Slashing Student Costs
Buying textbooks, using them for a few months and then trying to sell them back to the bookstore is a frustrating tradition, where students get back only 10 percent of the purchase price or, worse, find out their books are worth nothing. Discouraged students often dump these books, which gave Colin Barceloux, a business student at Santa Clara University, an idea. He scooped up as many discarded books as he could and listed them on Half.com and Amazon Marketplace. They netted him $50,000 in two years.
Clearly, they weren't worthless; the problem was that the textbook buyback market was locally based and didn't reflect national demand. With the system of buying a book, using a book and selling it back, Barceloux notes, "All it is is a rental."
After graduating with a degree in management information systems in 2003, Barceloux worked in advertising, but the idea for a site that rented textbooks to students stayed in the back of his mind. In 2006, Barceloux took the plunge and devoted his full time to starting BookRenter.com. He invested all the money he'd earned selling books and spent a year developing the site with some friends from college.
The site, which went live in September 2007, rents books at up to 75 percent off their retail price. Students can rent books for 30, 45, 60, 90 or 120 days, and to make a return, they print out a free shipping label and drop it off with UPS. There's also an option to get an extension or buy the book outright, and the money paid for the rental goes toward the purchase price. The books are guaranteed to be in new condition--renters aren't allowed to write or highlight in them--and there are currently 1.25 million titles available, stored with BookRenter's fulfillment partners.
Right now, the young company is working on expanding its user base and Barceloux is finding that he's selling a concept students understand and are ready to try. "For students, it's really a no-brainer," he says. "Our challenge isn't getting people to use BookRenter; it's telling them we exist."
With marketing campaigns mostly on the major search engines as well as some ads on Facebook, Barceloux still finds word-of-mouth to be the best sales driver. He also plays up the green aspect of his business--reusing books to save trees--and has BookRenter certified as a green business.
The 26-year-old CEO is also improving BookRenter's technology and maintaining a startup atmosphere in its San Jose, California office. His 11 employees, made up of friends from college and people found through networking referrals, often come in late in the morning and stay well past midnight, sharing pizza for dinner. "I think some of the old-school mentalities of nine-to-five--performance reviews, memos, business casual--stifles creativity," Barceloux says.
While he expects books to be used at least five times, once the company starts getting books back in unrentable condition, Barceloux plans to donate them to literacy nonprofits and expand into used-condition book rentals--another way for students to save money. He also has plans to sell e-books and other digital content down the line.
With more than 6,000 rentals in January and February alone and a 114 percent increase in revenue from the third to fourth quarter in 2007, Barceloux has already seen one copycat business come on the scene. But in the $7 billion textbook industry, he says, "I welcome the competition. Our mission is to make education more affordable, and if other companies want to come in and compete and open up the space, I think that's great."