Andrew Crawford: fear is the biggest obstacle to success

It sounds like a suicidal business plan: going head to head with Amazon, selling books over the internet. But "just because Amazon is the biggest internet book retailer, doesn't mean you can't enter the market", says Andrew Crawford, 37. "It just means you have to think of clear differences between yourselves and them." And having the guts to go ahead has paid off for the Gloucester-based entrepreneur, who has built a £41m-a-year business due in no small part to his own experience of working for Amazon.

The son of an Irish businessman, who worked for an international trading business in Africa, Crawford spent his early years "getting held up at gunpoint at airports, from Sierra Leone to Liberia". An engineering graduate, he later worked for an agricultural franchise run by his father in the Midlands, before joining a small internet firm called Book Pages in 1996. An early foray into the dotcom arena, Book Pages was bought out by Amazon in 1997. Crawford spent the next three years learning about everything from supply chains to how to handle enormous increases in sales. In 2000 he left, after cashing in some stock options, and immediately began planning a similar online book retailer that would stand apart from other booksellers.

With £10,000 in savings, in 2004 he set up the Book Depository in a 500 sq ft office in Gloucester. A local government scheme aimed at partnering entrepreneurs with academics saw him join forces with Bath University's computer science department to develop his own logistics system. "Although we couldn't get the same terms as Amazon from publishers, we could operate from a lower cost base." That was because, thanks to the new system, books would pass in and out of his warehouse within hours. "We wouldn't hold stock. The UK is the centre of the book industry. There are more books here than anywhere else in the world. So from a supply-chain perspective, we're very central."

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He also offered customers free worldwide delivery, a smart marketing move "which gave us a really good competitive advantage". Most importantly, he focused on what he calls "the long tail" of the market, selling books that big high-street players would never stock. "WH Smith and Tesco can fight over core titles. That's where all the competition is. We concentrated a lot more on rare titles." These included books on everything from thermodynamics to knitting books that would never make the bestseller lists, but where there was a clear demand from niche readers.

By selling through internet channels, including Alibris and Amazon, "we were running a very cash-positive business. We were getting money from our customers the same day, but we didn't have to pay our suppliers for 30-60 days." Sales hit £2.2m in the first year, rising to £11m in the second, £26m in the third and £41m last year. This year, he expects to sell £60m worth of books. "Someone who wants to start up their own business first has to recognise the risks. That's the big stumbling block. But if you can get over the whole fear factor, you can do very well. If you've got a good idea and other people think so too, go with it and worry about the consequences later."