When it comes to university textbooks, it’s no secret that profits come before any consideration of what’s best for students. Prices have risen 1,041 percent since 1977, increasing by over three times the rate of inflation. The media shines the spotlight on this issue year after year, but nothing ever changes. The cost of new textbooks remains to be an increasing problem. But the other side of this problem is the lack of viable alternatives for buying and selling used textbooks. So while surging textbook prices is discussed at length, the solution to the problem doesn’t get spoken about enough. Without the right platform for buying and selling textbooks, the odds will continue to be stacked against students. If we are going to find the ideal platform that is to the benefit of students, we need to first take a critical look at what’s currently out there.
The business model for textbook rentals is based on the idea that if a single textbook can be rented to enough students, the revenue from renting that book would outweigh the cost of purchasing it. Considering the success of textbook rental companies today, the formula clearly works. But we have to ask whether students are really coming out on top in this deal.
“When you rent a textbook, there is no chance of recuperating that investment. Instead of being a deal for students, it is a risk-averse way for students to limit their loses.”
When you look at the unit economics of a typical book rental, rental fees range anywhere from 30 to 60% of the textbooks’ purchase price when new. Although this is a better deal than buying the textbook new from the bookstore, these companies are still making huge profits on the backs of students. The idea that textbook rental is the cheapest way for students to get their hands on used textbooks is completely false. When you rent a textbook, there is no chance of recuperating that investment. Instead of being a deal for students, it is a risk-averse way for students to limit their loses. To that point, it is the hassle and potential risk of not selling your textbook that makes rentals appealing. If students were confident that they could resell their textbooks when they were finished with them, the likelihood of breaking even – if not making money – on that investment would be fairly high. Rental companies have capitalized on this concern and as a result, reap in the profits.
Textbook resellers have for a long time been considered the alternative to bookstores. Sure they offer students deals on purchasing used textbooks, but for every student that wins, there is always another that loses. Resellers operate by buying books from students for well below market value, only to resell them to students for above market value prices. That margin allows them to cover things like shipping (spoiler alert: free shipping isn’t really free, those costs are usually factored into the purchase and buy-back price) and inventory costs. Sure it feels nice to save, but promoting a system where one side wins only contributes to the problem. What happens when the semester comes to an end and now it is your turn to sell the book? Chances are you will find yourself on the losing end.
It’s no secret that many students disagree with companies making big profits on their behalf. Online marketplaces have blossomed into micro-communities of students adamant on connecting with their peers locally and pocketing the full profits from their transactions. These online marketplaces provide a win-win solution, allowing buyers to purchase books for cheap, while allowing sellers to get paid fair value for their textbook.
“The result of this is that millions of textbooks go unsold across the country, and for every textbook that goes unsold, someone is left on the other end overpaying for another copy.”
The problem with online marketplaces like this is that they require a significant community size to thrive. In order to maintain this community, the user experience must be impeccable. If there is any unbalance in either of these two criteria, the marketplace simply won’t work to its true potential. A typical university has on average 30k students and a Facebook newsfeed where students post textbook sales listings in a one- to two-week period is just not sufficient or user-friendly. The process is tedious and for many, simply not worth it. The result of this is that millions of textbooks go unsold across the country, and for every textbook that goes unsold, someone is left on the other end overpaying for another copy. Although Facebook has become the platform of choice for trading textbooks at many universities, it is by no means the best we can do.
There is no doubt that marketplaces are a better option than textbook rentals and resellers; we already know they are. We just need one that works.