Business By the Book

By Hoover's Editors | In: Education The cost of higher education is constantly on the rise. To afford increasing tuition and fees, many students (and their parents) are paring down their budgets in other areas. Textbooks make up one line item that is feeling the pinch. Indeed, many students cut their costs by purchasing used textbooks, however, professors often request the latest editions for their classes because these texts offer the most up-to-date information on a particular subject. Students can also get their required reading done by renting textbooks and by using digital textbooks (also called e-textbooks, which can be downloaded and marked up on-screen). Hoover’s takes a look at what some of the top textbook retailers are doing to attract book-buying bucks. Barnes & Noble College Booksellers offers printed textbooks (new, used, and rentals) in the roughly 640 campus bookstores it operates throughout the US. The company also offers printed textbooks and e-textbooks through its online store. Still, digital offerings have become more central to B&N College Booksellers’ business. During 2010 the eTextbook store experienced a 3000% increase in sales. B&N College Booksellers attributes some of the rising demand to e-textbooks’ lower sticker price (up to 60% lower than printed textbooks) and added functionality from reader applications (including the firm’s own NOOK Study application). B&N College Booksellers offers more than 30,000 titles in its digital textbook library, and that figure is expected to grow in the years ahead. The company said industry projections indicate 60% of textbooks will be available in digital format by 2014, and it is positioned to continue enhancing its eTextbook store and reader technology to keep up with demand. Exceeding B&N College Booksellers’ reach is Follett Higher Education Group (FHEG, part of Follett Corporation), which operates more than 900 college bookstores in the US and Canada. It sells and rents printed textbooks and provides e-textbooks online; however, printed titles are the focus of Follett’s business. Follett touts its inventory of used textbooks is the largest in the nation. In a bid to broaden its wholesale business and boost book-rental capabilities, FHEG consolidated its wholesale preowned book and consumer-direct warehouses into one distribution and fulfillment center in mid-2011. The streamlining is intended to slash Follett’s backlog by 200%, enabling it to move more books that were purchased at the end of the fall term to bookstores for the start of the spring term. FHEG launched its textbook rental program in 2009, a year before B&N College Booksellers rolled out its rental service. Aiming for a share of Follett’s and B&N College Booksellers’ business, Nebraska Book Company (NBC) sells and rents printed textbooks and e-textbooks through more than 290 college bookstores in the US. The company jumped into textbook rentals during 2010, and by early 2011 it reported that the NBC Textbook Rental Partnership had experienced broad adoption among its stores and had seen increasing demand. For the spring 2011 semester/2010 winter quarter, NBC noted that 135 stores helped to rent more than 125,000 books (almost double the number of books from the previous fall semester). NBC paid more than $4 million in rental rebates to those stores during spring/winter period, about double the amount paid from the fall term. Despite the assuring figures, the company filed for Chapter 11 bankruptcy protection in June 2011, citing losses as customers shift their book buying online. Indeed, one of NBC’s (and other traditional bookstores’) biggest online adversaries is Amazon.com. The e-tailing giant doesn’t promote rentals; it sells new and used printed textbooks, usually at a fraction of what brick-and-mortar stores list them for. Amazon.com also has an online trade-in system for buying back students’ used books (at up to 70% the retail value). The company has been enticing more students to use its textbooks site by allowing them (those enrolled in at least one class and with a valid .edu e-mail address) to participate in the Amazon Student program free for one year. Amazon Student provides free two-day shipping and discounted one-day shipping for products on its site (not just textbooks), just like its $79-a-year Amazon Prime plan. Ecampus.com is a much smaller e-tailer with a more specialized selection. In addition to best-sellers, office supplies, and apparel and items emblazoned with Greek letters and school symbols, the company sells new and used textbooks through its eponymous website. It also runs a “Rent and Return” textbook rental program that allows students to choose their rental duration — 60 days, 90 days, and 130 days (semester-long) — with the option to extend their rental term for an additional fee. When the rental period is up, students can send their books back to the company with a UPS return shipping label (provided for free by Ecampus). Ecampus also offers about 4,000 e-textbooks through its partnership with content supplier CourseSmart. The two firms have been working together since 2008.