As students prepare for a new semester, silent competitions between textbook retailers intensify.
New book sales at the College Store declined 23.8 percent between 2012 and 2014, while rental profits rose 123.2 percent during the same two-year period. Sales of used books increased by 12 percent, which can be largely attributed to inflation.
Collegiate retailing is a $10 billion industry. But with the explosion of online textbook vendors in the past decade, the College Store faces increasing competition to entice students to shop on campus. Big online retailers include Amazon, which collected an annual revenue of $5.25 billion in book sales alone. Amazon and Chegg, an online textbook vendor, boast $1.1 billion in publicly issued shares, promise up to 90 percent off the list price of textbooks and offer free shipping on many orders. The runaway success of sites like Amazon and Chegg have even prompted brick-and-mortar store Barnes & Noble to start its own textbook rental business in 2010, promising an average of 42 percent off text- book list prices to compete in the market.
Roksana Gabidullina ’16 turned to Amazon for a price break on textbooks because she had already shopped with the online retailer before she started her Middlebury career.
“I do shop online for books, and the reason is purely financial,” she said. “Bookstore books tend to be really expensive, although sometimes, you do find books that are cheaper in the bookstore than online. If I choose to buy at the school, it is because the books are cheaper and instantly accessible. Renting is sometimes less expensive, so I do that in- stead.”
With online retailers advertising significantly lower prices for items available with the click of a mouse, declines in new book sales at the College Store have prompted new efforts to both lower prices and recycle profits back to the student body.
While some college bookstores are owned by chain giants like Barnes & Noble — which controls 636 collegiate book shops nationwide — the College has independent ownership over its bookstore. Books can therefore be obtained from a wider variety of publishers, and prices are lowered without permission from a higher corporate office.
All profits from the College Store are distributed to the College’s General Fund.
“The entire Middlebury budget is $300 million,” Vice President for Finance and Treasurer’s Office Patrick J. Norton said. “Any surpluses from any operating unit go to sup- port various Middlebury commitments.”
These commitments include recruiting and retaining faculty, funding students’ financial aid, and constructing, maintaining and renovating the College’s academic, residential, dining and athletic facilities.
As a small brick-and-mortar business, the College Store faces some costs that simply do not exist for online retailers.
“We [the College Store] have a higher cost of labor,” Store Manager Georgia Best said. “There are three full-time people and one to two part-time people devoted to the process of ordering, receiving and setting up textbooks and pulling and packing to return overstock. Our freight cost was over $40,000 this past fiscal year.”
The cost of this manual labor and shipping must be incorporated into the cost of the textbook.
The Store purchases textbooks from publishers at a discount of anywhere from 20 to 45 percent off suggested retail, which are then sold to students at the original suggested retail price, translating into an average profit margin of 23 to 24 percent for the store.
“If we make a change, it is to lower the price,” Best said. “On a national level net priced textbooks are sold at a 25 percent margin. Here at Middlebury any text that is $100 or more net cost has a 20 percent margin.”
Online retailers like Amazon can occa- sionally sell books below cost, or for less than the original purchase price. This benefits the buyer, but is not a sustainable strategy for a physical bookstore.
“There are reports that Amazon has never made a profit selling books,” Textbook Co- ordinator Dean Leary said. “Recently it was reported that Amazon as a whole makes only less than a penny in profit for every dollar of sales.”
At the College Store, items like clothing, miscellaneous merchandise and school supplies carry a higher profit margin of 35 to 50 percent to account for lower textbook profits.
The College Store promises for each student enough copies of the required reading— new or used. Since used books are a hot com- modity both in the bookstore and in the larger market, the competition among the colleges for these used books are stiff.
“If a title has just been published there aren’t many, if any, used on the market,” Best said. “We compete on a national level with other colleges and universities for used books, and the later the order from faculty, the less likely we’ll get used copies. We try to buy back as many as we can from students.”
In an attempt to entice students with competitive prices, the rental program allows the purchase of books for one semester at about 54 percent off the retail price.
“For rentals, we partner with a wholesaler that guarantees us a certain amount for each book at the end of the term, which allows us to offer it at a reduced price,” Best said.
A quick price comparison: this semester, a Biology 140: Ecology and Evolution textbook, Tangled Bank: Introduction to Evolu- tion, is being offered at a used rental price of $32.50 and a used purchase price of $60.00. The new purchase price of the book is $80.00 compared to the $42.50 charge for a new rental copy.
The availability of a book for rental depends on the wholesalers’ offerings.
Trying to sell the book back to the store is a game of supply and demand. The frequent publication of new editions makes many relatively new textbooks obsolete to the College Store or wholesalers if faculty members request the newest edition or the wholesalers are trying to move only the newest product.
If a book is being used in the next semester, students can recuperate about 50 percent of the purchase price through the buyback process at the store. If the book is not being used, the student may receive a less lucrative wholesale value for the book or try selling the book at another time.
In comparison, customers typically recuperate about a 60 percent return when selling back a textbook through Amazon, 65 percent with Barnes & Noble and up to 85 percent on Chegg.
eBooks are also available to students at 40 to 45 percent off of the suggested retail price, but the option is not as popular, with less than 20 eBooks sold at the College Book- store last semester.
A Spring 2014 study by OnCampus Research showed that only 10 percent of students prefer an electronic textbook, for reasons ranging from ease of use to the ability to sell a book back.
At the College Store, items can be returned by the Friday of the first week of classes with no questions asked for a full refund on a bookstore gift card. After the first Friday, textbooks are only returnable with proof of a dropped class.
Online retailers like Amazon and Barnes & Noble offer free shipping on orders from their warehouses over $35 and $25, respectively. Chegg charges a flat $3.99 fee per order when they aren’t offering free shipping promotions at the beginning of the semester.
Additionally, Barnes & Noble has a 14- day return policy, and Amazon and Chegg ac- cept returns within 30 days. Chegg pays for return shipping, but the customer is responsible for this fee at Barnes & Noble. Amazon will fund a return shipping fee only if the return was a result of the company’s error.
Shipping typically takes anywhere between three and 14 days from online retailers.
“Shopping online is not for ease because shipping often takes some time, and I’ve had experiences with going through the first weeks of classes without books,” Gabidullina said. “I’ve also only tried to sell one book back to Amazon, which was not easy. I only received a tiny fraction of the price I was selling it for, which is the reason I don’t sell online. I have a lot of books still on my desk at home.” Individual sellers on Amazon forfeit a 15% commission, a $1.35 fixed closing fee and 99 cent selling fee per item.
“Since Amazon charges an annual fee plus a percentage of each title sold to use their site for selling books, they are making money off a book they aren’t shipping,” Best said. “They are then allowed to take a smaller percentage off the publishers net price than we [the College Store] are.”
The College Store implements its own programs to recycle profits back to the stu- dent body and entice customers. An estimated 75 to 80 percent of the student body uses Panther Points, a program that allows students to redeem points earned by making purchases at the Store for gift cards, and in 2013, students redeemed 692,000 points.
In addition to the Panther Points Program, the College Store started a raffle four years ago to benefit student groups.
“We partner with a company that has a program called ‘One Planet Books,’” Best said. “For every box of books we send to them they give us $10. These are books that have no value either to used book wholesalers or online vendors. The books come from students who donate them and from the recycling center. The money that we earn from these books is donated to SGA groups that sign up for the drawing. Since we started we have donated almost $3,500 to different groups.”
In addition to textbooks, the College Store aims to be a one-stop shopping destination for students, offering supplies, clothing and a Mac Store selling Apple computers at educational discounts. In recent months, the store acquired a Boots makeup kiosk, and this semester they are introducing a scarf kiosk, rack of posters and an increased selection of dorm supplies to provide students more of an incentive to look to the College Store for a convenient and complete inventory of products.
Though the store cannot lower their textbook prices to be as competitive as online retailers like Amazon, Chegg and Barnes & Noble, loyalty programs and personalized services are just some of the ways the College Store is trying to compete.
Leary cites three reasons why he thinks students should shop at the College Store.
“Amazon does not offer true cost prices, so it’s easy for people to make decisions with less than best long-term outcomes, there are efficiency and environmental savings of mass shipping to one distribution point and the competition may not offer the same working conditions and compensation as the College,” he said.
In the future, competition from online retailers will likely only increase, forcing changes in sales techniques from all sides. It is hard to say which method for buying textbooks is the best, but retailers are fighting for students’ business, which, in the end, can only benefit the student by offering more options.
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