Stores Cater to Student Market

Greater Lansing Business Monthly, Dec 01, 2005 by Lupini, Sandra Guinness

Last St. Patrick's Day marked the 50-year anniversary of Gibson's Books first opening its doors to business. In today's retail climate this is a milestone. One would only need to speak with Matt Bueche briefly to realize, that in addition to business, this is also a tribute to family and community It was 1955 when Walter Gibson and Charlie Poquette partnered to open Gibson's Bookstore to serve the Michigan State University campus. This expanded into selling books out of the back of a station wagon to the emerging market developing at Lansing Community College. A Downtown Lansing location opened in 1959. Today Gibson's Bookstore occupies its original space on Grand River Avenue in East Lansing. The Downtown store, Gibson's Books and Beans, developed into an 8,000-square-foot facility at the ramp and has the corner covered with textbooks, trade books, gifts, convenience items and a cafe. Two sisters operate a similar business in Florida.

Just across from the MSU campus on Grand River Avenue there is the Student Book Store. SBS is only a few years shy of celebrating its golden anniversary. Back in 1952 Howard Ballein was in Buckeye territory selling books while studying at Ohio State University.

Ballein declared, "I discovered I had a good mind for books!" and this led to his retailing, wholesaling and traveling the educational book market. He reminds us that this was the time when pocket paperbacks were a new product and not many stores had developed a textbook buyback program. Ballein teamed up with four Big Ten partners in 1960, which proved to be a winning combination. He considers the secrets to their success to be knowledge, used books and the Green and White Shop. A large portion of floor space is devoted to the Green and White Shop. Today, there are 11 stores, the next generation is onboard, and Howard is a converted Spartan. If the East Lansing Student Book Store isn't cheering Green and White, then no one is.

The College Store, Ned's and the Spartan Bookstore are all under the umbrella of the Nebraska Book Company (NBC) as outlined by Sean O'Brien, regional manager. The story of NBC has a bit of a twist. This company originated on the campus of the University of Nebraska in 1915. College enrollments boomed all over the country after the end of World War II with GI education packages. In 1964 they picked up the College Book Company of California. NBC is here to provide the Michigan State University campus with the best in MSU clothing, gifts, textbooks, trade books and supplies. New expansion and acquisitions of existing stores has them selling some 8 million textbooks a year in more than 100 outlets. Nebraska Book Company estimates that they touch 80 percent of the student book buying market.

Matt Bueche explained that the business of college textbooks is fairly "cut and dry." Instructors and school departments decide which titles will be adopted for their courses during any given term. There are seven or eight books that will not be chosen for each book selected from the list. Publishers set cover prices and wholesale prices where there is no wiggle room. This leaves the retailers to determine only the quantity of their order. Howard Ballein added that electronic buying of books takes some of the skill and guesswork out of the order process, making it more exact. Ballein and Rueche would agree that the buyback program is a main area where they stand to improve on the small margins that exist in the publishing industry. Anyone in the book business knows this is a difficult equation to balance, so they look to resell a book a couple of times to increase margins. The buyback process can be complicated, but it is a good deal for both the store and the customer.

There is a fair amount of controversy over publishers and their pricing. It's been reported that the higher education publishing industry is generating $3 billion a year, and that texts are being updated about every four years independent of actual content changes. These new editions and supplemental materials are driving higher costs. While cover prices are rising along with tuition costs, there is a growing opinion that left unchecked this will drive many out of business.

Publishers defend their position by saying it is the used book market that drives higher prices. Then the customers weigh in, mainly studentsthousands of customers that, for the most part, are trying to get started in life. These students need to be savvy when the cost of books for one class may run in the neighborhood of $100 to $150. They are not as likely to buy their books new. They also are known to share books, use the library books, find information online and even, hard to imagine, go without. It will be a while before all this shakes out.

Some might say that the small business cannot compete on a global scale but let's face it there are many things small businesses will do for you that large chain stores and online retailing cannot. So, how is it that these stores are bucking the odds?