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Interview with Red Room founder and CEO Ivory Madison

Some of you may be familiar with Red Room, a social network and marketing platform for authors that boasts superstar members like Margaret Atwood, Naomi Wolf, Jonathan Lethem, Erica Jong, Salman Rushdie, Dave Eggers, and Amy Tan. What you may not know is that on October 24, Red Room launched the “the world’s only authors’ bookstore” in an effort to go head-to-head with Amazon as a book retailer. Now when someone buys a Red Room author’s book through the Red Room website, that author receives an additional 15% of the retail price on top his/her royalties. This gives authors (and any author can join Red Room) an incentive to link to the Red Room bookstore from their author websites. Here’s Red Room founder, CEO, and Editor in Chief Ivory Madison with details about Red Room’s new online bookstore.

Red Room began as the Red Room Writers Society in 2002, where Madison personally helped hundreds of aspiring and professional writers complete their books. A frequent keynote speaker and panelist on writing, entrepreneurship, and social media, she has been a guest lecturer to the faculty and writing coaches at the Stanford Graduate School of Business and the Stanford Publishing Course. Trained as an attorney, Madison was Editor in Chief of her Law Review, interned at the California Supreme Court, and served as a Law Fellow at Americans United for the Separation of Church and State. Her adventures have also included episodes as a New Orleans restaurateur, radical feminist politico, and torch singer at the Plush Room. Her feminist-mafia-noir graphic novel, Huntress: Year One, was published by DC Comics in February 2009 and is now in its second printing. It tells the origin story of a strong female superhero. Madison is twenty-nine.

MW: What gave you the idea to create a Red Room online bookstore?

IM: Well, it didn’t make any sense to me that authors were doing all the work marketing their books—on Red Room, Facebook, Twitter, and other sites—and then handing the profits and the customer relationships over to Amazon. We wanted to change that and dramatically improve the future for authors.

I’m also concerned about the stranglehold Amazon has on our culture and our
industry. Jeff Bezos was a hedge fund manager who evaluated numerous retail
categories looking for the one with the biggest upside at the time, which
was books. I think I read it was almost women’s shoes. To Amazon, books are
a retail category, period. But to you and me, books are *not* just another
retail category. They are the world of ideas. They are our culture. They are art, politics, parenting, history—books are everything. Books change the

The reality is that at least half of all book sales have moved online. Of
course we want you to shop at your local independent bookstore, and people
reading this blog probably do more than the average American, but most
people buy most of their books from Amazon. We want back that half of
American book sales that take place on Amazon. They make more money from all
of their other products, so we can take back books and they won’t even feel
it because we’ll be buying everything else on earth from them. And
regarding independent bookstores, we’re trying to figure out right now how
we can support them through Red Room. One idea on the table is to allow
shoppers to pick an independent bookstore, and we’ll give that bookstore
part of the profits. We want to preserve book culture, and there may be a
way to do that *without* ignoring that most consumers buy from large online
retailers and are not going to stop. So we’ll build an online retailer that
supports book culture.

As a side note, I’ve *always* wanted to run a bookstore; I love bookstores
and libraries. I worked at Book Passage [a local independent bookstore]
when I was fifteen years old. In my twenties I looked into opening my own
bookstore, but economically, I could see it was an almost impossible
business model. I used to go to the library all the time, before the
Internet. One of my [unpublished] novels stars a librarian working at the
San Francisco main branch.

MW: Does the Red Room bookstore carry all Red Room authors’ books? If not, why not?

IM: We carry about 95% of our authors’ titles. Since we don’t want our authors to miss a single sale, if we don’t carry it, we offer a link to other retailers. We’d like to carry 100% of our authors’ titles. Right now, we’re working with the largest distributor in the world, and they have almost everything, but we will work with other distributors, too, so we can fill in the gaps.

MW: What does an author have to do to get stocked in the Red Room bookstore (and how much does it cost)?

IM: Soon we’ll be selling *all* books, not just the books by our authors. So you’ll be able to find any book on Red Room that you can on Amazon. It’s completely free for you to join as a “Community Member” and for us to stock your book. Free to shop. And consumers don’t need to set up a public profile in order to shop.

However, just because your book is stocked, doesn’t mean readers will find
you. If you’re an author, you’ll want an annual “Premium Membership” so you
can take advantage of how we help you market your book. When you’re a
Premium Member, your profile looks and feels different with numerous
additional features. We’ll showcase all of your titles on your homepage, and when
people view your book, they’ll see a personal note from you about it, what
other authors are recommending it, and lots of other premium benefits
designed especially for authors.

Premium Membership costs $250 a year. For authors doing the math, part of
that is you get unlimited “Red Room Royalties” of *15% of your book sales*, so unless you sell fewer than about 85 books a year, you’ll make back your membership fee and be enjoying Red Room for free, and we’ll be sending you checks. Also, we know that authors who are really broke need this program the most, so we offer scholarship rates for authors in financial need—if you’re an author who can barely pay, send me a note, we want to help you be a part of this.

And I want to reiterate that people who aren’t marketing their book—readers,
journalists, librarians, publishing industry folks—can all create a profile and blog and shop and participate for free.

MW: To clarify, although all authors will eventually see their books stocked in the Red Room bookstore, only premium members will benefit from the 15% commission?

IM: Yes, in the near future, we’ll be selling “all” books and ebooks, at which time only authors who are Premium Members will get “Red Room Royalties” (15% of their sales).
So, at that point, if you’re an author there are three possibilities: Your book could be for sale and you aren’t a member (no benefits or special marketing), your book could be for sale and you are a free “community” member (same—you get nothing), or your book could be for sale and you are a Premium Member (so you get all the benefits).

MW: Besides the 15% Red Room royalties, what other advantages are there for authors selling their books through Red Room?

IM: IM: Ah! I forgot to mention the biggest thing. We call it “Red Room Relationships,” and it means that for the first time in history, you meet your book buyers. Imagine if you had the names and contact info for everyone who bought your last few books, so you can market directly to them on your next project. For a bestselling author, this could change your life.

On the author side, the author writes a customized thank-you note for each of
her book titles in which the author can say something that pertains to that book,
and then the note is automatically sent to her book buyers. The customer’s info then gets sent to the author’s “customers” file. Red Room is a social network, so this is similar to when people like you on Facebook, but it’s much more useful, because it shows their real name, ZIP code, what book they bought, and when. Readers are *excited* about being connected to their favorite authors—that’s why they don’t generally opt out.

When I talk to bestselling authors, like Po Bronson or Maxine Hong-Kingston, the thing they are most interested in is not the money, it’s the customer relationships. Think about if you’ve sold millions of books and if you had all the names of all of those customers, so you don’t have to start from scratch when your next book comes out. “Red Room Relationships” can deliver that if an author plants the seeds wherever they link to buying their books.

MW: The Red Room website states, “We’re not offering a new publishing model, we’re offering a new retail model.” Can you explain what that means?

IM: Sure. Right now, everyone is talking about disintermediating the publishing supply chain, meaning cutting out publishers and printers and agents and distributors, leaving only the author and the reader with whomever is attempting the disintermediation (Amazon, for example) in between. Red Room’s model doesn’t cut any of these traditional players out.

Despite the big hype around a few successful self-published books, most
books being purchased are traditionally published books, and despite the
excitement about ebooks, at the moment, the majority of books being sold
are still print books. So how can authors make more money on the majority
of books selling today? We’ve come up with a way. You can double your income if you successfully route your sales to Red Room.

Why should you give Amazon your customers, anyway? Red Room’s new retail
model breaks down what I call “the retail wall” between the author and the
customer. It’s going to change everything. Authors do all the work marketing themselves all over the web—we make it possible to close the sale with exponentially more benefits.

We give you some of the most important benefits of an author’s collective,
except that you don’t have to take turns dusting the shelves or cleaning
the kitchen. Just update your blog, please. I know some readers are going
to say, I’d rather clean the kitchen!

MW: Amazon heavily discounts books. For example, the list price for Haruki Murakami’s new hardcover, 1Q84, is $30.50; the Amazon price is 50% of that—$15.25. What motivation is there for readers to buy books at list
price through Red Room when they can get them for half that on Amazon?

IM: This is the million—wait,* **eight-b**illion*-dollar question. Our first task is to eliminate every other advantage Amazon has, and then we will be in a position to address this. First of all, studies have shown that price is not the primary reason people shop on Amazon. The number one reason you buy on Amazon is because you’ve bought previously from them and they have your credit card info and shipping address on file. That’s referred to as “convenience.” And shows how important initial customer acquisition is.

Also, Amazon often only discounts books 20%, and the majority of
books only 2-5%. Once we’re selling a higher volume of books, we may be able to compete on price—so buy on Red Room, please! The biggest challenge for
us is that they discount the bestsellers 40-50%. We may someday be able to
do that, but books cost retailers between 45%-65% of their list price
through most distributors or publishers, depending on your volume, so we
may get close but not all the way.

There was an op-ed in The New York Times recently that was essentially saying, “What Price Amazon?” A Pulitzer-Prize winning author, whose name I forget, argued that while their prices may be lower, it hurts local communities, destroys our local tax base and infrastructure, and our culture as a nation.

I don’t know how many consumers, out of the $8 billion in Amazon book
sales, will be willing to switch, even if they’re encouraged to do so by
the authors. If Walter Isaacson’s book on Steve Jobs had been on Red Room
in the first two weeks it was out, and Isaacson had, when promoting his
book, directed readers to Red Room, Isaacson could have made up to an
additional $3 million more than he did. Not to mention that he would have
gathered the names of 500,000 of his customers to sell his next and his
backlist books to. Anyway, let’s say he only got a measly 10% of his book
sales to move to Red Room from Amazon. That’s still $300,000 and 50,000

The authors are already their own sales force, Red Room is a mechanism that
allows them to get more out of closing the sale, wherever and whenever
they’re marketing themselves.

MW: How many authors use Red Room? How many authors sell their books through the Red Room Bookstore?

IM: Three thousand authors use Red Room. About 500 of them haven’t filled out their profile enough for us to sell their books yet, but the other 2,500 sell their books through the Red Room Bookstore. And when we launch selling “all” books, not just our official Red Room author titles, the other 500 authors’ books will show up, plus we’ll have about eight million additional
titles. I’ll let you know when that launches.

MW: How can Red Room authors reach more potential readers through Red Room?

IM: We have numerous testimonials from authors saying they get far more readers of the same blog posts on Red Room than they do on their other platforms. Some authors have reported between 15,000 and 500,000 readers. We provide analytics, so you can see your traffic on Red Room. Blogging regularly (something I don’t like doing, and I understand why others don’t like to do) is, as everyone knows, a good way to get new readers. You’ll be showcased
on our blogs page, and we can feature you—if you wrote something fantastic—on our homepage or in our newsletter. Another great way to promote yourself is to comment on the blogs of other authors you authentically like. Don’t sell, just add to the conversation. Readers will see you there and look you up.

I gave an hour keynote talk on how to market your book through social media
at the Stanford Writers Conference a while back, so I have a whole
methodology I suggest to help people spend a limited amount of time online
but make the most marketing impact. If you’re on Red Room, call me and I’ll
give you a short coaching session tailored to your situation. Seriously,
I’m happy to do it. I don’t like authors out there feeling overwhelmed or
intimidated or guilty about what they “should” be doing on the Internet. I
like to see authors getting their next book written, blogging and
participating strategically in a limited way that doesn’t waste their time, and gathering over time a lengthy email list of real book buyers. We get notes all the time from authors saying what a support we were and how much we helped them succeed. That’s what we’re here for.

MW: For authors who already have a website and a blog, what advantage is there to blogging on Red Room? Do I have to have a Premium Membership to blog on Red Room?

IM: You can have a beautiful Red Room home, and you can blog on Red Room for free. It’s called a “Community Membership.” (As I mentioned earlier, you only have to get a Premium Membership if you want us to showcase and carry your books.) Blogging on Red Room is the most pleasant blogging experience you’ll find on the Internet because of the quality of the people on Red Room—no weird comments, no spam comments. And you’ll be in really good company, as you know, from seeing who’s already on Red Room. Plus, it’s an elegant site. We just rebuilt and redesigned the site from the ground up, and it looks great. And we always provide email and phone support from our editors in San Francisco or Los Angeles.

Red Room isn’t exclusive. You can still post elsewhere and sell books
elsewhere. But we’ll become your favorite. Most of our authors are on
Facebook, Linkedin, Twitter, and Red Room. A significant number also have
a personal website and a blog elsewhere. We know it’s time-consuming to
maintain all of these sites, so we keep up with technology and improve the
design, so Red Room can be your only home if you want it to be, but we also
don’t mind you linking to and showcasing your activity on other
sites. Because you’ll start linking where to buy your book from all of
those other sites back to Red Room, so you can find out who’s really buying and so you can earn your Red Room Royalties of 15% of those sales. We amplify the
success you have on all the other sites. We play nice with everybody.

Except Amazon. Which is kind of ironic, because I think I would get along
really well with actual amazons.

* * *
Thank you, Ivory, for a great interview! Readers, what do you think about Red Room’s new online retail model? Do you use Red Room? Will you buys books through Red Room? If you are a published author, will you link to Red Room on your website?

25 comments to Interview with Red Room founder and CEO Ivory Madison

  • Great interview, Meghan! By pure coincidence, I signed up for Red Room's premium membership just last week and am very pleased with the program. Ivory and the team have been very helpful in personally accommodating me as a new author. I was already planning on alerting my literary network about Red Room, and now I'll also include this interview.

    • meghancward

      Tom, so glad you are happy with Red Room! I need to set up my own profile, etc. I just joined last week. And thanks for linking to the interview!

  • This was a really interesting interview. I love books, the feel, the way they look on the shelf, even the smell of an old bookstore makes me happy. I can't think of anything I cherish more than my books. Of course, I don't read paper books anymore. I still buy them, but for the most part, everything I read is on Kindle and I use my ipad.

    As an new author, I don't even check my "Print" sales, because they don't interest me at all. It is probably because I don't have that many, with Kindle and Nook sales outselling the print by 8 to 1 and I also don't see any way for my print sales to ever be at a volume that would benefit me. The Kindle sales though, there is always the hope that the right tweet will land in someone's stream, they will read my book and then RT it to their followers and it will take off. This scenario is most likely with Kindle or Nook versions, in my opinion.

    I once saw a tweet from a friend, who asked for a suggestion on what to read. I asked her if she liked mysteries and she said she did. I said, "I've written a detective story that takes place in 1955 NYC, would you like a link?" She said she would and that she LOVED detective novels. Three minutes later, my book, Henry Wood Detective Agency, which I wrote in Martelle, Ia, population 280, was now being read by a woman in Antigua. That is the power of ebooks.

    I only mention my current perspective, because it might help. I hope that I'm in the minority and that books continue to thrive, but my mother and father, who are in their 70's and read more than I do, would likely give up their children before their Kindles. My mom's book club, in which, she is the youngest member, are all getting Kindles.

    I'm going to leave my comment and go check out your site. I'll join, for free, and seriously consider the $250.00 option. You won me over in the interview and though I may be skeptical about the future of Non-Kindle books, I will do my best to help prove I'm wrong. Good Luck.

    • meghancward

      Brian, I love your anecdote about the woman in Antigua reading your book. So true (about ebooks), and I find that when someone gives me a print book to read, it takes me far far longer to get through because I prefer reading on my iPad so much. Curious to hear how you end up liking Red Room.

  • I had to come back and mention how much I love the design of Red Room. It is a beautiful site.

  • It appears that when you said, "—no weird comments, no spam comments." you meant no comments at all? Is this correct?

    I write a blog post daily for my own blog and around 20 or so guest posts per year. Without the ability to read people's feedback, respond, and thus, connect with them, the value of blogging is greatly diminished. I find it hard to imagine a "community feel" without the blogging aspect being included. I read two pieces, which were interesting, but when I couldn't tell the writer how much I appreciated her work, it turned me off.

    Is there any plans to allow comments in the future?

  • Kristan

    Just gotta get this off my chest: Despite everything we read online, I'm not convinced Amazon is the enemy. Are they doing everything the way I would like? No. But are they destroying books and writers and publishing? No. And I'll be very surprised if they do.

    As for the interview: Thanks for letting us know more about Red Room and its ventures. Sounds like you're trying a lot of things. I went on the site years ago, to read some blog posts by Amy Tan, but I haven't been back in a while. I'll have to check it out again.

    • I would like to applaud your stance. I agree. I like Amazon, they have given me an opportunity that I would have not otherwise found. Were it not for the possibility of having a Kindle book, I would not have given writing a try. Now, I've completed 3 novels and am on the cusp finishing the 4th. They have motivated me to discover a side I didn't know existed and I'm quite sure it is my favorite side, now.

      • meghancward

        Kristan and Brian,

        I'm glad you don't think Amazon is all-evil. I was feeling really guilty after signing up for a free Prime membership through Amazon Moms and buying most of my Christmas presents through Amazon. It was incredibly convenient to click "Buy" and have them sent priority two-day shipping anywhere I wanted (myself, my sister, my father). Ivory is right that the convenience of ordering with one click is a huge factor, but for me, price is a factor, too. I LOVE the option to be able to donate part of the profits to my local independent bookstore. I buy books from Pegasus now and then just to keep them open, but I purchase most of my books through the Kindle store to read on my iPad. I wonder if Red Room will open an e-book store at some point. Books that can be read on Android devices? Is that possible?

  • sierragodfrey

    This was a great interview, Meghan. Nice job.

    I have had a Red Room account for several years…but also haven't updated it in two. I had already invested in my blog on Blogger and was building community there. I couldn't see the point of double-posting and didn't have the bandwidth to post to two blogs (mine and Red Room). But, I was always impressed with the community feel of Red Room and thought there was tremendous potential with it. As an unpublished writer, I just didn't see the purpose or benefit of such a community.

    I'm interested in Brian Meeks' comment above. Does RedRoom offer ebooks? Because while I am not in love with the Amazon's values (and I think Ms. Madison outlines those very elegantly), I do like my ebooks fast and quick. And I too love books so much, but the reality is that I read ebooks now almost elusively.

    Selling ebooks today and having them download to any particular device is going to be the challenge of online booksellers.

    • I am the epitome of struggling author, but today, after a post on G+ about Henry Wood Detective Agency, had 4 sales. In November, I had 3. So for December it brings the total to 11, which is by no means threatening the lively hood of the Nora Roberts of the world, but it means some people are reading my books. And that is satisfying.

      The Kindle advantage, from my point of view, is that not only did I meet the 3 of the people who bought my books, via G+, but one of them expressed his joy over how the book began. If all three had bought print versions, I'd have made almost the same amount, but none of them would be reading it already. I think the positive comments from the first purchaser led to two more.

      We live in an age of instant news. Marketing, customer service, and building brand loyalty needs to be just as speedy. But, of course, these are just the observations of an very tiny fish in a rather large ocean of options, so I may be wrong. 🙂

    • meghancward

      Sierra – I just echoed your comment in response to Kristan and Brian's comments above – will Red Room sell e-books someday? And why WOULDN'T there be value in double posting your blog posts both to your own blog and to a Red Room blog? With the same amount of work, you could read more people – couldn't you?

      • sierragodfrey

        I don't know how it's the same amount of work to double-post—-if anything, it's twice as much work because then you have to go log into Red Room and post. And why? Who's it reaching exactly? I never figured that out.

  • […] Red Room founder and CEO Ivory Madison – “Some of you may be familiar with Red Room, a social network and marketing platform for […]

  • Thanks so much for this. Like Sierra, I joined Red Room several years ago but let it go in favor of the other 4 or 5 or 6 must-join networks. Now I guess I'd better get back to Red Room. I do worry about putting most of my eggs in one Amazon basket. Good to have alternatives.

  • This was just the kickstart interview I needed to bling out my profile on Red Room, Megan. I just joined this past week after checking it out a couple months ago. This thorough Q & A solidified the importance of Red Room to my networks' list.

    • meghancward

      M.E. I joined last week, too! I'm anxious to learn more about the benefits of Red Room. I'll look for you over there 🙂

  • […] Interview with Red Room founder and CEO Ivory Madison […]

  • meghancward

    By the way, I talked to Ivory, and she said that Red Room does allow comments for anyone registered on Red Room and that they do plan to sell e-books soon (Yay!). As far as blogging on Red Room, you can really increase your readership by blogging there, and they have a new feature that allows you to post to Red Room and have it automatically cross-post on sites like WordPress, Blogger, and Typepad. Plus your Facebook and Twitter feeds are displayed right on your Red Room page. Last but not least, shoppers who buy books on Red Room can now enter the name of their favorite independent bookstore to have 5% of the sale forwarded to them! (Yayayay!)

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