Paul Sansone: The triple bottom line of people, planet and profit

Better World Books seeks to combat illiteracy, to reduce trash sent to landfills and to make money. This three-fold strategy is a new model for social enterprises, says the company’s chief financial officer.

Better World Books came into being in 2002 when three Notre Dame students were disappointed by the pittance they were offered when they tried to sell their used textbooks back to the bookstore. They began to wonder whether the Internet -- then still new as a marketplace -- might help them resell their books.

That inspiration led to the creation of Better World Books, an online bookseller that accepts unwanted books from individuals and libraries and contributes to literacy efforts by donating books, money and volunteer hours to the cause.

They work with domestic and international nonprofit organizations to educate adults and children.

Paul Sansone“Our brand promise is that every book that we sell will help fund literacy initiatives around the world,” said Paul Sansone, the company’s chief financial officer.

Sansone also said that the company has recycled or reused more than 100 million books, thus reducing some of the two billion books a year that go to landfills.

“There’s real value in solving others’ problems, whatever line of work you're in,” he said.

Sansone spoke with Faith & Leadership while at Duke recently for a conference on sustainable business and social impact at the Fuqua School of Business, which also included Missy Sherburne of DonorsChoose.org.

The following is an edited transcript.

Q: A lot of people would think there are only two categories for businesses: nonprofit or for-profit. How do those two things connect?

The DNA of the company starts from three Notre Dame students in 2002. They went to the Robinson [Community Learning] Center in South Bend, Ind., and asked to run a bookdrive on behalf of the center if they could use the center’s name and some space in their offices, and they would split the proceeds with the center.

They said, “Sure, we have an empty conference room and we’ve got an Internet connection” so the students ran a book drive on behalf of the Robinson Center and split the proceeds, which ended up being about $20,000.

The Robinson Center said, “Wow, this is money that we would never have raised ourselves, and all we gave up was some unused conference room space.”

So the three graduates developed a business model that helped the nonprofit and created a sustainable business. At that point, they talked about incorporating as a nonprofit. The thought was ... that if they could commercially act like a for-profit, that they may be more sustainable over the long term than a nonprofit that had to constantly chase grants and grant funding to survive.

We’ve actually changed our articles of incorporation to show that we’re going to make decisions that benefit a larger constituency and I think we’re starting to see that that’s a movement.

We’re one of the first certified B corporations; the “B” stands for benefit, and it’s a family of social enterprises that are in all different industries. There’s around 700 certified B corporations.

So 150 years of capitalism in the United States has led us to this point and social enterprises are taking a different tack. They're saying, “It doesn’t have to just be about the shareholder. It should be about stakeholders.”

Q: When you look at your model, what do you think are the innovations that your company has had that might be applicable in other contexts?

There’s real value in solving others’ problems, whatever line of work you're in.

We work with so many library systems and [we] heard from librarians, who said, “Hey, I’m not an e-commerce company. My constituency group is my community. I have this problem with books that I have to get rid of.”

So how can Better World Books step in and make that frictionless? Well, we’ll pay for the shipping on books not needed anymore by the library. In some instances, we’ve gone to libraries to help them weed their system because they didn’t have the funding. We sell those books on over 50 online marketplaces and then provide a commission back to the library and a nonprofit literacy partner of their choice.

I think if you can find some mutually, beneficial relationship, you're going to be sustainable. I think that’s a lesson learned for any organization.

Q: What makes your organization sustainable?

We started with that book drive, taking something that was perceived locally to be of no value and seeing that there’s a marketplace out there.

We ship to 230 countries every year. We’ve got a huge, loyal fan base of people who want to buy books, and we’ve done it with transparency, to partner with sources of books that give us a low-cost inventory advantage.

We’re not a traditional bookstore that might have to go out and buy the inventory from a publisher. We’ve got this used-bookstore-based model but it’s a supply chain that we’ve garnered through relationships with universities and public library systems with transparency in reporting and making sure that they're getting the right commissions.

Q: What about individuals? I noticed on your website it says “Donate,” and you can get a shipping label and ship books off. Do individuals get that commission as well, or are they giving more like a traditional donation?

We’ve got a buy-back model, so you can type in your ISBN and we’ll pay you for the book if we think that that book may have some value on resale. If we don’t think it will, we’ll just say, “Please donate it to Better World Books.”

There are only three outcomes to that book. The book is either put up online and sold, donated to one of our over 100 nonprofits who ask for it, or it’s recycled.

Any three alternatives to a landfill are so much better for those books. So when we say, “Donate,” we’re saying, “A good outcome is going to come from that book no matter what.”

We also do college book drives. We’re on 3,000 campuses. We have 3,000 or so library systems that are clients and partners of ours. So public library systems, and academic library systems send us books.

We have community-based drop boxes in 18 states. Our arrangement is with the landlord who has that parking spot, and we say, “We’ll commission you for giving us those books, and/or we want you to pick a nonprofit that’s going to benefit from the sales of those books.”

There’s a tag number for that drop-box. So when it comes into the warehouse we’ll scan that tag number so that we’ll know it came from a shopping center in Cary, N.C.

We put a bar code on the side that identifies that book and then it’s immediatelylisted on more than 50 different marketplaces around the world for sale. So it’s not just www.BetterWorldBooks.com. It’s Amazon. It’s Alibris, Abe Books, half.com.

When somebody buys it off a marketplace, it comes down off the other marketplaces and we ship it to that customer.

So the “secret sauce” is our technology that’s behind the scenes making this scalable and making it all work. It goes down to the individual book level. We can pull a book off a shelf and tell you where it came from, who are the partners, when was it received, when was it scanned, what marketplaces it’s up on, what price it is.

Q: One of your core company values is providing a good place to work. Why is that important?

We’re a very strong believer increating a really healthy work environment that creates stability, loyalty and being a great place to work. We have a lot of different initiatives that go above and beyond what you might see in a typical company.

For example, we give two days off every year for every employee for days of service. All you have to do is report back as to what service project you worked on.

We partner with over 100 different nonprofits. They need feet on the ground all the time so we typically do one domestic and one international trip a year. We pick 10 folks out of a random drawing and they will go to work with the nonprofit. The employee learns about the impact of the company’s funding to our partners [for example] by teaching English to kids with those partners in South Korea for a week.

Because we’re a for-profit, we’re a firm believer that people should be compensated fairly for what they do, so we have stock options plans.

And over time, that’s a competitive advantage for us because we have sharper, better people who want to work with us because it’s not just a job for them. They feel like they're part of something bigger. So to us, it’s also a strategic advantage for the organization to be better positioned.

Q: How are you looking at the long-term sustainability, with e-books, etc.?

We think we have a long runway with the physical book. There are hundreds of billions of dollars of book inventory in the field, so to speak, that becomes today’s inventory for us. So when we look at that, we say, “There’s a lot of inventory out there. Our company’s still growing organically with most of our revenue being a physical book.”

But we also know that digital books is the fastest-growing part of the book marketplace. So in the U.S., the book market is $40 billion a year. About $2 billion of it is digital books, and that’s growing.

We have offered e-books on our site since October so at www.BetterWorldBooks.com you can buy a used book, you can buy a new book, and you can buy an ebook.

We’ve got a sustainable model and there’s a whole set of valuable assets that are out in the field, so to speak, that can be repurposed. We’re going to continue to grow our DVDs and CDs businesses and other items that also have barcodes, such as games and puzzles. There’s life beyond books for our company.