Cheaper College Textbooks – Leasing Model Grows
August 16th, 2009Textbook innovator, Chegg.com, recently completed a new deal that will significantly enhance its ability to serve college students. In what appears to be a truly unique partnership, Chegg will work directly with McGraw-Hill Education to provide new print textbooks as part of its online textbook leasing service.
New Business Models
The partnership actually features two new business models simultaneously. First and foremost, Chegg had already initiated its new textbook model, one where students could lease a textbook instead of purchasing one directly.
Through the site, college students could rent hardcopy texts; by renting books instead of purchasing, students could save as much as 80% of the cost of a brand new text. Also, to make the leasing process as simple as possible, students could select the needed books online and have them delivered directly to their dorm room or apartment.
In addition to the leasing option, Chegg seeks to be a full service portal for students. Textbooks may also be purchased and students are informed immediately at the time of purchase what they can expect for a possible cash return should they decide they do not want to keep the text.
Leasing texts of course means greater reusablility and less waste over time. The green nature of the process is critical for Chegg as a business and to further reinforce its environmental message, one tree for every textbook rented.
The second aspect of the model that is unique relates to the new partnership with McGraw-Hill. Though Chegg currently offers over 2.4 million books to choose from, working directly with a major publisher means that many more titles could now be available to students.
As for McGraw-Hill, once upon a time it received payment only when a textbook was sold by a distributor or bookstore. Any reselling of that text benefited only the parties handling the second transaction.
So previously, Chegg would purchase a text and make a single one-time payment to a major textbook seller. Under the new partnership model, the revenue stream is channeled so as to provide McGraw-Hill a payment each time the book is leased.
Currently, textbooks can be rented five or more times before they are retired making the rental life longer than the traditional market for a published edition. Therefore, the new partnership could be of enormous benefit to the two companies.
Great News for Students
The semester textbook ritual is one of the most frustrating and financially challenging elements for students. With Chegg, instead of standing in long lines and subsequently maxing out your credit card, you can place an order online for shipment to your dorm room and do so at a fraction of the cost.
While the partnership with McGraw-Hill is only a pilot program (the first agreement features only 25 select titles), the announcement represents even more welcome news for students.
Every step taken to reduce the cost burden of earning a college diploma is a step in the right direction.
