Did universities make a strategic error when outsourcing bookstores?

Several years ago, USF contracted out the management of its bookstore to Barnes and Noble, like many universities. At the time, many faculty and staff were concerned about how the outsourcing would affect staff who had worked at the bookstore, and whether the promises about better service and a self-sustaining business model would hold true.

Well, now we know: we got snookered. We’re not alone: Penn, Harvard, Boston U., Brandeis, Case Western, Columbia, Indiana University, Ohio State, Texas A&M, and others dot the list of campuses who have outsourced bookstore management. But all of them bought into a model of university bookstores that had close to monopoly control over student book purchases. The world was starting to change; the increase in publisher short-discounting and the development of used-book markets made it harder for universities to see much margin in operating the bookstore, so many (including USF) leased the operation to others. As one community-college dean explains, internally-operated bookstores send extra revenues into the institution’s operating budget, while an outsourced operation often relies on rent for revenue.

And less than 15 years after this wave of outsourcing began, the assumptions behind that model have fallen down around everyone’s ears. Students do not rely on university bookstores, many of us receive requests from students about the book lists for semesters that start several months down the road, and a new Florida law will shortly require the online publication of all required books for courses at least 30 days before each term begins. While many students are still stuck using campus bookstores because of the financial aid voucher, that will probably be the next target of leverage by student activists and possibly the Obama administration. If we are not at the beginning of the end of the college bookstore monopoly, we’re probably less than 10 years away.

There are other directions to take. Patrick Murray-John of the University of Mary Washington has argued that universities should give up their bookstores, or rather turn them into book marts/collection facilities — essentially taking the function and logistics currently used to package preordered books and using it to let students order from anywhere to be delivered to the college bookstore, which will then package it in a way that the current experience for preordering students is identical. Then, he asks, what else could a college use the bookstore space for? Something other than branded merchandise, he suggests…

But that possibility, and others, is foreclosed if the contract with Barnes and Noble, Follett’s, or the like. Depending on the length of the contract, universities and colleges may just have outsmarted themselves, locking themselves into relationships just as the model has to change once more.


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