CDUniverse.com adds a new line of merchandise to its online inventory of more than 500,000 SKUs: audio books.

In plenty of time for the holiday season, CDUniverse.com, which ranks as No. 166 in the Internet Retailer Top 400 Guide to Retail Web Sites, is adding nearly 12,000 audio books to its online inventory of more than 5,000 SKUs.

The web retailer is rolling out certain selections such as “The Story of Classical Music.” The audio books will be available in categories that include fiction, box sets, mystery and detective, juvenile and about a dozen other segments.

While other music retailers are looking at expanding into new ventures such as downloadable music, CD Universe sees audio books as a category that fits well with its merchandising concentration on movies and CDs. “This move into audio books is a good natural extension for us,” says director of marketing John Salai.

CD Universe will market its new line of audio books in upcoming e-mail campaigns to its opt-in list of more than 1 million names. To test how receptive customers would be to buying audio books at CD Universe, the web retailer in June and July took orders for hard copies of the new Harry Potter novel – “Harry Potter and the Half-Blood Prince” – and then picked, packed and shipped each order. “It helped us gauge interest,” says Salai.

To spur more customer interest in audio books, CD Universe is asking customers to review audio books on the web site, post personals reviews and rate the book on a scale of 1 to 5 stars. With a site that attracts more than 4 million monthly visitors, CD Universe believes audio books are a new channel that will increase conversion rates and average tickets, which in 2004 ranged from about $40 to $46 per order.

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More merchandising diversification will also help CD Universe grow its sales, which are expected to increase between 20% and 30% in 2005, Salai says. In 2004, CD Universe had web sales of $30 million, which is up 33% from web sales of $22.5 million in 2003.

“Our customers come to the site looking for the latest CD, DVD or video game so for us it`s a natural extension to offer books on CD and tape,” Salai says. “Audio books fit right into our current model in terms of shipping, costs and promotions. From an integration perspective, the amount of work to get the product line up was minimal.”