operations and additional interest payments.
A fundamental shift will be to focus more on financial activities that are real-estate backed instead of reliance on institutional and business lending. All potential acquisition will go through a rigorous validation and risk -scoring process.
Five years ago when we learned of the scope of the trash problem, well it gave us pause.
We learned that 875,000 books are thrown out per day and this is a number we will seek to re-validate in 2019.
Once we started to tackle the problem, we learned that much of this was due to oversight—no resources on the ground for libraries (particularly) to capitalize on their natural role as a book donation drop-off site. They were making piddling profits on book sales and even having to pay outside vendors to hold them.
Books were being tossed in the garbage under cloak of night to avoid bad publicity. Meanwhile, in a different newspaper section, libraries are being squeezed of their funding 12 times til Tuesday.
We are book lovers. If we see books being piled up in dumps, we feel sad.
We see book people being squeezed within an inch of their resources (and breaking point), we want to help.
We made some strides this year in establishing new trade routes for books.
We were using as our model both new (Uber, Air BnB) and old (the ancient Silk Roads, the Chicago Way).
We wanted to save these books, build a sustainable business using the models of the best of today. They say that stealing is the way of the best artists.
Rescuing recycled materials (paper) and building this into our product line, like many successful media businesses (NY Times, Chicago Tribune).
What we’ve done that’s unique is…
Connecting the big (libraries, non-profits, and schools) with the small (individual donors and buyers).
We closed our retail store this year. We figure that that will end up dominating our news this year. Sad! Well, the bittersweet nature of the retail business is not lost on us—We love being able to personally connect with local book buyers! But nor are we nostalgic. We look forward to the new opportunities available to us in a more nimble, mobile state.
Our biggest lesson of the year….
The bookstore’s existence was necessary for our growth, both in operations and in outreach, but its continuation is not.
We will focus on three areas in 2019.
Wholesale
Bringing new opportunities for wholesale buying to small(ish) booksellers.
Mission Focus
Relationships: Continue to build networks with non-profits, schools, libraries, and other institutions to keep books out of landfills and get them into the right hands.
Jobs: Employ more drivers.
Expansion: Move into new markets in the Great Lakes and Pacific region.
Operations Process
Establish self-scheduling pickups via calendar online.
Acquiring freight capabilities to ease the shipping process for wholesale buyers, and for our institutional pickups.
Thanks to everyone who helped us this year—we know there are many seen and unseen kindnesses and supports out there—and felt inspired by our mission to donate books, to pick up books, to figure out ways to process more and more books, and to the motivated booksellers and book curators who keep the lively community of stores, libraries, schools and nonprofits connected.