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19th in a series of occasional articles on venture businesses

Staff writer

SAGAMIHARA, Kanagawa Pref. — Conventional wisdom says it takes 10 years to gain the skills to appraise used books. Takashi Sakamoto, president of Book Off Corp., a forerunner in franchised stores selling secondhand books, shortened this to two months by simplifying the pricing process.

“I was 49 years old when I decided to start a chain of stores selling secondhand books. If it takes 10 years (to become a connoisseur), it would be too late for me. So I started thinking about simplifying the (appraisal system),” Sakamoto said.

Sakamoto takes credit for introducing the notion of purchasing used books from consumers at 10 percent of the regular price and then selling the books for half the list price after cleaning them with a specially designed machine.

When a shop already has five or more books of the same title in stock, the book is priced at 100 yen. Books that remain unsold for three months are also priced at 100 yen.

These simple rules enable those without a special knowledge of books to deal in secondhand books, unlike conventional secondhand booksellers, who judge the value of books based on experience and knowledge. “We don’t handle ‘culture’ contained in books. We regard books as commodities just like cups and noodles. … Our staff doesn’t know about the contents of books. But they have the knowhow to run a store,” Sakamoto said.

Since May 1990, when Sakamoto opened his first shop here, the chain has grown to 316 stores nationwide, including those directly managed by Book Off Corp. and franchise stores. About 95 percent of the books sold at these shops are brought in by customers.

This method of marketing recycled books generated 6 billion yen in sales in the last business year. Sakamoto estimates sales will grow to 8 billion yen in the current business year.

He attributes his success to the so-called no-discount system for book retailers that protects the publishing and book-distribution industries. As the no-discount system does not apply to secondhand books, it creates a niche for entrepreneurs.

Under the no-discount system, price is not a factor in competition, and booksellers stay competitive due to differences such as shop location and size. New retailers are thus discouraged from entering the conventional book market, causing the industry to slump.

“There are no come-from-behind victories in this industry. Although I admit that the no-discount system used to contribute to the industry before, it should be abolished now. The system is harming the industry. I consider the system to be a more serious threat to the industry than the fading interest of young people in reading,” Sakamoto said.

In May, Sakamoto opened the chain’s first shop overseas, in Honolulu, to test out how secondhand Japanese books would sell outside the country. About half the books at the shop are categorized as “new secondhand books.”

When retailers have unsold books, they are allowed to return them to wholesalers within a certain period as they are prohibited from selling them at a discount.

Sakamoto noted that about 30 percent of newly published books are returned to publishers after failing to sell at stores, becoming new secondhand books. “It’s like killing five birds with one stone. Publishers want to sell returned books, which they have little choice but to dispose of. People living overseas want to pay less for Japanese books. And it is wasteful to dispose of books,” Sakamoto said.

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