Textbook rental broker finds niche partnering with public colleges to lower the cost of higher education.
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If overpriced textbooks play a role in the escalating cost of higher education, two additional villains are often professors, who assign books without thinking of the cost; and college bookstores, which stand in the way of change.
How to turn these villains into heroes? Rafter CEO Mehdi Maghsoodnia thinks he has the answer. Rafter works with colleges and college bookstores on textbook rental programs and provides a series of Web apps, including one to help faculty adopt the best textbooks while taking factors such as price and availability into account.
Criticizing professors for assigning pricey textbooks is unfair, particularly in the absence of tools to help them do better, Maghsoodnia said. "It's like medicine, where the doctor's incentive is to heal you. The professor's incentive is also to get the job done -- to educate you. It's difficult to ask him to also be an expert in the cost of distribution and friction in the distribution channel."
Just as pharmacy management services help control the cost of medications in the healthcare industry, Rafter is trying to control costs by managing the process of textbook adoption and getting textbook rental inventory into the bookstores. These services are particularly popular with public colleges and institutions, which are under political pressure to drive down the total cost of higher education.
Anthony Sanders, bookstore division manager at North Carolina State University, said his status as a salaried employee of a state institution rather than someone running a for-profit business is one reason he is motivated to work with Rafter. "The way I usually put it to the students is: I'm a state employee. I want to reduce the costs to students as much as possible. I don't get a dime more if we sell $2 million more in textbooks," he explained.
"A few years ago we investigated what it would take for us to start our own in-house rental program, and we came up with an estimate of $8.5 million in inventory costs, acquisition and storage," Sanders said. "It was cost-prohibitive." The university picked Rafter after evaluating several options for an outsourced rental program.
Campus bookstores are sometimes cited as an obstacle to innovations such as the introduction of free textbooks and other open educational resources. But they also have an opportunity to be part of the revolution by providing, for example, print-on-demand versions of digitally distributed books. Rafter is beginning to put more emphasis on managing digital resources, and Sanders said he is investigating the print-on-demand option.
"We want to be able to provide the digital products and instructor materials and be able to deliver them on our website seamlessly," Sanders said. "If we can partner with someone like Rafter, I think that's a huge head start." The university bookstore has already done some integration with Rafter's Web-based application programming interfaces, allowing visitors to the university website to execute transactions that will be managed through Rafter, he said. Having hired an NC State computer science graduate who is intimately familiar with the bookstore operation, Sanders said, "I'm very, very lucky to have an outstanding programmer [on staff]."
Rafter evolved out of BookRenter, which sells textbook rental services directly to students. That business continues, winning the 2012 About.com College Life Readers' Choice Awards as the best textbook rental website. The company name was changed to Rafter last year, reflecting a shift to emphasize working through the campus stores.
"We want to be a much more strategic partner to the campuses," Maghsoodnia said.
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