Business Opportunities Weblog

January 19, 2007 by Rich Whittle | 2 Comments

BusinessWeek:

The college textbook market has functioned as a near-perfect monopoly.

Consider: How often does someone have the authority to order consumers to purchase a product with a limited number of vendors? University professors have just that power, requiring students to purchase particular books for their courses. The often obscure titles must typically be purchased from the college bookstore, which obtains them through special order.

With limited competition, at best, prices for new textbooks can easily climb to $100, and have tripled since the mid 1980s.

Now a group of small Web sites is trying to provide students with a cheaper alternative for textbooks and other school supplies, such as computers.

The largest of the sites, Chegg.com, allows students to buy and sell used textbooks and other school-related goods and services for free.

It’s a huge market, generating $11 billion in revenue and $3 billion in profit a year, according to Rick Bollander, a Gabriel co-founder and a member of the Chegg board. “If we can take just 5% of that market, we’ll be very happy,” he says.

Chegg faces plenty of challenges, though. Online retailers such as Amazon.com and Half.com sell used textbooks, too. And as a free classified service, Chegg depends heavily upon advertising for revenue, which can be particularly tough for a small site.

Chegg also charges fees to certain non-students who live near campuses and want to sell goods to students. It sells new books and computers at a discount as well, by reaching agreements with wholesalers.

Photo by Pesky Library.

In Ecommerce, Internet, Niche, Operations, Sales, Teens | 2 Comments