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
world.

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
names.

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?