Takashi Sakamoto might be the most hated man in the Japanese publishing business. The founder and president of Japan's largest used-book store chain, Bookoff, is routinely accused of everything from unfair competition to cheating authors out of their royalties to corrupting Japan's youth. One newspaper recently suggested that his company was a threat to Japanese culture itself, while others charge that he is single-handedly destroying the nation's book industry.
In reality Sakamoto's only sin may be that he's smarter than his rivals. By exploiting a loophole in Japan's anachronistic, anticompetitive business rules, the 62-year-old former piano salesman has built Bookoff from a single store into a 700-outlet phenomenon in only 12 years. While nationwide book sales have declined 14% over the past six years, Bookoff's formula of selling secondhand best sellers at bargain rates has been a recession-era boon. In the past fiscal year, Bookoff increased sales 20% to $179 million, making it Japan's ninth largest bookseller. "There was a demand for inexpensive used books out there," says Sakamoto. "We just fill that demand."
But the saihan law says nothing about used books. So Sakamoto decided to restore those to mint condition and sell them cheap. Bookoff purchases books from customers typically for 10% of their cover price. Then employees clean the covers and sand the page edges (using machines Sakamoto designed) to give them a clean, unthumbed finish. The books hit the shelves at half the original price. Any book not sold after three months is slashed to 100 yen (about 85˘). Sellers of new books, along with publishers and wholesalers, are powerless to fight back. By law they can't cut their own prices to compete. "He completely got us," says Akiro Kikuchi, president of publishing company Chikuma Shobo. "You've got to hand it to him. He is one smart man."
Customers are impressed too. College student Kaoru Ikeda, 19, heads to her local Bookoff in Tokyo at least twice a week. "Here I can buy 10 manga comics for 1,000 yen [about $8.50]," she says. "In a regular bookstore they would cost me 4,000." Apart from the low prices, Bookoff is virtually indistinguishable from the regular bookstores in the area, and consumers don't seem to mind that its offerings aren't brand-new. "I just can't buy anything at a full-price store anymore, not when I know the same thing is here for less," Ikeda says.
That kind of customer loyalty has the competition crying foul. In 2000, Hironobu Hamada, a director of Kodansha—Japan's largest publisher—told his shareholders that used-book stores could lead to unfair trade practices. And Tetsuo Okawa, director of the Japan Booksellers Federation, claims that Sakamoto, by purchasing from the public, encourages teens to shoplift books from other retailers so that they can fence them at Bookoff. Sakamoto finds the criticisms a little baffling. "I think we can live peacefully together," he says, "but they keep finding new ways to attack."
He's counterattacking on new fronts. Capitalizing on an increasing acceptance of secondhand stores by Japanese consumers, Bookoff is now opening additional outlets offering used clothing, jewelry, toys, furniture and computer hardware. There is no saihan law for those goods, leading Sakamoto's doubters to predict that these ventures will fail. He disagrees, arguing that the company's pricing and distribution know-how and entrepreneurial spirit provide an advantage no competitor can quickly replicate.
What's after books and used merchandise? "Ramen shops," he answers. "In this country there's no big ramen chain. It's an industry that could be modernized. Soup is a food you could perfect and duplicate in standardized shops nationwide." Will the name be, um, Soupoff? No, no, he says. It will be something bigger and grander, to reflect his expanding vision. It will be called, he says, World Champion Ramen.