She Built an Online Used-Bookstore. Can It Last? | 100 Entrepreneurs

Do you have books on your shelf that you flipped through once and never opened again? The used-bookstore Duozhuayu wants to buy them from you

In a two-story loft in Wangjing, Beijing, Wei Ying takes in 600 books a day and sells 500. Apart from a work area with a few desks, the room holds eight bookshelves, the books sorted and arranged as they would be in a library.

Out in the hallway, two staff members in their early twenties wipe down book covers with rags, next to two sterilizing cabinets the size of refrigerators.

This is the office of Wei Ying's startup, Duozhuayu, an online used-bookstore. It buys books at 5-20% of the cover price, refurbishes and sterilizes them, then resells them at 30% — all of it built on the city's courier and logistics network. The service runs in Beijing, Shanghai and Hangzhou.

Take QDaily's own recent test: we sold five books. One of them, A Book of Seasonal Flowers (《四季花传书》), cover price 78 yuan, was bought from us for 7.8 yuan. Three days later it sold for 23 yuan.

"What I actually want to build is a circular business, and used books are a good way in," Wei Ying said.

An online used-bookstore built on Bookoff, Douban and Zhihu

The idea for Duozhuayu came from BOOKOFF, a used-bookstore chain in Japan. Founded in 1990, it is now the largest brick-and-mortar secondhand chain in the country.

BOOKOFF makes its money this way: buy used books in decent condition from people at a tenth of the cover price, wipe off the marks, clean them up, then resell them in its stores at half price and keep the difference. You can tell the books on BOOKOFF's shelves are not new, but they carry no obvious signs of use — no notes, scribbles or stains that couldn't be removed.

BOOKOFF is neither a dealer speculating on antiquarian books nor one of those dim secondhand shops in the corners of a city that sell books by the pound. Its refurbished used books sit in bright, orderly stores; browsing them feels no different from browsing an ordinary bookshop, and the books carry none of the marks or the smell of old books.

Wei Ying is trying to do something similar, and also makes her money on the spread between what she pays and what she charges. But Duozhuayu has replaced the storefront with a website, and both the buying and the selling run through the city's express logistics and e-commerce systems.

Start with buying. Duozhuayu lives mostly on a mobile website. You point your phone's camera at the ISBN barcode on the back of a book, and the site shows a price at a tenth of the book's cover price. The books have to add up to 20 yuan, or five titles, before Duozhuayu will come get them. Once you've scanned a book and confirmed it has no unremovable stains and hasn't been water-damaged, it goes to review.

"We don't take exam-prep books, we don't take health-and-wellness books, we don't take anything published before 2004, and we don't take inspirational fluff. Then there's theory that's obviously out of date — books about the internet industry fall into that trap easily, like a 2005 book on social media marketing," Li Chan said, explaining what fails review. Most of that work is done by machine.

"Honestly, just looking at the publisher screens out a big chunk of the exam-prep and the parenting books," Wei Ying said.

Review takes anywhere from a few minutes to an hour, after which Duozhuayu sends a courier to the user's door. The five books I sold last week, one or two kilograms in all, were picked up by SF Express on a cash-on-delivery service Duozhuayu arranged.

"Which courier we use isn't fixed. Some users are moving house or moving to another city and might sell off dozens or even a hundred books at once, so we switch to a different service," said Li Chan, who runs product operations at Duozhuayu. They have also used freight services; when there are a lot of books, that can be cheaper than a same-city courier.

The books all come back to the Wangjing loft to be refurbished, which mostly means cleaning stains off the covers and the pages — wiping them down, sanding some marks off with sandpaper.

Then they are sorted and shelved. Within a day of an order, the book is pulled off the shelf, put into an ozone sterilizing cabinet, then shrink-wrapped on its own and shipped.

As for buying, Duozhuayu has built itself an e-commerce page made mainly for phones, with the entrance placed inside the "Duozhuayu" WeChat official account. You order, a courier delivers — no different from buying a book on JD.com or Dangdang.

The homepage also carries reading lists. Some are categories Duozhuayu treats as a guarantee of quality, like "Douban rating above 8.5" and "Imaginist," the literary imprint. Others are put together by its own team: a list called "Your Taste Is Odd" holds The Invention of Curried Sausage (《咖喱香肠的诞生》) and This Book's Title Can't Describe What's in This Book (《本书书名无法描述本书内容》), while "Art Is Personal Expression" holds But to Bear Witness to Humanity (《而是为人性见证者》) and A Theory of Art Entrepreneurship (《艺术创业论》).

Buying or selling, Duozhuayu doesn't feel much like a pure trading "platform." It has a clear taste. The books on the homepage are mostly literature, history, philosophy and social science, plus originals in English and Japanese.

You won't find exam-prep books for students, and the women's self-improvement titles that fill the big bookshops aren't there either (they've been judged inspirational fluff). Even in the internet-industry shelf, guides to specific programming languages rarely show up.

These rules have a lot to do with Douban and Zhihu. "The users we're aiming at are basically Douban plus Zhihu," Wei Ying said.

Before starting the company, Wei Ying was head of marketing at Zhihu; Chen Tuo, the co-founder who handles technology, ran community development at Douban. Duozhuayu's founding employees all come from those two companies.

"There really is a market for every kind of book — parenting, exam prep, whatever — but I can't start out building a brand for a hundred million people. I can only start by serving the people around me who genuinely love reading," Wei Ying said. Launching first in Beijing and Shanghai followed the same logic: more than half of Douban's and Zhihu's early users were in those two cities.

The influence of Douban and Zhihu goes beyond taste. Use Duozhuayu's search and you'll find that every book title turns up, though many are marked "out of stock" with a "notify me" option. That's because Duozhuayu's book data — titles, ratings, prices — is scraped from Douban's public listings.

Some Duozhuayu users have told us that search can be frustrating, because it feels as if so many books just aren't in stock — and search is how people are used to shopping on an ordinary book site.

For now Duozhuayu would rather steer users to a timeline-style page of what's available, or to its reading lists. That is partly because it doesn't yet stock that many titles, and partly Wei Ying's own thinking.

"What I want to encourage is the circulation of good books. A book isn't only your personal property. If the content is valuable, it can go round again and be read by someone else. A used book you buy on Duozhuayu, you should feel free to sell on."

Not a traffic business

Wei Ying says she doesn't want to be in the traffic business.

That has to do with where she's been. As a student at the Communication University of China, she liked setting up a stall on the campus walkways to sell her own used books and other things.

After graduating she did marketing at internet companies including Sohu and Zhihu. She loves Japanese culture, travels to Japan often, and likes browsing local secondhand shops for goods in circulation. In 2015, still at Zhihu, she began studying the secondhand business with a view to starting a company of her own. BOOKOFF was one of the cases she looked at.

Then Xianyu, Alibaba's secondhand trading platform, came to her. "At the time I thought what they were doing fit what I wanted, so I went. But later I found that what they wanted to build wasn't quite what I had in mind. Xianyu wanted to be a traffic platform, like Alibaba's Taobao — in the early days they were willing to put up with a certain amount of chaos in return for traffic. What I wanted to build was a circular business." Wei Ying stayed at Xianyu less than a year before leaving to start her own company.

But e-commerce is a traffic business at its core. Of everyone who looks at a page, only some place an order, and fewer still finish paying; each step is a funnel. So you need as many people visiting the site as possible to get sales up.

Duozhuayu can't dodge the word either, and its situation is more complicated: it needs traffic on the selling side and on the buying side.

The quality and quantity of the books coming in decide what Wei Ying and her team can offer. Duozhuayu has written its rules on the buy-back page and put them in a prominent spot on its WeChat account, and still some of the books that arrive are stained or too worn to sell again.

This is also what users complain about most. If a book can't be resold, Duozhuayu doesn't pay for it; a user who wants it back has to pay the return postage or come collect it. Books unclaimed after a week are sold as scrap paper.

The harder problem is the cost of logistics. If the number of people sending books in goes up while each of them ships only five books at a time, the more shipments there are, the more logistics cost Duozhuayu carries — and the weight of the books adds to that. Working out how to bring those costs down with the logistics companies is no small challenge for the model.

The site is only six months old, and it has already started changing the rules. Free shipping on buy-backs has been replaced by users covering 10-30% of the postage.

The flat one-tenth buy-back price has also been split into 5%, 10% and 20% of cover price, depending on how new the book is and how fast it will move. For brand-new, unopened used books and foreign-language books, buyers now pay more than 30% of the cover price.

Logistics and warehousing costs are also why Duozhuayu has opened in only Beijing, Shanghai and Hangzhou. It isn't only that the early users are in those cities; it is that collecting books across cities costs too much to ship.

Recirculation as a business

Wei Ying says she does eventually want to move into categories beyond books, though that is still at the research stage.

It would be much harder than selling books.

"A book's appearance is standardized — it's more or less a rectangular box, and the public information about it is the easiest kind to get," she said. That is why she picked books as the way into a secondhand business.

Duozhuayu has no trust problem between the shop and its users right now, because books are already the most transparently priced product on the market.

But with furniture, clothing or home décor, it would be very hard for Duozhuayu to become the trusted middleman between two users. How do you verify that a piece of furniture that comes in is sound? How do you then get users to trust the platform? Wei Ying plans to build a user trust system on the foundation of selling books, but accumulating that credit data through book sales is not quick.

The bigger uncertainty may be how people here think about spending.

The rise of BOOKOFF, the model Duozhuayu is copying, has to do with Japan's 20 years of weak economy.

Since growth slowed in the 1990s, and after a string of disasters natural and man-made — earthquakes, the nuclear accident, and more — a good many Japanese have been cutting back on consumption and expenses. BOOKOFF's way of letting people resell and buy used books cheaply but with dignity caught on. By 2013 its annual revenue reached 305 million yuan. Having built out the bookstore chain, BOOKOFF moved into secondhand homeware and clothing, and today those shops sit side by side.

China's book market, meanwhile, is still at the stage of encouraging consumption — buy more new books, whether or not you ever finish them.

Last year, China's spending on books reached 70.1 billion yuan, up 12.30% from 2015, and sales through e-commerce channels are growing 30% a year. Among the top-selling categories, the fastest growth is in children's education and teaching aids — exactly the books Duozhuayu believes have no value in later circulation.

What the whole market encourages is the act of buying a book.

Even as many new books get more expensive, on Amazon, JD.com and similar channels a brand-new book sells at around 60% of the publisher's list price.

To compete with that and offer a price worth taking, Duozhuayu will probably have to price well below new books on the e-commerce platforms, and bring its shipping costs down at the same time.

"My only worry is that the idea of 'used' won't be accepted," Wei Ying said. What they are doing, after all, is not very consumerist.

"What I hope is that we can get more people to start using secondhand goods, and that this works back up the chain — that it encourages the manufacturers and designers upstream to design products that hold up over time and are more worth passing on."

Cover image: stocksnap