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Archive for Sunday, August 30, 1998

ONLINE TEXT SALES CLICK

August 30, 1998

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Online stores selling popular book titles -- like amazon.com or barnesandnoble.com -- have been around for awhile. But selling textbooks in cyberspace is a new phenomenon.

Just a week ago, tens of thousands of Kansas University students went shopping for the bags full of books that'll be their constant companions for the next few months.

And they spent more than $8 million doing it.

But Lawrence booksellers who have long had the corner on that guaranteed business are starting to face competition from online stores targeting the lucrative textbook market.

``It was inevitable,'' said Bill Muggy, owner of Jayhawk Bookstore, a private textbook store near campus. ``And there will be more of them popping up online.''

Online stores selling popular book titles -- like amazon.com or barnesandnoble.com -- have been around for awhile. But selling textbooks in cyberspace is a new phenomenon.

A look at the numbers helps understand why the business is attracting attention.

The KU market alone is worth about $8.4 million each semester, if 24,000 undergraduate and graduate students are spending $350 apiece on books, as the university estimates. Multiply that by the number of universities across the nation, and the wave of interest starts making sense.

Now, there's VarsityBooks.com Inc., an online company that advertises two-day delivery on books for 15 percent to 40 percent off the cover price. The startup company is expanding its Web site (http://www.varsitybook.com) all the time, said Tim Levy, its president.

Although it currently carries book lists for schools in the Washington, D.C., area, students from all over the country can order books through the site, Levy said.

``We're not trying to put any bookstores out of business,'' he said. ``College bookstores offer other items. Right now we just sell textbooks.''

VarsityBooks.com is just the latest to take a stab at the business, said Bill Getz, textbooks manager for the KU Bookstores.

``We expect to see more of it,'' he said. ``But most of the ones we've seen try it so far have folded for lack of business.''

Try, try again

In the fast changing world of Internet marketing, that's been the norm. The first several tries at a new business tend to flop until a system is refined and someone comes up with a business model that works.

One problem with the textbook business is that online dealers haven't figured out how to accomplish the end-of-semester ritual of buying back books. That means they can't offer the books students want most -- used ones that sell for about 25 percent less than new ones. Another problem is that students are stuck with books if they drop a course.

But the biggest difficulty for a national dealer could be simply logistical: Getting the textbook lists for each university every semester and determining how many books to buy to ensure fast delivery without being stuck with excess inventory. One answer could be working out a drop-shipment scheme with publishers.

There also are Web sites geared to exchanging textbooks among students. A local one, the KU Book Exchange, allows students with a used book to post it on the site (http://www.ukans.edu/~kube) along with contact information. That way, somebody looking for the book can call or e-mail and strike a deal. Another, BookSwap.com, is a national service that does the same thing (www.bookswap.com).

Local impact

So far, Lawrence dealers said, online booksellers have had no impact on their businesses. But they realize that could change, and are hedging their bets.

Jayhawk Bookstore and the KU Bookstores both have set up their own Web sites.

``It's not propelled by competition,'' Getz said, ``but simply to get our operations on a par with the rest of the university.''

The site (http://www.jayhawks.com) allows students to pre-order textbooks, browse a few titles and purchase graduation regalia.

``We do a little bit more with selling general interest books on the Web than textbooks,'' Getz said.

Jayhawk Bookstore's Website also is set up for pre-ordering, but the main retailing focus is on gifts and clothing. Muggy plans to expand it to include more class supplies and academic software.

He said the site (http://www.jayhawkbookstore.com) is less a response to online textbook competition than to the fact business these days requires a web presence.

Another way local bookstores set themselves apart is by trying to make the book-buying process easier, so that fewer people have to wait in lines or push through crowds to find the stack of books they need.

At KU, students can pre-order their books and have them packaged to be picked up. That's an innovation started by Muggy's store several years ago that's now used around the nation.

In the long run, he said, it's too early to say how outfits like VarsityBooks.com will affect the business.

``It's going to boil down to how aggressive the advertising is and how reliable they can be,'' Muggy said. ``The Internet will just be an additional headache we have to deal with.''

More likely than a national site that stocks all the books for every class being offered everywhere are a few regional ones serving a few schools. Another more likely outcome, Muggy predicts, is a national bookseller like barnesandnoble.com stocking the top 50 books in an acadmic category and then advertising that they are in the textbook business.

``Amazon.com right now has a lot of bookstores feeling very edgy,'' he said, ``but I don't see them putting a lot of bookstores out of business.''

Besides, he said, there's always been a sort of underground market for books, with fraternity brothers and roommates swapping books, and that never hurt anybody's business.

In the long run, who knows?

``Anything could happen,'' Muggy said. ``I could see one of the stores right here on campus having inventory online that would let students shop around and the pick up books the next day.''

-- Richard Brack's phone message number is 832-7194. His e-mail address is rbrack@ljworld.com.

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