DAUPHIN COUNTY
Just as you can't judge a book by its cover, you can't judge The Midtown Scholar Bookstore entirely by its cozy interior or enticing external mural.
The Midtown Scholar isn't merely a shop selling used books. In six years, its owners said they've created the largest seller of used academic books between New York and Chicago. The store's presence is far greater on the Internet than at its location on North Third Street in midtown Harrisburg. In cyberspace, Midtown Scholar has more than 1 million books available 24 hours a day.
How co-owners Eric Papenfuse and his wife, Catherine, built a successful business and plan to sustain it is a story that can be told in five "chapters."
Chapter I:
An idea takes shape
After graduating from Yale University, where they met, Papenfuse and his wife moved to Harrisburg in 1999, where Catherine had secured a teaching job at Messiah College. Eric found temporary work teaching Latin at Central Dauphin High School.
Having little need for the 100 to 150 books they'd purchased on the Internet for their college studies, Eric decided to try selling them the same way. He'd become interested in the potential of the Internet at Yale; his undergraduate class was the first to have e-mail.
Several of the books Eric offered sold quickly. He got to thinking there might be money to be made selling books on the Web. He was aware of a declining sellers' market for books, but he suspected that students and professors would always want their own books, rather than rely on library loans or downloaded material.
By January 2001, Eric was selling his stock of books from his home in Harrisburg's Shipoke neighborhood through Amazon .com.
Chapter II: The early years
While Papenfuse became convinced there was a market for academic books, he was concerned about where he'd get enough books to sell.
Eric and Catherine had always loved books. From the time they were dating until their children arrived, they scoured bookstores on weekends. Yet the growth of bookstore chains such as Borders, the advent of online retailers like Amazon and rent increases were forcing many traditional bookstores out of business.
Papenfuse realized he could buy from these failing bookstores, as well as from library sales and auctions of overstocked books being returned to their publishers by bookstore chains.
University presses proved to be important, too. They print relatively small quantities of books, typically fewer than 2,000 copies per title. But some of their books, particularly art books, may increase significantly in value over time. So Papenfuse worked to establish relationships with university presses, thereby guaranteeing a steady source of books that would be of interest to his customers.
While bookstore chains can return to their publishers books that don't sell, Papenfuse must purchase all the books he stocks. "We never get rid of anything. We own them as a long-term investment, " he said.
Chapter III:
Growth of a business
Storage was becoming a problem. The Papenfuses quickly outgrew the space in their three-story home, and in 2001, started renting modular storage units in and around Harrisburg.
In 2002, they purchased and renovated the old Midtown Post Office building at 1519 N. Third St. to house the Midtown Scholar and consolidate storage. The bookstore s inventory reflects interests of the local community, such as art, photography and books on urban affairs and African-American studies. The building was ideal, the Papenfuses felt at the time, in part because it had a loading dock at the rear. But its ground-floor storage space soon started to bulge.
So Eric purchased and renovated a 6,000-square-foot building in Allison Hill to house the growing inventory. But the space-devouring cycle continued, as truckloads of books kept arriving. Harrisburg's strategic location is part of the Midtown Scholar s story. Trucks returning empty from the New York area stop at publishers' warehouses along Interstate 81 and deliver loads of books at favorable rates.
About two years ago, the Papenfuses purchased a 50,000-squarefoot warehouse on North Sixth Street to serve as their warehouse and operations center. The Papenfuses mainly sell to out-of-town customers and claim to be the biggest international customer of the Harrisburg Post Office. Significant overseas destinations are France, Italy and Germany.
The business gets more than 3,000 e-mails a day, mostly orders. "The Internet never stops," Eric said.
The Papenfuses treat their employees well. They went into business intending to operate a familyfriendly firm. Even their new employees are paid above the minimum wage. Full-time employees, currently 10 to 12, receive healthcare benefits.
Catherine serves as chief financial officer and human-resources manager. She and Eric both draw salaries, but most of the money is poured back into the business buying books to expand their inventory.
They have received a lot of help and encouragement from community banks and accountants who devised an accounting system based on bulk shipments, not counts of incoming books.
The Papenfuses believe Harrisburg is a good location for meeting their goal of running a sustainable business that will support their employees and help put their kids through college. They think Harrisburg is a good place to raise children, and they plan to be long-term residents. They seek to give back to the community - they host folkmusic concerts at the Midtown Scholar and decorate the buildings second floor with exhibits from regional artists and photographers.
Chapter IV:
Anticipating the future
The Midtown Scholar is two blocks from the Broad Street Market and Midtown Cinema and Coffeehouse. It's also across from Harrisburg Area Community College s expanding midtown campus. When renovations are completed, the campus will put 2,000 students near the store's front door every day.
Eric is eager to sell to China and Japan. There are financial and cultural barriers to overcome, but he expects that scholars in those countries will be quite interested in his treasure trove of books.
Chapter V: Lessons learned
Perhaps the main lesson from the success of the Midtown Scholar is that the quality and productivity of a business is determined by the care, planning and vision of its owners. The Papenfuses have a talented and dedicated staff because they hire able people and treat them well.
The second lesson is that to understand a business, one has to appreciate it from a systems perspective. The Papenfuses have relationships with their suppliers, service providers and the community that serve their business purposes in ways that are true to their values. Knowing how everyone contributes to the success of a business helps ensure that changing any part of the business won't have unintended effects on its other components.
[Sidebar]
Eric Papenfuse and his wife, Catherine, co-owners of The Midtown Scholar Bookstore, stand in one of the three warehouses at their operations facility on Sixth Street in Harrisburg. They sell books online and in their store at 1519 N. Third St. in midtown Harrisburg.
[Sidebar]
Rebecca Roberts Beels packages international orders in The Midtown Scholar Bookstore's warehouse in Harrisburg. The business sells used academic books via the Internet and claims to be the biggest international shipper of the Harrisburg Post Office.
[Author Affiliation]
BY DOUG BEDELL AND PHIL LANDESBERG
Contributing Writers
[Author Affiliation]
Doug Bedell and Phil Landesberg, Central Pennsylvania-based communication and business consultants, write about ways to invigorate corporate and nonprofit organizations. Send ideas or suggestions for future columns to engagingways@ journalpub.com. Contact the writers directly at dougb@paonline.com or phil_landesberg@comcast.net.
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