Textbook rentals through Amazon
Whether you went to college decades ago or your child is going today, you're familiar with the time-honored and wallet-emptying tradition of buying new textbooks for a premium at the beginning of the term, only to turn around and sell them at a depressing discount at semester's end. But Amazon.com (AMZN) hopes to change all that.

The company has just launched Amazon Textbook Rental, a service from the Internet retailing giant that will allow students to rent textbooks at up to 70% off, with a pool of thousands of titles to choose from.

Simply Click 'Rent Now'

Aside from the considerable savings from renting textbooks versus buying them, Amazon has also made the process easy. Buyers simply go to the company's existing home page, search Amazon.com for the book they want, and click on "Rent Now." Then, just as if they were buying the book, they select the shipping method and the payment option.

The books are dispatched directly from Amazon.com, and while normal shipping charges may apply, orders exceeding $25 are eligible for the company's free Super Saver Shipping. At the end of the term, students simply return the books with a prepaid label.

Not a Novel Idea

Amazon has long sold both new and used textbooks at significant discounts. New textbooks from Amazon sell at 30% off, while used textbooks are 90% off. And although Amazon is making its initial foray into renting, it's not the first company to do it. Bookrenter.com has been around since 2006, while rival Chegg.com was founded in 2007.

So what took Amazon so long to get involved in such an obvious sector of the book market?
Book Industry Study Group, an industry research and best-practices group, reports that in 2011 textbook rentals were 11% of the market -- up from 8% -- while textbook sales were 55% -- down from 59%. As such, Amazon may have felt it was time to get in on the action before it completely missed the boat. Or has the web-shopping innovator already missed it?

The Best Isn't Always the First

Apple (AAPL) didn't invent the MP3 player, nor did Ford (F) invent the automobile. Starbucks (SBUX) obviously isn't the world's first coffee shop. Yet all of these companies took existing ideas and made them better, usually by streamlining, simplifying, or beautifying -- that is, making the product more inherently attractive in some way.

This is the strength of Amazon's existing business, and it will be a strength in textbook rentals as well: Amazon makes it easy to buy anything from its site, and it has now done the same with renting textbooks. To boot, most students and parents are already familiar with the website. They know how to get around it, and, most importantly, they trust the company. For Amazon Textbook Rental to be a success, all the company needs to do is properly market it.

With tuition prices at all-time highs and an economy that's left purchasing power at all-time lows, this program is a real boon. And with all the money parents and students are going to save, maybe they'll treat themselves to a new Kindle -- after all, they're on the website anyway.


John Grgurich is regular contributor to The Motley Fool, and owns no shares of any of the companies mentioned in this article. The Motley Fool owns shares of Amazon.com, Ford Motor, Apple, and Starbucks. Motley Fool newsletter services have recommended buying shares of Apple, Amazon.com, Ford Motor, and Starbucks. Motley Fool newsletter services have recommended creating a bull call spread position in Apple, a synthetic long position in Ford Moto, and writing covered calls on Starbucks.


Increase your money and finance knowledge from home

Introduction to Preferred Shares

Learn the difference between preferred and common shares.

View Course »

Intro to Retirement

Get started early planning for your long term future.

View Course »

Add a Comment

*0 / 3000 Character Maximum