By Tom Ballard, Chief Alliance Officer, Pershing Yoakley & Associates, P.C.
Paul Cowell’s entrepreneurial journey began with his efforts to found and grow an independent church in Knoxville, yet he is probably better known for two of the enterprises that he led – Book Warehouse and Shop at Home.
As noted in the first article in this series, Cowell supported his family as a businessman, not from his income as a pastor. He left his pastoral duties at Christ Chapel Church in 1983, although he is still very involved in ministerial endeavors more than three decades later.
During an extended interview in his office at his home on the shores of Watts Bar Lake near the Whitestone Country Inn, Cowell described his entrepreneurial career, almost always tied to retail activities, and an opportunity he was offered to trade some Bibles for two truckloads of remainder and returned books.
For those like me who were not familiar with the term, Wikipedia defines books that fall into this category as those “that are no longer selling well and whose remaining unsold copies are being liquidated by the publisher at greatly reduced prices.”
Cowell explained that bookstores in those days bought books on 90-day terms. If they were not sold by the time the paperback versions were issued, the hardback books could be returned. Thirty percent of the books that were printed never shipped, hence the term “remainder,” while those that were sent back by the bookstores were categorized as “returned.”
The decision to take a chance – a trait of any successful entrepreneur – launched Cowell on a six-year journey where he built a 99-store chain named Book Warehouse. The initial order was 42,000 pounds of books for $13,500.
“Random House was the big one I started with,” Cowell said. “It opened doors to many other publishers.”
As he grew Book Warehouse, the pastor turned entrepreneur leased old grocery stores and held 26-day sales. The books were priced at a 70 percent discount from the original retail amount for two weeks, then 80 percent for a few more days, and finally 90 percent off near the end.
“A book nobody would buy for $20 would sell at $2,” Cowell explained.
Book Warehouse was doing well.
“I was up to my eyeballs in the book business,” Cowell said of the late 1980s. “We were opening 15 bookstores a year.”
Yet, at the very time that his remainder and returned book business was taking off in a big way, Cowell was pulled into an effort by one of his former employees who had helped found the Shop at Home network.
“They had raised $2.5 million in nickel and dime stocks, but lost it all,” he said of the company that was based initially in a fairly unlikely community – Newport. Established as a rival to the Florida-based Home Shopping Network, Shop at Home targeted the then fledging market of residences with satellite downlinks.
Cowell got involved in an innocent enough way – helping a friend who wanted to acquire the network but, as the old adage goes, “the best laid plans of mice and men often go awry.”
NEXT: Plans to help a friend turn into something much more challenging.