SMU’s designated Barnes and Noble bookstore would appear to be the ideal location for students to purchase textbooks. The store is designed to specifically cater to any college student’s necessities, however, its costly textbooks have compelled students to seek other options.
Barnes and Noble’s 2012 fiscal year report underlines college students’ desire to become resourceful. Barnes and Noble reported that its net earnings decreased 6.8 percent from fiscal year 2011 to fiscal year 2012. Also, the college bookstore segment of the company, Barnes and Noble College, recently released its third-quarter results on Thursday, Feb. 28, which showed revenues of $517 million or a 1.6 percent decrease as compared to a year ago. Terry Anderson, an SMU senior finance major, is one example of Barnes and Noble College’s decline. Anderson bought textbooks from the SMU bookstore as a freshman, but starting in August of 2010, he has ordered all of his books online from Amazon.
“I haven’t bought nor rented from the SMU bookstore since my freshman year because I’m aware of cheaper alternatives,” Anderson said.
Anderson saw nearly a 50 percent savings when he began using Amazon’s student textbook program.
John McKinley, a sales representative for the SMU Barnes and Noble bookstore, did not comment on the store’s revenue loss to websites such as Amazon, but he did stress the store’s strong increase in textbook rentals. Instead of buying textbooks for their full value, students have the option of renting textbooks for a semester at a lower cost. In comparison to 2011, the store sold an additional 2000 textbook rentals. There was also a minimal increase in eTextbooks as well. Sales increased 50 percent for these digital texts, but only 100 more eBooks were sold.
“I believe students still want to physically hold a textbook. eBooks appeal to some students, but rentals are much more common,” McKinley said.
Morgan Beckwith, an SMU senior dance and art history double major, is a proponent of textbook rentals. Beckwith uses a combination of Chegg, the online textbook rental website that launched in 2003, Amazon and the SMU bookstore. Beckwith, however, argues that Chegg is her favorite resource.
Beckwith said, “I think the easiest option for students is to rent used textbooks because they are lower in cost and easy to return at the end of each semester. I used to try to sell my books back to the SMU bookstore at the end of every semester. I was always disappointed at the very low amount of money I received for selling them back.”
Barnes and Noble began textbook rentals during its 2011 fiscal year, but by then Chegg had already gained credibility in the renting field. The company, which was founded in 2007 by two Iowa State University students, provides book rentals that are up to 80 percent lower than cover prices.
Brian Belardi, director of media relations for McGraw-Hill Education, commented on McGraw-Hill’s business relationship with Chegg.
“McGraw-hill is a trusted band with trusted content. Our heritage in learning has helped our textbooks sales grow at a healthy rate,” Belardi said. “McGraw-Hill has witnessed increased demands in direct sales to students and to distributors such as Chegg.”
Although the convenience of renting from websites such as Chegg, eBay, Amazon and even the SMU bookstore may satisfy many student customers, other SMU students [have desired greater proceeds].
“With renting, you just don’t get a substantial return from selling back the book,” Anderson said.
According to Barnes and Noble’s 2012 annual report, students typically receive 50 percent of the price they originally paid for the book if it has been adopted for a future class. This is part of the company’s “cash for books” program.
SMU student Anderson argued that he has had different experiences.
“The SMU bookstore never gave me a fair return on my books,” Anderson said. “I now use Amazon to sell back books, or Textbook Valet.”
As any good businessman would do, one SMU student saw the SMU bookstore’s pitfalls as an opportunity. John Dean, an SMU senior finance major, established a startup titled Textbook Valet in the summer of 2012. Like Anderson and Beckwith, Dean was frustrated with the bookstore’s expensive prices. Dean also found ordering books online confusing. Dean’s business model involves buying, selling and delivering books to fellow SMU colleagues.
“I came up with Textbook Valet as a solution for students who wish to save money as well have a very convenient way to order their books from one place, and know they are getting the correct books. The personal delivery service also really differentiates me from everyone else,” Dean said.
When Anderson last sold books to Textbook Valet, he received $300.
“I would highly recommend Textbook Valet. Shipping books via Amazon can be inconvenient but Textbook Valet will come to you,” Anderson said.
Textbook Valet sells books 15 percent cheaper than the SMU bookstore price and will buy back any book for cash.
“Currently, I only serve undergraduates. I was expecting my typical clients to be freshmen… but upper classmen have really enjoyed the convenience of the service I offer. I think it’s because they know from experience how frustrating the book buying experience can be and the complimentary delivery service I offer is the cherry on top,” Dean said.
Online textbook sites and startups such as Textbook Valet are direct reasons why Barnes and Noble’s revenue is declining.
“I am just trying to be resourceful in college,” Anderson said.
