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Online textbook vendors stake territory

Offering discounts to lure students away from college bookstores, the online shops hope to grab a piece of a $3 billion industry. But ties to publishers are even stronger than in the mainstream book business.

    Online textbook stores promise discounts to price-conscious college students, but unlike the general book market, the relationship between brick-and-mortar stores and publishers may prove more difficult to break in the $3 billion textbook market.

    As e-commerce picked up last fall, several online players burst onto the scene, including VarsityBooks.com, Textbooks.com, and Bigwords.com The sites all promise discounts on new books, and textbooks.com (owned by Barnes & Noble) and bigwords.com also offer used books, along with efollett.com, the online bookstore of distributor Follett.

    Textbook sites presented a challenge to college bookstores, once the sole source of course books for college students and a source of resentment as well, thanks to long lines and the perception that college stores enjoy a monopoly on students' business.

    "Students complain about the price of books, and they've also been frustrated at campus stores for not keeping good account of inventory," said Eric Kuhn, CEO of VarsityBooks.com, which had 283,000 unique visitors to its site in January.

    But the National Association of College Stores, with a membership of more than 3,100 stores, says the textbook sites' claims are exaggerated. VarsityBooks.com promises discounts up to 40 percent on some books, although most discounts are around 25 percent, and the best prices are usually found on the most popular titles.

    VarsityBooks.com says it is able to sell at lower prices because it is primarily a marketing company, and leaves the inventory and shipping responsibilities up to Baker & Taylor, a book distributor.

    But the aggressive pricing of sites like VarsityBooks.com has become a concern for publishers, who say distributors like Baker & Taylor are becoming more like retailers and shouldn't be able to buy at wholesale prices. The NACS is investigating whether publishers' pricing structures allow online retailers to sell at prices lower than college bookstores can buy wholesale. And at least one publisher, International Thomson Publishing, afraid of alienating its college bookstore clients, has plans to eliminate that advantage for Net retailers.

    The Internet has broken down distinctions between the various channels, according to ITP spokeswoman Kristen McCarthy, and that's why the new pricing is needed. "It's meant to level the playing field between online retailers and traditional college retailers," she said.

    Kuhn doesn't believe such moves will have much of an impact on VarsityBooks.com. "The reason why we can offer compelling discounts is not because of special pricing but from our business model," Kuhn said, citing the company's low overhead and advertising potential.

    College bookstores will need more than fair prices if they are to compete with the online stores. To that end, the NACS has created CourseWeb, an e-commerce product that college bookstores can use to create Web pages for each course offered at the college or university and eventually begin selling books online. CourseWeb is now in beta testing and will be available to campus bookstores by this fall, Buchs said.