Net bookseller goes to college

As the major players concentrate on killing each other off in the online bookselling battle, a new challenger is setting its sights on a niche market aimed at college students.

Urging students to "get online, not in line," VarsityBooks.com opened its virtual shop this week, in time to catch the masses of college students as they return to campuses across the country. It is offering textbooks at discounts of 15 percent to 40 percent, while promising to ship them within two businesses days at a flat fee of $4.95, regardless of the number of books.

Deep discounts are a given in the online book market, with leaders Amazon.com and BarnesandNoble.com sometimes engaging in one-upmanship by discounting books 1 percentage point more than the other. In addition, the online bookselling giants have raced to strike expensive but high-profile "real estate" deals, offer community services such as bulletin boards and author chats, and even entice customers with affiliate programs designed to get them to sell books to others for a percentage of the sale.

Net book sales in general are looked upon as one of the first success stories of electronic commerce. Amazon has enjoyed the enviable status as a darling of Wall Street, often coming in second only to the mighty Yahoo among Internet stock prices.

But while sites such as Amazon are diversifying into other products such as music, VarsityBooks.com is going in the other direction, narrowing its focus to a particular market--and a lucrative one at that. The business model is well established in the brick-and-mortar world, where specialty shops such as those selling only athletic footwear have sprung up to compete with warehouse-style sporting good chains.

In fact, Nicole Vanderbilt, director of digital commerce for Jupiter Communications, said she "wouldn't be surprised to see Barnes & Noble do something like this at some point down the road."

VarsityBooks.com cites research from Jupiter, which found that U.S. college students "represent more than $875 million in online purchasing power." Moreover, 90 percent of college students describe themselves as "active" online users, and most wield at least one credit card.

The firm also said the college textbook market generates $2.7 billion in sales each year, citing figures from the Association of American Publishers.

VarsityBooks.com's 27-year-old cofounder and chief executive, Eric Kuhn, said the idea for his business struck him while he was working in a law firm, considering starting a Web business such as a travel or grocery service.

"I remember standing in line at the bookstore in law school," he said, noting that the long lines and high prices were always a stressful part of the school experience. Kuhn and his partner, Tim Levy, 28, met at George Washington University Law School and kept in touch as they started their law careers.

The idea for a Web site specializing in college textbooks "struck me as a natural," Kuhn said. "You're reaching a cost-conscious customer and a customer who is more Net-savvy than the average."

Kuhn said that, early on, he and Levy were able to strike a deal with book distributor Baker & Taylor to supply their offerings, which includes 250,000 textbook and general titles. Doing so keeps overhead costs down, which then allows the firm to offer discounts to customers, Kuhn said.

To further appeal to college students, the site is offering lists of courses by subject and the textbooks individual professors require for specific schools. Right now, that feature is available for five Washington-areas schools: the University of Maryland, the University of Virginia, Georgetown University, George Washington University, and George Mason University. Kuhn said the firm is planning to expand the feature nationwide.

Kuhn emphasized that students at other universities can use the site and search for books by author name, title, ISBN, or keyword.

"We don't see ourselves as a direct competitor to campus bookstores," Kuhn said. "We're just offering a service to students. A lot of administrators and professors are looking to save their students money."

But VarsityBooks.com is still entering a crowded market populated by some heavy hitters. Along with its focus on the niche college market, Kuhn said the firm is looking to boost revenues with advertising.

And that opens a door to all kinds of marketing opportunities. For example, Kuhn said, VarsityBooks.com plans to add other college merchandise such as sweatshirts and shot glasses to its roster "very shortly."