EDC bucks Amazon, Retools Home Book Sales

 

Pitching in on a night shift at the warehouse or offering advice on packing boxes isn't usually in the job description for a company president and CEO.

Neither is dancing on a desk when the stock price hits a milestone. Or posting funny videos to a Facebook fan page started by two sales consultants.

But for Randall White, it's all part of the fun at Educational Development Corp., the children's book publisher and distributor he joined in 1983. The company took the No. 2 spot in this year's Oklahoma Inc. rankings, up from No. 22 in 2014. 

EDC sells to bookstores, online and through multi-level marketing. It's the sole U.S. distributor of the popular, award-winning Usborne line of children's books from the United Kingdom. The company also owns Kane Miller Publishers, an international children's book publisher.

We have the best products in the world, said White, who became EDC's president and chairman in 1986. It's all educational.

Revenues for EDC were $32.5 million this year, compared to $26 million last year. The company's fiscal year ends Feb. 28. Most of the growth came from its Usborne Books and More division, the network of independent sales consultants who sell from home, at book fairs and through virtual shows on Facebook.

The children's print book market is a $3 billion a year business. It has fared better than its adult counterpart as those other consumers have increasingly jumped into e-readers and reading apps on tablets and smartphones. But reading print books is still the top activity choice for children under 10.

Children need to learn to hold the book, turn the page, read from left to right, top to bottom, chew it, whatever, White said. The latest statistics show reading on a Kindle or other device, your reading comprehension is about 75 percent of a printed book. It's fine for adults or on a plane, but kids learn to read with a physical book. Our books are designed to draw children into them — the high color content, the high picture-to-word ratio.

White's biggest gamble came in 2012, when he ended sales to online giant Amazon.com Inc. Publishing colleagues, and at least one board member, thought it was a crazy move.

One of our sales ladies called me crying after missing out to Amazon on a $600 sale, White said. I don't like our sales ladies to call me crying. It's my least favorite thing. So I said, 'That's it.' We call her the straw woman, because that was the straw that broke the camel's back.

The gamble paid off. White's move landed the company on the cover of trade publication Publishers Weekly, with an illustration of EDC as David and Amazon as Goliath. He earned goodwill from independent bookstores and the company's sales consultants, who were tired of people using their stores or book parties to showroom books that were later bought online.

They didn't even know we were alive. It didn't affect them, White said of Amazon. People don't understand the impact it has on local economies. Amazon wasn't paying sales taxes, but we were paying sales taxes.

On the publishing side, EDC sells Usborne and Kane Miller products to about 6,000 retailers, including Barnes & Noble Inc., independent bookstores, toy stores and museum stores.

They are very loyal. They're very appreciative of what we're trying to do, because we are among the few companies where you can't simply scan a barcode and then buy from Amazon, White said. You can still buy them from third-party resellers on Amazon, but we can't do anything about that.

EDC had about 7,000 direct sales consultants by midyear. It's added about 9,000 consultants since then.

Keeping those multilevel marketing consultants motivated and happy is a huge task. From time to time, White goes out to the shipping dock to send his signature Randall boxes, leaving a note and signing a box of books destined for a sales consultant. White, a big Oklahoma State University fan, will also take that opportunity to tease consultants he knows are University of Oklahoma fans. Top sellers have been rewarded with trips to Ireland and the Atlantis resort in the Bahamas.

These Facebook parties have just exploded, White said. When they're happy, they tell people. It's the same technology (as Amazon): sales over the Internet. But our sales people are getting paid.

The virtual sales parties on Facebook — which peak on Tuesday and Thursday nights — have led to a few growing pains, White said. The company had to buy extra servers to deal with the additional orders through its website. And it added a night shift at the warehouse for the first time. Employees have grown to more than 180 people, up from 75 last year.

White said EDC's Tulsa warehouse operations fall into three categories: Picking, checking and packing. It's expensive to ship books, so he emphasizes checking to keep returns to a minimum. The warehouse has about 7 million books.

The Oklahoma Inc. rankings crunch company financial results through June 30. White said growth since summer has continued at a breakneck pace. To deal with the demand, the company is in final negotiations to double its warehouse space at a site about a mile away from its current 105,000-square-foot facility in Tulsa.