Textbook Renter’s Spinoff May Help College Stores Lower Prices

February 28, 2012, 11:00 am

When it comes to renting or buying textbooks, students can pick from several different services to help them find the best deals. It’s often hard for university stores to compete with independent vendors, since wholesaler agreements can inflate stores’ used-book prices above their market value. It’s also tough for stores to track which titles students choose. So one textbook-rental company, BookRenter, is today introducing a spinoff company that it says will help university stores compete. The spinoff will do so by making it easier for stores to see how their textbooks are priced elsewhere.

The new company, called Rafter, was born two years ago and grew out of BookRenter’s university-store-services platform. Mehdi Maghsoodnia, BookRenter’s chief executive, said the spinoff came to life because institutions needed a better way to structure their selection of course materials and save students money. Whereas Chegg, one of BookRenter’s competitors, appeals primarily to students with its textbook offerings, homework help, and course reviews, Rafter’s set of tools highlights the company’s focus on working with a large group of university stores to bring prices down.

The company’s cloud-based service aggregates prices for new, used, and rented textbooks, giving university stores more negotiating power to find the best deals for their departments. Professors can use Rafter’s discovery tool to see what books their peers are using in courses at other institutions that use the system. And students can buy or rent their course materials through Rafter, choosing home delivery or in-store pickup at their campus bookstores.

Rafter seeks to help stores recoup revenue lost when students buy their books through third-party Web sites. With Rafter’s mobile search tool, students will be able to find their books and compare campus-store prices with those on popular sites like Amazon.com and Half.com, and they may find that the bookstore offers the best deal. Mr. Maghsoodnia called the new service a “complete package for course-material management.” The company says 500 institutions are already on board.

Rafter’s introduction comes after its parent landed $40-million in venture-capital investment last year, and Mr. Maghsoodnia said that money helped drive the new service’s development. The platform is free for universities, and the company says it will make money by taking a share of the revenue its partners bring in.

[Creative Commons licensed Flickr photo by Wesley Fryer]

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okiedokie1121

Sorry, but I don’t see how this would help college stores. Seems like just another competitor for college stores to me. Many people on campus don’t realize that most college bookstores are BIG contributors to student organizations and many other groups on campus. I hope students and faculty realize that by sending students elsewhere and calling crap like this a “help” to college stores, they are driving business off campus. If this continues, bookstores will NOT be able to contribute to campus the way the have in the past. Right now, on many campuses, the bookstore staff is expected to do all the work and research (many times for professors that just don’t want to do the research themselves) and then don’t think the bookstore should be the one making the sales to students. Who’s going to do all the work when bookstores are run out of business by online competitors that don’t have to charge sales tax and don’t have to pay someone to work with faculty and don’t have to contribute to campus, etc?
jsibelius

Well, the college bookstores aren’t out of business yet and Amazon’s been around quite awhile. And Barnes & Noble, and Half.com, and eBay, and Chegg and a whole bunch of others.

On the other hand, I ask why anyone wants to make a tool that would help them when those are the bookstores who continually engage in very anti-competitive behavior, such as banishing students who are doing price comparisons and making the ISBNs for textbooks impossible to copy and paste online.

As an undergrad, I routinely bought my textbooks from the off campus college bookstore because they provided book scholarships for some members of the band. But after realizing how the bookstores treat students, and how regular retailers could never get away with such tactics, I can’t find any reason to support them.
mwilson1382

I think Rafter could potentially be a helpful idea for two
reasons:

1) I do this sort of thing with an iPhone app. I will go into a store and scan a
product to see if I can find a cheaper price online or at a store near by. Rafter is offering that type of service
for not only students but bookstores can use the same information as well (they
may not be able to beat a price depending on any type of mark up that the
university would put on a textbook but this may help in those types of
decisions).

2) The “cloud based service” would be a great assets for
departments to be able to find quality textbooks at a reasonable price. If anything, the students would
appreciate the effort to look for qualifications in those two areas.
rwejd

Unmentioned in your comment is that 80% of college bookstores are owned by the largest used book vendors (Follett, B&N, Nebraska, Missouri/MBS), with Follett and B&N the largest. College administrators have made a “devil’s deal” with the corporate used bookstore parasites; they take 6-10% of profit for “services” on campus. It looks like the bookstores are doing the administrators and students a favor. Think again! College administrators – who as a group are the most non-innovative and overpaid players in higher ed – have gotten used to this “book payola” in exchange for signing on the dotted line with these large bookstore companies. the contracts they sign are usually for 3+ years; they give the bookstores ironclad control over content distribution on campus – to the point where Open textbook solutions and other online solutions that don’t pass through the bookstore are either frustrated, or held up altogether.

Who pays for the textbooks, whether rental, store-bought, or or otherwise? Largely, it’s TAXPAYERS, via Pell grants. Administrators won’t put pressure on faculties to adopt Open textbooks; they don’t want to rock the boat. When meetings and conferences around Open textbooks or high textbook prices occur, the bookstores are always at the table, because they “contribute” to the bottom line. Give me a break! Bookstores are mostly corporate owned profiteers who could care less about students welfare (this doesn’t include hard working bookstore personnel, who are just trying to make a living).

The corporate bookstores buy back student books for dimes on the dollar, and sell back at $.50+ on the dollar; they pay off administrators with chump change for “Services” to keep them quiet, and create a false PR patine. It’s like a Kafkaesque joke! Even the Student PIRGs are paid out of these “service” dollars, so even though we have well-run and well-meaning Textbook Affordability Campaigns, the SPIRGs are compelled to be “politically correct” about attacking this STRUCTURAL problem (lack of innovation; the abuse of ‘academic freedom in choosing textbooks, etc.) head on. Even the independent bookstores play this game to some degree. Why? Because college administrators and legislators are largely MIA when it comes to innovating and executing new models. There is an entire ecology of back-slapping and turf protecting that is a subtext to this problem. (in fairness: there are some relatively few exceptions)

What about the fact that most professors choose more expensive books, and can’t be bothered to use less costly materials. Academics play the “academic freedom” card when it comes to choosing materials. Why? How do they get away with that? Administrators don’t want to raise any dust, so they don’t come down on instructors/academics and insist that high quality, low cost content options are the only acceptable ones. Make it a point of job viability and tenure.

What we have is a price/cost labyrinth that students and taxpayers are stuck in, with a bunch of inside enterprises – i.e. colleges/corporate bookstores/college administrators/college instructors – having all the leverage.

Book rentals are a joke, because they do nothing to stem the steadily increasing cost of college textbooks and other materials. Watch your yearly rental prices go up. Look at the pricing trends; look at near long term pricing trends; run the numbers. Chegg is a joke; the publishers LOVE Chegg; they have invested in Chegg. Why not? It’s to their long term advantage.

I don’t blame the publishers for these prices; I blame the barely conscious post-secondary administrative class and college instructors who are just too lazy to do anything about it, with the latter being slowly depleted by adjuncts who are so underpaid and so busy that they have no time to deploy complex, hard to rate, and not-ready-for-prime-time Open content. It’s a money hole, with grant funds being pumped in by the Obama and other (state) administrations and foundations to – guess who? – college administrators and termed-out and in-office Legislators who continue to feed the structural inefficiencies that keep this problem from going away. In the meantime, one of the key proponents of high book prices – the corporate used book vendors and their bookstores – stay conveniently off the radar (even though the CHE and other education-based news outlets have been made aware of it – hmm)

Who loses? Students, and taxpayers. What’s new?

Last – we DON’T need college bookstores. Close every one of them down, tomorrow. Take “service kickbacks” back from Amazon and other online vendors. Put in in policy (this means you, policy makers and administrators) that college instructors MUST opt in to the lowest price *quality* material. This doesn’t necessarily mean Open content, which is still a long way from high quality. Start a university-funded used book enterprise like Chegg; partner with a large enterprise player. Then, watch the publishers respond with high quality, low priced books – absent the parasites like Follett, B&N, etc. Watch more compelling collaborations between the best Open content providers and private vendors. Right now, in spite of all the noise, the high textbook price problem still exists, with small moves being made that won’t – in the long term – amount to a hill of beans. This is tragic, indeed, for our present and future learning populations. We could, and should, be doing so much more!
snowyowl

Small is the new Big. Rafter is just more greed tied up in a different package. It’s Walmart and Costco with a new, happy face. It’s very deceptive, because it looks like it’s WOW, it’s going to be THE SOLUTION to all our financial problems. The problem is much deeper, and the problems with the high cost of higher education are every where you look. We’ve become accustomed to super size me colleges, get rich schemes, the American Dream, online degrees, and he/she who finds the cheapest gas wins. We’re out of touch with what’s really happening here on planet earth. What makes you happy, closing down a family-run college bookstore (there are some, but not on super size me campuses) or helping your local community be successful? Remember that old movie,
“You’ve Got Mail” with Tom Hanks and Meg Ryan? Yeah, FOX Books, F-O-X…like a Fox. I’ve got to stop now, before I fall out of my tree.
okiedokie1121

Right, don’t blame the publishers for making a killing by charging what they do, but blame bookstores who are mostly taking a very small margin on the books sold and just trying to get by at this point. Bookstores are the ones to blame. Your solution to make faculty use certain materials because they are the cheapest sounds like bull to me. Professors should be able to use whatever materials they want for classes. Don’t like it? Don’t take the class. Higher education is not a right–it’s a privilege. If you can’t afford the materials needed to get the materials you need, maybe you should go to work for awhile and save up some money like I did. I don’t remember this being such an issue 10 years ago when I was going to college. Yes, the books were expensive back then. Yes, you didn’t get as much back at buyback as you thought your books were worth. (You gotta love students who think they’re going to get back the full amount they paid for a book after using it the whole semester). The only difference is we just knew before we even began college that this was going to be part of the cost associated with attending and dealt with it. Nowadays, it’s always somebody else’s fault. Also, there is a law that bookstores now have to post all ISBN numbers for books as soon as students can register for courses. So, these numbers are out there for whoever wants to comparison shop. How do you think companies like Rafter even get these numbers? I get so sick of the bookstore always being the bad guy. We get less of a discount from publishers than they give to companies such as Amazon, we pay half of the new price for books that we buy back, and we collect and correct all the information turned in by professors. You know what we get in return? We get students who just use us as a library while they wait for their online copies to arrive. We get students coming in trying to return their crappy online copies to us. We’ve actually had students come in with cheap books that they got online and they have been peed on. Yes, that’s right. So, there are students who would rather go to a source where they know they are getting the correct material and they can see the shape the copies are in. How about when professors decide to change the materials at the last minute? Students who have gone online to buy their books are stuck. Those who bought them at the bookstore can return them with no problem. Many students don’t want to read their materials online per an e-book. Many need a book right in front of them. Should these students suffer because some are too cheap to buy a book? Ridiculous.
okiedokie1121

Really, you can’t write down a number then type it in again? Sounds like laziness is your problem; not the bookstore. Typically though, it’s someone else’s fault.
jsibelius

Really…I wrote a whole post about how I don’t think college bookstores need any help with their competition and that their online competitors, who behave in a more ethical fashion for the most part and don’t treat their customers like criminals – with real words and sentences and all that – and what you got out of it was one sentence from which you extrapolated that I’m lazy? Why are you here, again? The political pundits are missing you about now.
okiedokie1121

I said it sounds like you are lazy because you said in your post the bookstore was “making the ISBNs for textbooks impossible to copy and paste online”. If this is true, then you are lazy. Plain and simple. You were too lazy to copy down the ISBN then type it in again, so you blame the bookstore. I called you out on it and would do it again. Your post said nothing about how or why online competitors are better than bookstores. All you did is complain about the bookstore on your campus. Which, by the way, is just one of thousands of bookstores across the country and is not necessarily typical of the average bookstore. I have every right to be here and defend bookstores and I will continue to do so.
jsibelius

It’s a Barnes & Noble-managed bookstore, so yes, it’s pretty typical. But this is my knowledge of numerous bookstores, not just the one on my campus. And you didn’t defend your bookstores, you just insulted me on a snippet taken out of context. Surely you can do better. Like take note of the fact that I was talking very specifically about anti-competitive practices that are common among college bookstores and that the online retailers are the new model that college stores should be emulating.
rwejd

You’ve just shown by the demeanor of your post why college bookstores are no longer necessary. It appears that you have a lot of disdain for college students who are looking to save a dollar and escape from the previous monopoly enjoyed by college bookstores. Good for them! If your store wants to sell college-branded T-shirts, computers, and pencils, be my guest, but the day when corporate owned college bookstores (and that’s most of them) *dominate* the textbook distribution business is fast coming to an end. Thank goodness!

Also, if you looked at my post, above, you would have read that I defended the poorly paid, overworked people who *work* in the bookstores. You are probably one of them! My beef is with the large corporations like Follett, Barnes and Noble, MBS, and Nebraska that have been the main parasite in the textbook ecosystem. Those companies pay their employees beans while their senior executives make enormous sums. Follett is especially egregious in this respect; its a billion dollar, privately held company. I wonder what the ratio is between highest paid and lowest paid employees at Follet (or, B&N, for that matter) – that would be an interesting statistic to know. They suck new books out of the market, so that within 18-24 months there is virtually no income for that title coming from the publisher’s back list. IMPORTANT: note that the extreme increases in textbooks nicely correlates with the growth and sophistication of the used book sector.

Last, about professors choosing whatever book they wish, no matter the cost: this an egregious abuse of “academic freedom”, period. College administrators and policy makers won’t touch this problem with a ten foot pole, because everyone is concerned about political correctness – i.e. that they will be perceived as “against academic freedom” and singled out for professional assassination. There is a serious lack of courage in this regard, from Deans, right up to the executive and policy making suites – few people within the system have the cajones to call out the structural inefficiencies that college administrators, corporate bookstores, and college instructors have created.

Yes, the publishers overcharge for their textbooks, but they have a lot of help from the aforementioned groups (with some exceptional, individual exceptions). In too many cases it’s the pot calling the kettle, black. Then, what gets lost in all of this is the student’s welfare, and access to education. That’s just plain wrong.

See what’s happening to independent bookstores? College bookstores are next. I decry the former, but can’t wait for the latter to happen.