VOLUME 2 | FALL 2009 Understanding Disintermediation
It isn’t often that a 17-letter word—seven syllables in all—is on everyone’s lips, but “disintermediation”
is just such a word.
Merriam Webster defines disintermediation as “the elimination of an intermediary in a transaction between two parties.” On college and university campuses, disintermediation translates into removing the bookstore from the process of providing students with textbooks. Disintermediation can take many forms, but often it occurs when publishers ask faculty to direct students to purchase textbooks directly from the publisher’s website.
A CAMPUS ISSUE
While disintermediation is often portrayed as a way to cut students’ textbook expenses, in the long run, if disintermediation takes hold, students and the entire campus community can suffer.
“When disintermediation occurs, there is a tendency is to say, ‘This is the bookstore’s issue,’” says Jade Roth, Vice President of Books. “In fact, the consequences of disintermediation are so broad in scope, it is really a campus issue.”
REDUCTION IN SERVICE
Students are the first to experience the downsides of disintermediation.
- Students are no longer guaranteed books for their classes. The campus bookstore is contractually obligated to provide a book for every student who wants one. Disintermediation removes those guarantees and can leave students scrambling to find a place to buy their books.
- Students must shop at different sites, each with its own fees and policies regarding shipping, processing, and returns. The campus bookstore offers the unparalleled convenience of having all the books students need in one place, with one consistent return, exchange, and buyback policy.
- If the bookstore is removed from the textbook transaction, it cannot provide students with less expensive alternatives if faculty request bundled specialty packages. The bookstore routinely seeks out less expensive options, including text alone, used, and digital titles.
- The main source of lower-cost used books is siphoned off. A centralized and extensive source of used books on campus is the most effective way to keep textbook costs down. Disintermediation all but eliminates this all important cost-saving option.
- Students lose the convenience of using financial aid for textbook purchases in the bookstore. For many students, access to financial aid for textbook purchases is an absolute necessity.
At most campuses, 70% of the bookstore’s revenue
comes from textbook sales.
REDUCTION IN REVENUE
Over time, if disintermediation takes hold, schools could see significant reductions in the amount of revenue they receive from the bookstore.
At most campuses, 70% of the bookstore’s revenue comes from textbook sales. The more disintermediation is allowed to occur, the greater the impact on the revenue stream from the bookstore to the school. This reduction reduces the amount of money available for funding scholarships, faculty positions, and special programs that benefit the entire campus community.
SOLUTIONS THROUGH COLLABORATION
Addressing disintermediation on campus begins with the bookstore. From reports, analyses of historic trends, and campus contacts, we can identify where disintermediation is potentially taking place. From there, however, combating disintermediation requires a unified approach between the school and the bookstore.
“We’ve had the greatest success in turning the tide on disintermediation when we join forces to raise awareness,” says Marc Eckhart, Regional Manager. “In most cases, it just takes educating the campus community about the negative long-term effects of disintermediation. But when we deliver this message in tandem with our university partners, we see a more immediate and lasting response.”
If you’d like to learn more about disintermediation, the signs to look for on campus, or ways to reduce its spread, contact your store or regional manager for details.