Thousands of excited students headed off to college this fall and as any college student (and parent) knows, in addition to tuition there are many other associated costs of college. Entertainment expenses, parking permits, computers and new clothes all put a strain on the finances. Then, there is the nightmare that is finding and purchasing textbooks. You get your class schedule and hunt for your textbooks amid the chaos, stand in line for hours and nearly keel over when you get your total! There goes your hard earned beer money. College textbooks typically cost more than $100 a piece and students spend an average of $700 to $1,100 a year, representing one of the biggest expenses after tuition and room and board.
Let’s face it; textbook sales are a big racket, especially in higher education. Publishers market new textbooks to instructors and these textbooks get added to your list of required texts. If you’re lucky enough to find a used textbook to purchase, you run the risk of it being in horrible condition or being the wrong edition. At semester’s close you take your book to the bookstore in the hopes of selling it back and recouping some of your costs, only to find out that the book is not being used next semester. The frustration leaves you thinking, there has to be a better way?
Many students, including myself, are now enjoying the easy, greener and frequently less expensive method of renting textbooks through Chegg.com, an online textbook rental company. The company let’s you easily and quickly find and rent books, track them on-line and return them at the end of the semester. When Chegg first launched in 2007, founders Osman Rashid and Aayush Phumbhra had planned on creating a college-exclusive answer to Craigslist, but over time found a trend in their sales. “Over 90 percent of the volume was on textbooks,” says CEO Jim Safka, taking Chegg in a new, more specific direction. The online company now serves more than 6,000 campuses nation wide and helps to save students 65-85 percent on textbooks.
Not only is renting better on the budget, it is good for the environment. Based on student input, Chegg implemented the “Rent-A-Book, Plant-A-Tree” program as part of their ever-evolving model. Over 4 million trees are destroyed every year to manufacture a textbook and for Chegg’s founders it just seemed like the right thing to do. Through the American Forests’ Green ReLeaf program, the company has planted more than 850 acres of trees and students appreciate the environmental angle.
The growing competition from online used booksellers like Chegg means the college textbook publishing market has to change to keep up. Traditional publishers and college bookstores are edging towards rentals. Cengage Learning, one of the nation’s largest textbook publishers, announced in August that they would start renting books to students, at 40 to 70 percent of the sale price. Follett Higher Education Group, which manages more than 850 college bookstores, is also starting a pilot rental program this fall at a dozen stores, including those at California State University at Sacramento and State University at Buffalo.
As others scramble to follow the innovators, Chegg continues to evolve and stay fresh. The founders of Chegg believe their primary goal is to give students what they want and they are happy to listen and accommodate where they can. Safka remarks, “Any time you can solve a problem that’s emotional, you have a chance to build a brand that’s just loved.” This devotion is evident in the student volunteers that dress up in yellow chicken suits (Chegg’s mascot) on campus to promote Chegg to others. As other companies catch onto Chegg’s success and the inevitable market disruption, the founders are hoping that customer loyalty will carry them through.
You don’t have to take Econ 101 to realize Chegg’s business model makes economic sense.