Compared to online retailers like Amazon and Chegg, the St. Edward’s University bookstore sells most textbooks at higher prices.

Senior Nicole Morgan doesn’t buy her books from the bookstore.

“It’s very expensive,” she said. “Even renting prices are outrageous, so I usually go through Amazon or Chegg to just buy my books or rent.”

For many years, some students have dismissed the price difference as yet another way for the university to extract money from them, but the textbook business is far more complex.

The bookstore is owned and run by third-party vendor Texas Book Company. The company was established in 1975 and has nearly 2000 stores in 50 states, according to its website.

Texas Book Company has a contract with the university that will expire in October 2018, making it eligible for renewal. The contract is based on a model in which the university and the bookstore share profits and losses. The contract’s maximum profit margin is set by the university at 25 percent, said Kim Kvaal, vice president for Financial Affairs.

Bookstore Manager Tim Jackson said the bookstore always uses the 25 percent maximum profit margin because they would not be able to afford operational costs and make a profit if it was lower.

“25 percent is what we have to do. If we do anything less than that, we lose money almost every single time,” Jackson said.

Through the revenue share model, the bookstore accounts for 0.1 percent of the university’s overall revenue. Although the bookstore accounts for a small portion of the university’s revenue, Kvaal said having the bookstore on campus is important.

“The university’s primary goal in its agreement with Texas Book Company is to provide an on-site bookstore for our students and other members of the community as a convenience and to promote school spirit through its sales of logo merchandise,” Kvaal said.

But the prices of those items is a source of contention for some students.

Freshman Gavriel King has abandoned the bookstore for other online options.

“I pretty much bought all my books online,” King said. “I just didn’t have the money to even rent the books from the bookstore because they were still in the hundreds. So, it was just a bit easier to just get them online.”

Jackson acknowledged that the bookstore prices are higher than online retailers, but said there are practical reasons why.

                                     “I’ve got a company that’s trying to make money out of the store, I’ve got a campus that wants me to drive the cheapest books possible to students,” Jackson said. “And I’ve got to try to marry those two.”

The comparison with online retailers is relevant because that is where students are increasingly turning to buy or rent books.

Professors submit requests to the bookstore for the books they plan to assign in classes. The due dates for requests are May 1 for the summer semester, May 15 for the fall and Oct. 1 for spring.

Once professors submit their requests, the bookstore begins exploring how to get the lowest possible price by getting paperback versions instead of a hardcover or removing access codes, Jackson said. Access codes grant students additional online resources. If professors decide not to use those resources and the code is waived, the price of the book goes down. The store also begins searching for where to buy the books from.

Jackson said the primary way that the bookstore likes to purchase books is to buy them back from students. This, he said, makes the cost lower. If after professors submit their requests, it is determined that the number of sections of the course will stay the same, the bookstore will buy back books from students for 50 percent of the original cost.

If the book has not yet been requested or the number of course sections has been reduced, then the bookstore will buy the book back from students at a reduced rate of 10-20 percent of the original cost. The bookstore then sells the books to a different company, Jackson said.

Jackson has worked at other campuses. He said that, in his experience, St. Edward’s students are less motivated about selling books back to the bookstore. When they do, many fail to sell them during finals week, which Jackson said is the ideal time.

                                        “The goal is to have as many books in the system as we can before we hit finals,” Jackson said.

Many students instead attempt to sell their books at the beginning of the following semester. By then, however, the bookstore has already ordered from either wholesalers or publishers. When they buy from publishers directly, the publishers determine the textbook costs.

On top of that, the bookstore adds the profit margin at the maximum of 25 percent as allowed by the university. That makes a textbook priced at $100 by the publisher actually $125 for students. Twenty percent of the textbooks at the bookstore are purchased directly from publishers.

Although it will result in the lowest textbook prices, buying books back from students can be detrimental to the bookstore. Why? Because the store is then stuck with the books if they are not all bought back. Unsold books bought from wholesalers or publishers can be returned.

In addition, with timing and having to purchase from publishers, Jackson said the logistical costs of having a physical store also affects the costs of the books — an issue he said online bookstores do not have to take into account.

“The internet does not have a place to open shop,” Jackson said. “They don’t need a cashier or they don’t need a manager to run the business. They’re not open 9-5 Monday through Saturday so those logistical costs are gone.”he said.

Jackson also said it is difficult for the bookstore to compete with online stores like Amazon because they have additional avenues for revenue, such as Amazon Prime.

Online stores, Jackson said, can also afford to purchase larger quantities of books. At a small university like St. Edward’s, the bookstore can only order small numbers of books, which drives up prices.

Jackson said the private education at St. Edward’s is so specialized that the books assigned for courses are sometimes uncommon, leaving the bookstore to go through expensive lengths to provide the books.

As part of a program in place since last year, students looking to save money can rent any book in the bookstore.