Selling textbooks is big money, low glamour pursuitBy
MEDILL NEWS SERVICE
WASHINGTON — More than two years ago, Thai Tran saw a fellow
Stanford University student standing on the steps of the main
bookstore and complaining about textbook prices.
Although that student, Danny Bramzon, dropped out of sight after
setting up a used book exchange on the bookstore's steps, his
message stayed with Tran, now a senior majoring in computer science.
Earlier this year, as Tran was working on his senior project —
building a Web site that automatically compared prices among the
various on-line auction sites — he came upon an intriguing idea.
Looking at the engine he had created, Tran realized he could use
it to compare textbook prices charged by the various on-line vendors
that have sprung up in the last year.
Thus Tran created Booksmart (http://booksmart.stanford.edu/),
a site that displays all of the textbooks needed for Stanford
students and automatically retrieves prices.
"It seems like everybody complains about the bookstore," said
Tran. "Compared to the bookstore, buying on-line is cheaper."
Tran's site tapped into an area that has quickly become one of
the hottest areas of growth for on-line booksellers. Providing
textbooks more cheaply has become the mantra of start-up Internet
companies that are challenging the once-dominant industry players
like university-run bookstores and private chains like Follett and
Barnes and Noble.
The market has tremendous potential: Students spend nearly $3
billion a year on required new textbooks alone, and nearly 100
percent of college students have access to the Internet. The
textbook sites, much like Amazon.com, claim they can offer
prices anywhere from 15 to 40 percent off the suggested retail
"For most consumers, it is their first purchase on-line, and it
is a really big one," said Matt Johnson, a founder and chief
executive officer of BigWords.com, a San
Francisco-based firm that went through its second major buying
period in January. "Our growth has been unbelievable."
Johnson, 23, and three friends founded BigWords in spring 1997
and began operations, offering both new and used books, in
"We started marketing it to eight schools in California, and we
were getting orders from 250 schools across the country in a week,"
One of BigWords' main competitors is VarsityBooks.com. Started by
two George Washington University law students and based in
Washington, D.C., VarsityBooks sells only new books.
"Bookstores are the last bastions of monopoly-like behavior,"
said Eric Kuhn, who founded VarsityBooks along with fellow GW
student Tim Levy. "They have been able to dictate price for years.
Our No. 1 one draw is our ability to offer price savings."
Kuhn and Johnson stressed the convenience of on-line textbook
shopping, which is open 24 hours, thus suiting college students'
notoriously late nights.
VarsityBooks and BigWords aren't the only Web sites selling
textbooks. General interest e-commerce sites such as Spree.com and
Buy.com also are selling books that used to be available to students
only at the local bookstore. In fact, Tran said, his comparisons
have shown those sites often offer the best deal.
Traditional textbook shops aren't about to surrender to their
on-line competitors, though.
"The brick-and-mortar store is still the most viable option for
students looking to buy textbooks," said Chuck Kratochvil, general
manager of the UC-Davis bookstore. "We are the ones that can provide
the most convenience like easy returns for students."
Kratochvil said that bookstores also are better places for
students sell their books at the end of a semester. BigWords allows
students to sell them on-line.
College bookstores are also about to get into the on-line market
in a big way, said officials with the National Association of
College Stores, a trade group that represents nearly 3,000 college
"On-line businesses aren't going away," said Jerry Buchs, a
spokesman for the organization. "We are going to give our members a
way to have an on-line presence."
That presence, expected to be announced next week, will be called
CourseWeb, Buchs said. It will allow college bookstores to set up a
page with detailed course information and give the students the
ability to reserve and buy books from the bookstore.
The group also will announce an alliance with
collegestudents.com, a Web site based in Austin, Texas, that caters
to the local needs of students.
Follett Corp. and Barnes and Noble College Bookstores Inc., the
two largest chains of retail booksellers, have slowly entered the
on-line market. Follett has gone on-line with efollett.com, which
acts much like CourseWeb and uses its 500 stores across the nation
Barnes and Noble College Bookstores, a unit of Barnes and Noble
Inc., announced two weeks ago that it had gone on-line at
Another potential player in the market is on-line used book swaps
such as Book Market (http://bookmarket.stanford.edu/).
These sites, usually run by student governments at the college,
allow students to post their own prices for their used textbooks.
One of the most important hurdles that faces all the players in
the textbook market is the ability to provide a complete breakdown
of books by class and instructor instead of just offering a
traditional search engine to search by book.
That improvement would allow students to buy all of their books
for one class in one spot. Tran's site, Booksmart, has that
capability and allows Stanford students to see the total price of
their order (including sales tax, shipping and other costs).
BigWords is working on a system that would allow instructors to post
their book lists on-line.
In the meantime, VarsityBooks.com took a big step in that area
two weeks ago, when it signed a marketing agreement with
International Thomson Publishing, a large educational publisher.
When ITP sales representatives talk to instructors about ordering
books for the next semester, they will recommend VarsityBooks as a
place where the instructors can direct their students.
That move has upset traditional book retailers, who say that ITP
is giving Varsity an unfair advantage.
"Students are the ultimate purchaser of our goods," said Robert
Christie, chief executive officer of ITP. "Varsity gives us access
to information, and we will recommend Varsity as way to sell books."
As for the future of textbook retailing, industry leaders and
students believe that the on-line retailers and traditional
retailers will achieve some sort of equilibrium.
"We see a huge opportunity for bookstores," said Christie, "but
the bookstore has to change its business model."
Tran agreed that on-campus bookstores always will have a
significant presence and that while price is very important to most
students, it isn't the only factor.
"A lot of Stanford students experiment with classes at the
beginning of the quarter trying to figure out what they are going to
take," he said. "So they may not have the time to order something
on-line and wait for it."
Future innovations, such as electronic books and course materials
that are placed entirely on-line, could threaten all textbook
retailers because they could render the textbook obsolete.
"Publishers will be able to customize material on the Web — just
pieces of it," said Christie. "The next evolution will be that
students go on the Web and buy an on-line course pack. The huge
advantage is that you don't have to buy the whole book — just a
one-time licensing fee."
Back at Stanford, Tran is ready to move his site off the campus
server and is thinking about opening his own portal business dealing
On-line retailers, like Amazon, give commissions to site owners
when a purchase is made from referral sites.
"A lot of people like the site, but I am unsure how successful it
will really be," Tran said.