Vassar Colleg e Bookst ore Advisory Com mitt ee

Vassar College
Bookstore Research Report

April 16, 2002

** This report is solely for use by the Vassar College community and may not be
distributed to outside parties other than questionnaire participants.**
April 16, 2002

The College Bookstore Advisory Committee was established in February of

2001 by the Vassar Administration through the Office of the Vice President
for Finance (headed at the time by Stephen Dahnert). It meets regularly
with the Bookstore Manager and provides a channel of communication between
the store and store users, where store practices and policies can be
reviewed and discussed and suggestions for changes and improvements
offered. While a common feature to many college stores, it was deemed
particularly appropriate given the change in store management the preceding
semester.

At the same time, many members of the Vassar community had questions and
concerns about this newly implemented transition to a contract managed
college bookstore, the choice of Barnes and Noble College Bookstores Inc.
as the managing company, and the process that led to these decisions.
Several College constituencies, including the Vassar Student Association, asked
the Advisory Committee to provide relevant background so that there could be
informed discussion of these changes. A subcommittee was established for this
purpose and it began its research at the end of that semester. The final
report of the Subcommittee has been reviewed by the Advisory Committee and
is attached. We hope that the information provided gives the College
community both the background and structural framework (alternatives
available, basic terms, history, etc.) needed to understand and discuss
these issues.

Todd Dickey, President, Class of 2004--co-chair

Jesse Kalin, Prof. Philosophy--co-chair

Me m ber s o f t he Co lle ge Bo o ksto re Ad visor y C om m itte e

Marjorie Cox, College Bookstore Manager
Rebecca Jensen, '04
Paul Kane, Prof. English
Alex Klimoff, Prof. Russian
Catherine Lunn, Assoc. Dir. Alumnae/i Relations
Gerald Mason, Dir. Administrative Services
Josef Mintz, '02
Katrina Przyjemski, '04

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Me m ber s o f t he Rep o rt S u b co m mit tee
Leonard Nevarez, Assist. Prof. Sociology--Faculty co-chair
Evan White, '03--Student co-chair
Judith Cadwallader, Admin. Assist, Sociology
Todd Dickey, '04
Donna Grady, Assist. Dir. Career Development
Tiane Jennings, '03
Rebecca Jensen, '04
Jennifer Petersen, '02

*Comments or questions about this report can be sent to: csac@vassar.edu

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 Table of Contents

Introduction………………………………………………………………………..……... 5

An Overview of the College Bookstore Industry………………………………….….…..6

The History of Vassar College’s Bookstores……………………………………..……….8

Vassar’s Bookstore in Relation to Peer Institutions……………………………………..12

Appendix 1: Glossary……………………………………………………………………27

Appendix 2: Bookstore Survey Respondents…………………………………………….28

Appendix 3: Bookstore Questionnaire…………………………………………………………29

Endnotes and Bibiographical Information……………………………………………….40

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 The college store has been an important presence on college campuses for many
years, with some institutions having stores that are just as old as the college itself.
Histories of college stores from across America share important connections. Founding a
college store had been a unique venture that had differing roles than the corner store
serving an average community. The store was a service provided mainly for students to
be able to buy course books easily. The store was usually on-campus and owned either
by the institution itself, a cooperative society, or student union. Most institutional stores
have used a cost-recovery (that is, trying to break even) rather than a profit-centered
management approach, while cooperative stores and student union owned stores returned
profits to members either directly or through increased financial support for student
services. (Brief definitions of college store terminology can be found in Appendix 1.)
Over time, the role of the store expanded with some colleges branching out to include
other products in their stores including computer and convenience items.
Many in the industry agree that in the 1980s and 90s a shift occurred in the focus
and mission of many college stores in response to mainly economic concerns. “Twenty
years ago, college bookstores were operated with the goal of breaking even,” Kenneth L.
Bowers, director of the institutionally managed campus bookstore at the University of
California at Santa Barbara, told the Chronicle of Higher Education. “When revenue
streams to higher education began drying up in the early 1990s, administrations started
looking at the campus for new revenue sources.”1 The college bookstore became one of
those new revenue sources. Contract management, which provided up-front payout for
bookstore inventory and some form of guaranteed revenue, became an increasingly
attractive opportunity for college finance officers.
In the college store industry, contract management has become increasingly more
of an option for running a college store. The Chronicle of Higher Education estimated
that in 1994, 915 stores were contract managed while 1854 were institutionally managed
and 96 were student or cooperatively managed. By 1999, the number of contract
managed stores increased to 1250, and only 80 stores were managed through cooperative
or student associations.2

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 AN OVERVIEW OF THE COLLEGE BOOKSTORE INDUSTRY

In this section, we focus on how the different kinds of college stores actually
work. Published industry-wide data for student managed and cooperative stores is not
available, although a quick explanation of this type of management will be included.

Contract management
A contract managed college store (also known as a leased, privatized or
outsourced store) is one that is leased to a private or public for-profit corporation. One of
the characteristic features that distinguish the contract managed bookstore from its
institutional counterparts is its profit mission. Contract managed stores always orient
their operation toward making a profit, not just recovering their costs, in contrast to some
institutional, and all student, and cooperative stores. The two largest contract-
management companies as of January 2001 were the Follett Corporation (with more than
625 stores) and Barnes & Noble College Bookstores, Inc. (with more than 350). Both are
privately held companies.3
How does a store become contract managed? Although individual situations vary,
private corporations usually buy inventory and begin to pay store personnel after giving
the school a cash payoff. The college will usually maintain ownership of the physical
structure the store is housed in. Also, a portion of profits from the store will be
designated to go to the college and the corporation itself. Sometimes a fixed dollar
amount is guaranteed the college rather than a specific percentage of profits and
sometimes both. These figures are negotiated on a case-by-case basis.
Industry-wide information on profits and sales specifics of contract managed
stores is not readily available since almost all contract managed stores refuse to
participate in national college store surveys such as the National Association of College
Stores’ annual financial survey. Other groups, however, have published profit estimates
of these corporations based on available statistics. Connect2One, an alliance of

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independent college bookstores, has concluded that in 1998 Barnes and Noble yielded
$50 million in operating profits, and Follett yielded $75 million.4
In regards to service to the campus community, contract managed stores have had
mixed results. A marketing-research company reporting in the Chronicle of Higher
Education found in 1997 that for Follett Corporation 74 percent of administrators and
faculty members surveyed “approved of its performance,” while 55 percent approved of
Barnes and Noble’s performance. The survey, which measured attitudes of faculty and
administrators at colleges with contract managed bookstores, also found that the top
concern of faculty members and administrators was the higher prices attributed to
contract managed stores. “More than 70 percent of administrators said they were
satisfied with the pricing of textbooks, compared with only 30 percent of faculty
members” at their college’s contract managed store.5 Industry professionals also
comment that contract managed stores have large cash reserves and access to the newest
technology, while also acknowledging that profits are always the first priority since the
corporations that manage these stores are businesses.6

Institutional management
An institutionally managed store (also known as an independent store) is one that
is fully owned and operated by the same college or university in which it is housed. This
type of management has traditionally been the most common kind of management for
college stores in the United States. Historically, institutionally managed stores have been
maintained as a service for providing books and services to college communities rather
than as profit-making businesses. Breaking even or providing goods and services at a
loss have been common situations for the institutionally managed store. Increasingly,
though, colleges have looked to their institutionally managed stores to be a source of
revenue for the college. In contrast to contract managed stores, either cost-recovery or
profit models can work with an institutionally managed store. Profits generated from
institutionally managed stores are usually reinvested in the stores or the colleges
themselves. Many college store professionals think that retaining control of every aspect

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of store management and all of the profits are the main reasons stores chose institutional
management.7
No large-scale studies have been conducted solely on service levels of
institutionally managed college stores. Frequent comments from those in the college
store industry show that in institutionally managed stores, the authority of managers to
adjust to colleges' specific needs is valued, while the modest resources devoted to store
support systems such as warehouse and inventory capability are often seen as
shortcomings.8

Student and cooperative management

Student and cooperative types of management are currently the rarest forms of
college store management in the United States. Student managed stores closely mirror
institutionally managed stores. The major difference is that a student government or
association retains authority of a store rather than the college administration.
Cooperative stores can be structured in different ways. Owned by members who
purchase memberships in the store itself, governance usually rests with a board of
directors who sets policy and direction for the store. Frequently, store members receive
an incentive such as an end of the year rebate on all purchases or a store discount. Both
student managed and cooperatively managed stores are not-for-profit entities. No
published reports were available documenting pricing and service information for these
types of stores.

THE HISTORY OF VASSAR COLLEGE’S BOOKSTORES

In this section, we provide a brief history of Vassar College’s bookstore to

contextualize its recent change to contract management. Such management changes are
not without precedent at the college. Most notably, until 1998 two different entities
existed side by side at Vassar College, separately managed but sharing the same
bookstore space: the College Store and the Vassar Cooperative Bookshop. The first store
associated with Vassar College was the College Store proper. Institutionally managed by

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the college, its merchandise was limited to course textbooks and stationery, with
individual copies of other kinds of class-related books ordered separately. Initially, the
College Store did not sell trade or used books, which students had to find at local
booksellers.

Two bookstores for one college

By 1918, students, faculty, and other individuals began to express visible interest
in filling this “gap in service which the college renders the students,” in the words of
Vassar College’s acting president George Nettleton.9 In that year, a committee of college
seniors invited Mr. Bryne Hackett, president of The Brick Row Book Shop of New York
City, to Vassar to advise them on this issue.10 Four years later, the move to set up a
second bookstore gained serious momentum. Mr. Hackett urged that a second bookstore
be operated as a commercial enterprise paying dividends to underwriters.11 However,
president Nettleton replied that Vassar students had rather clearly expressed their
preferences that it be managed as a cooperative store.12
Over the objections of at least one local bookstore owner,13 the Vassar
Cooperative Bookshop was established on the second floor of Main Building as a non-
college entity on January 17, 1923.14 As the May 1931 “Vassar Cooperative Bookshop
Commencement News Sheet” explained:

The bookshop is, as the name implies, a cooperative. It is owned by the students,
faculty and alumnae who have paid membership dues. These membership rates
are:
Life membership $5.00
Undergraduate membership (4 years) $2.00
Faculty yearly membership $1.0015

When it registered profits at the end of the year, the Cooperative Bookshop gave
members a retroactive discount in the form of a rebate, which usually varied between 10
and 15 percent of store profits.16 The store was run by a paid manager (the first being

9
Marion Bacon, who stayed on until 1967) who answered to a committee of students and
one appointed faculty member.17
The historical record suggests that the Cooperative Bookshop carved out a social
and economic niche quite distinct from the College Store in at least three ways. First, the
two stores’ inventory did not overlap; the College Store sold textbooks for about three-
quarters of all the departments at Vassar, while the Cooperative Bookshop handled
textbooks for the remaining departments.18 Second, the College Bookshop took an active
role in student life and alumni relations, at least in its early days. For instance, it sent out
to selected alumnae reading lists that named the “ten books that it simply cannot bear to
have you miss”; alumnae could mail order these books at no shipping costs for orders
over $519 It also offered members discounted subscriptions to popular magazines and
sponsored lectures by literary figures like Lewis Mumford, Edna St. Vincent Millay, Carl
Sandburg, and Stephen Vincent Benet.20 Third, the Cooperative Bookshop made efforts
to avoid any appearance of commercial competition with the College Store. This is
suggested, for example, by a 1930 incident in which the Vassar College Trustees
investigated what appeared to be “commercial advertisements of the Co-operative
Bookshop in current magazines.”21
The two bookstores seem to have operated alongside one another without
significant change up into the late 1960s, a period in which college enrollment increased
gradually from 1146 students in 1922 to 1603 students by 1966.22 By the 1960s, the
College Store expanded its merchandise to include course materials, clothing, and food.
In 1966, when Virginia Houk replaced long-time manager Helen Miller, annual gross
sales at the College Store had reached approximately $135,000. Three years later, when
Houk was in turn replaced by Claire Tooker, annual gross sales had increased to
$225,000.23 (We could not find sales figures for the Cooperative Bookshop.)
1969, the year when Vassar College became a coeducational institution, marked
an important shift in the relationship between the two bookstores. In that year, the
Cooperative Bookshop approached the college administration to borrow money for
purchasing textbook inventory. Its request was denied because the administration felt
that it was the College Store’s responsibility to sell textbooks. Consequently, the

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Cooperative Bookshop became a seller of trade books exclusively, continuing to order
textbooks for those departments that provided larger (40-45 percent) margins while
letting the College Store take over its few departments with smaller (20 percent)
margins.24 (See Appendix 1 for a definition of “margin” and the distinction between
“textbook” and “tradebook.”) From 1969 until 1972 Josephine Russo managed the
Cooperative Bookshop; subsequent managers included Eileen Temple (1972-76) and
Sherry Smith (1977-98).25 By 1972, the Cooperative Bookshop stopped paying dividends
to its members. In 1974, the College Store moved with the Cooperative Bookstore into
the basement floor of the College Center, where the two entities operated as separate
businesses out of a single location for almost a quarter of a century.

Recent shifts in management format

In the last four years, Vassar College has seen two significant shifts in bookstore
management. In 1998 the Cooperative Bookstore merged with the College Store, thereby
effectively ending the former’s existence. In the merger, all trade books and the
remaining textbooks previously sold by the Cooperative Bookstore now became
merchandise of the College Store. The three full-time Cooperative Bookstore staff
became Vassar College employees, and their salaries (totaling $100,000) and benefits
were absorbed into the College Store budget.26 By the next year, the College Store
moved into World Wide Web sales, establishing a web page for on-line ordering on the
Vassar.edu web site.
Two years after the bookstore became the exclusive province of Vassar College,
college president Frances Fergusson initiated yet another shift in bookstore management.
In July 2000, the college signed a contract agreement with Barnes & Noble College
Bookstores, Inc., for the latter to operate the College Store. After Claire Tooker’s
retirement at this time, Marnie Cox became the bookstore manager. For this report, we
were unable to obtain evidence that would illuminate the specific motivations behind this
management shift beyond the following: According to former manager Tooker, the
College Store was not “in the red” (i.e., unprofitable) when president Fergusson decided
to contract with Barnes & Noble. By 2000, its annual gross sales had increased to

11
$2,500,000—more than an 1100 percent increase since 1969, whereas college enrollment
had increased only 40 percent over that period.27 Still, the economics behind managing a
profitable bookstore may illuminate this latest change in Vassar’s bookstore
management. Reviewing how bookstore managers understand these economics is one of
the concerns of the following section.

VASSAR’S BOOKSTORE IN RELATION TO PEER INSTITUTIONS

Here we discuss how Vassar’s bookstore compares to other college bookstores

based on a survey we sent out to 33 colleges (listed in Appendix 2). 20 of these colleges
are “peer institutions” that Vassar College compares itself to (and sometimes consults
with) on a variety of administrative and curricular issues. They consist mostly of other
elite liberal arts colleges that are comparable in terms of the make-up, competitiveness,
and (very importantly, where bookstores are concerned) size of their student body. Only
two peer institutions are dissimilar in these regards: Dartmouth College (which also
instructs graduate students) and Barnard College (which shares administrative and
support facilities with Columbia University). The other 13 colleges we surveyed—a mix
of research universities, community colleges, four-year state universities, and technical
schools—are very much not peer institutions; instead, they reveal what is going on in the
broader world of higher education bookstores. Below, we mention survey results from
this other group of colleges only where they differ dramatically from Vassar and its peer
bookstores.
Of the 34 surveys we sent out (one college had two bookstores), 24 colleges
responded for a response rate of 71%—pretty decent for surveys. We were especially
pleased that 16 of Vassar’s 20 peer institutions responded; this 80 percent response rate
makes our survey findings fairly representative of the institutions that Vassar College
considers its peers. The survey questions we asked can be found in Appendix 3.

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General characteristics of college bookstores
The bookstores at Vassar College and most of its peer institutions serve student
bodies of no more than 5,000 students (the exceptions are bookstores that serve more
than one college). Three of every four peer bookstores are located on the premises of
their college; the rest are located in the surrounding neighborhood. There is also wide
variation in the hours that college bookstores stay open; Vassar is like half of its peer
institutions in operating 40-49 hours per week (Figure 1).

Figure 1
Number of hours per week Percentage of
that bookstore is open bookstores

30-39 13%

40-49 50%

50-59 13%

60 or more 25%

Like Vassar before the recent addition, most (73%) of peer bookstores have less
than 5,000 square feet. In fact, retail square footage is one aspect where Vassar’s peer
institutions differ from other kinds of colleges, which are much more likely to have larger
bookstores. Nevertheless, Vassar and 40 percent of its peer institutions have expanded
their facilities or built all new bookstores in the last five years. Vassar’s square footage
currently is 6700 square feet.
Almost all peer bookstores are like Vassar in that they consider students to be
their primary market and the non-student college community (faculty, staff, and their
families) their secondary market. Non-peer bookstores, especially at large schools, are
more likely to consider local area residents (and even tourists) as their secondary market.
Relatedly, textbooks are typically the primary source of sales in a college bookstore.
Vassar and 88 percent of its peer bookstores report that textbooks are their primary
source of sales; the others cite school supplies and other books.28 Additionally, college

13
bookstores vary in the merchandise they sell in addition to textbooks, particularly outside
of “essential” school merchandise (Figure 2).

Figure 2
Other merchandise Percentage
sold of schools29

General books 94%

School and office supplies 94%

Apparel with campus insignia 94%

Computer products 94%

Gift items 94%

Pharmacy goods 75%

Grocery 69%

Apparel without campus insignia 38%

Other 50%

College bookstores are well aware that students have other options when they buy
textbooks. Only one-fourth of peer bookstores claim that students generally do not buy
their books elsewhere; the rest report that students turn to Internet booksellers (56
percent—Vassar’s bookstore cites this as well), local bookstores (38 percent), and private
sales between students (6 percent). Not surprisingly, college bookstores view Internet
booksellers (44 percent in addition to Vassar’s bookstore), local booksellers (44 percent),
and (for one institutionally managed bookstore) even contract bookstore management
corporations as their primary source of competition.

College bookstore management

Vassar College resembles almost 60 percent of its peer bookstores in the fact that
it is contract managed (Figure 3).

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Figure 3
Form of Percentage of
management bookstores30

Institutional 41%

Contract managed or owned by Follett 26%

Contract managed by Barnes & Noble 17%

Other contract management 17%

Cooperatively managed bookstores are often brought up in the discussion of alternate

forms of bookstore ownership. However, the only cooperative we surveyed appeared at a
major public research university (not reflected in Figure 3). Since none of Vassar’s peer
institutions currently has a cooperative bookstore, the rest of the bookstore patterns we
discuss below do not pertain to this form of management.
Although a significant presence in the college bookstore industry, Barnes &
Noble College Bookstores, Inc., which contract manages Vassar’s bookstore, is not the
dominant player. That distinction goes to the Follett Corporation, which manages or in a
few cases owns one of every four peer bookstores. This complements Follett’s strength
in used textbook distribution, a niche industry where Barnes & Noble has no role at all
(Figure 4).

Figure 4
Used textbook Percentage of
distributor bookstores31

Follett 44%

MBS 44%

Nebraska 12%

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The business of college bookstores
College bookstores do not seem to vary widely in the costs they incur, the profits
they expect, and the competitive environment they face. Before taxes, most peer
institutions are like Vassar in that their bookstores generate between $1 million and $3
million in annual sales (Figure 5).32

Figure 5
Pre-tax sales Percentage of
per fiscal year bookstores33

Up to $500,000 7%

From $500,000 up to $1 million 7%

From $1 million up to $3 million 64%

From $3 million up to $6 million 14%

More than $6 million 7%

Salaries and wages represent the most substantial cost that college bookstores
must meet; Vassar and 86 percent of peer bookstores report this as their primary cost,
while 7 percent each cite bookstore inventory and real estate/infrastructure, respectively.
After all costs have been paid, Vassar and 77 percent of peer bookstores run a profit
every year; the rest do so at least half the time (i.e., every other year).34 However, profit
levels tend to be rather modest; Vassar and 70 percent of its peer bookstores only
generate up to $200,000 annually before taxes (Figure 6).35

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Figure 6
Pre-tax profits Percentage of
per fiscal year bookstores

Up to $200,000 70%

From $200,000 up to $250,000 10%

From $250,000 up to $300,000 10%

From $300,000 to $400,000 10%

Textbook policy
College bookstores do not vary much in how they price textbooks. New
textbooks are typically assessed a margin of 20-29 percent. There is some systematic
variation within this range; only institutionally managed bookstores reported new
textbook margins of 20-24 percent, whereas contract managed bookstores were
moderately more likely to use margins in the 25-29 percent range.36
All of the bookstores we surveyed purchase and sell used textbooks. Like Vassar,
80 percent of peer bookstores buy and sell these at a fixed percentage of the retail price:
in the 20-29 percent range for all but one case. The other 20 percent buy and sell with
priced data from their used textbook distributor or some other method. Additionally,
Vassar and most peer bookstores (81 percent) sell customized publishing (i.e.,
coursepacks) which, like new textbooks is typically assessed a margin of 20-29 percent.
All of the bookstores we surveyed are able to order any new trade book or
textbook currently in print, no matter the publisher. However, they vary in how they
determine the number of required books they purchased for class use (Figure 7).
Vassar’s bookstore is like 44 percent of its peer bookstores in that it orders one copy of
each required textbook per students enrolled in the current or most recent course.

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Figure 7
Course textbook Percentage of
ordering policy bookstores37

Order one copy of each required textbook per students 44%

enrolled in the course.

Order a fixed percentage of copies of each required 44%

textbook based on students enrolled in the course.

Other 12%

Almost two thirds (or 5 of 16) of Vassar’s peer bookstores ship back unsold
textbooks after the first half of each term (Figure 8). Vassar’s bookstore specifically
ships back in the second half of the term before exam week.

Figure 8
Policy for shipping back Percentage of
unpurchased textbooks bookstores

Within 3 weeks of term’s beginning 15%

From 3 weeks to first half of term 8%

From second half of term to exam week 31%

Exam week or later 46%

Vassar and more than half (56 percent) of peer bookstores list the required books
for classes each term for public view, either in the store or on a website. Among these
bookstores, there is little pattern in how soon before the first day of the term that list is
made available (Figure 9). Vassar’s bookstore makes its required book list available four
to five weeks before each term begins.

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Figure 9
How soon is the required book list Percentage of
made available? bookstores38

More than 6 weeks before the term 33%

begins

4-5 weeks before the term begins 22%

2-3 weeks before the term begins 22%

Less than two weeks before the 11%

term begins

By the first day of the term 11%

Feedback to management
All but one of the bookstores we surveyed maintains a website. However,
websites differ in their function and value to the bookstore. Among Vassar’s peer
institutions, 80 percent support e-commerce, (i.e., direct ordering and sales via the
website). However, only 47 percent, or less than half, make their textbook list available
on the website. Vassar’s bookstore does both.
Almost all peer bookstores have at least one mechanism for customers to submit
comments and complaints (Figure 10). Vassar has three: a suggestion box in the store, an
e-mail address, and a website (http://www.bkstore.com/vassar/). Of course, none of these
mechanisms ensure that bookstores will accommodate all customer feedback.

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Figure 10
Mechanism for Percentage of
customer feedback bookstores39

An e-mail address for customer 63%

feedback

A website for customer feedback 63%

Periodic surveys 63%

A “suggestion box” at the 56%

bookstore

Other 38%

None of the above 13%

A related issue is whether there is some official college entity that exercises some
oversight over bookstore policy and management. Only three-fourths of Vassar’s peer
institutions have such entities, and none of them can require changes in policy and
management (Figure 11).40 In addition to Administrative officers, Vassar’s bookstore is
monitored by an advisory committee of faculty and students that can only recommend
changes in policy and management.

20
Figure 11
Entities that monitor the bookstore Percentage of
on behalf of the college bookstores41

An administrator representing the 38%

college president or trustees

A committee that can only 31%

recommend changes in policy and
management

Other 13%

None of the above 25%

The influence of contract management

There is some evidence that the kind of management a bookstore adopts
influences the business mission that a bookstore adopts. One issue here is where
bookstore profits go. Profits are primarily reallocated either to the college’s general fund
or a private corporation, depending entirely on whether the bookstore is managed
institutionally or by contract, respectively. Vassar’s bookstore, then, is not unlike other
contract managed bookstores in that profits go primarily back to the private corporation.
More than half (54 percent) of all peer bookstores guarantee their college some revenue
each year, based on different formulas (Figure 12).

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Figure 12
Guaranteed revenue Percentage of
to the college? bookstores

No guaranteed revenue 46%

Yes, both a percentage of sales and 31%

an annual minimum

Yes, just a percentage of sales 15%

Yes, just an annual minimum 8%

Contract managed bookstores always guarantee colleges an annual minimum

amount of revenue that varies across institutions. Barnes and Noble, for example,
guarantees Vassar College 5-9 percent of sales as well as a minimum between $100,000
and $500,000. Importantly, institutionally managed bookstores do not always guarantee
a minimum. In this way, they may create fiscal losses for their college when bookstores
do not make profits at the end of the year. The guarantee of a minimum amount of
revenue, as well as the large payment colleges receive upon turning over management,
are clearly important incentives for colleges to give over bookstore management to
private firms.
Is it the case that contract managed bookstores, with their promise of guaranteed
profits, are necessarily more profitable to colleges? In our interviews with survey
respondents, some managers at institutional bookstores explained that the “huge infusion
of cash” that contract bookstores offer (for example, when they purchase bookstore
inventory at the onset) is a big enticement. However, many claim that institutional
bookstores can stay in the black if managers “do their homework.” One manager went so
far as to declare, “A store that went from institutional to leased is a sign of poor

22
management.” This may be the case, although it is beyond the scope of our report to
suggest just how college bookstores can stay solvent. Still, to be fair, managers’
“homework” has no doubt become more difficult and less predictable amidst recent
changes in the market (like competition from online booksellers and the demand to carry
non-text trade books) and perennial sources of loss (like bookstore theft). “Textbooks are
not a growth business,” one manager at a contract managed bookstore reminded us; the
pressures on college bookstores are great to adopt other strategies and turn to other kinds
of merchandising to stay solvent.
Are all college bookstores essentially concerned about profits? Our survey asked
bookstore managers to state what they perceived as the bookstore’s primary objective:
cost recovery (“providing the college community with merchandise most efficiently even
at a loss”), profit (“providing the college community with merchandise most efficiently at
a profit”), marketing (“selling merchandise that promotes the college name”), or other.
We found that all contract managed bookstores cited profits as their primary objective.
From this finding, one should not infer all institutionally managed stores are willing to
accept losses in order to serve their college constituencies; in fact, they are as likely to
cite profit or cost recovery as their primary objective. Nevertheless, there is some
relationship between management format and business mission: Contract managed
bookstores were 19 percent more likely than institutionally managed bookstores to
espouse profit as their primary objective.
Perhaps more than in matters of profit guarantees and business objectives,
students are likely to encounter management differences in bookstore policies concerning
pricing (i.e., margins), merchandising, and other day-to-day operations. An important
question here is whether bookstore managers have authority to set these policies. Below,
Figure 13 reports the answer for Vassar and describes the pattern among its peer
institutions on a variety of important bookstore policies. Note that in cases where the
bookstore managers must accept policies set by higher authorities, the latter can include
the college administrators as well as the “home office” of private corporations, even for
contract managed bookstores.

23
Figure 13
Do bookstore managers have authority Vassar Other contract Institutionally
to set store policy by themselves? College managed stores managed stores

1. Customized publishing mark-up No Never Always

2. Used textbook mark-up No Rarely Always

3. Amount returned to students for No Rarely Always

used book buy-back

4. Choice of vendors for apparel and No Rarely Always

gifts

5. Clothing mark-up No Rarely Always

6. Inventory management system No Rarely Always

7. Point-of-sales system No Rarely Always

8. The decision to release data to the No Rarely Always

NACS Annual Financial Survey of
College Stores

9. Employee scheduling Yes Always Always

10. Allocation of floor space to Yes Usually Always

different products

11. The decision to participate in this Yes Usually Always

survey

12. Store hours Yes Usually Usually

13. New textbook mark-up No Usually Usually

14. Employee salary and benefits No Usually Usually

15. Trade book inventory Yes Unclear Always

16. Dates and times of used book buy- Yes Unclear Always
back

24
17. Retail sales or promotion Yes Unclear Always

18. Allocation of profits (to college, No Never Never

management, etc.)

It appears that managers of institutionally managed bookstores have the authority

to set certain store policies that their counterparts in contract managed bookstores do not
(see items 1-8). Most of these policies revolve around the prices students pay for most
goods (except new textbooks) and the inventory systems bookstores use. However,
managers in either kind of college bookstore usually have equal authority to set the
policies around bookstore hours, staffing, and—very importantly—new textbook pricing
(see items 9-14). Furthermore, it is unclear whether contract management constrains
manager authority around textbook inventory, buy-backs and promotions (see items 15-
17). Meanwhile, it is quite clear that no bookstore manager has the authority to
determine the allocation of bookstore profits (item 18).
Another area where management might affect bookstore policy is openness and
sharing of information about bookstores—precisely what an exercise like this survey
relies upon. Our evidence here is indirect but telling. For example, one-third of Vassar’s
peer bookstores—all of them contract managed—would not answer our survey question
about profit levels (referred to in Figure 6). Although some bookstore managers report
that this kind of information becomes “proprietary” once contract management takes
over, it would be wrong to infer that contract management purposefully withholds such
information from the campus community. More accurately, this information moves out
of the hands of bookstore managers on the store floor and into those of administrators
who are removed from day-to-day bookstore operations. (This is how we were able to
obtain the profit formula for Vassar’s bookstore from Gerald Mason, director of
Administrative Services.)
Another reason why bookstore managers may not share policy information is
because they have not worked long enough to develop their “institutional memory.”
Very telling is the response to a survey question we asked about the number of changes in
management. Almost half (48 percent) of bookstore managers apparently did not know

25
the history of their bookstore management sufficiently to answer this question. We might
also add that managers at some institutional bookstore mentioned the “longevity” of their
staff, some of whom have been working at the bookstore as long as 25 years. While we
found no clear relationship to management format, employee turnover is clearly a fact
throughout colleges, not just in their bookstores. As administrative and staff job markets
become more competitive, it may be unrealistic to expect college bookstore managers to
stay on as long as some of those we surveyed. Thus, the loss of “personalized”
management and community ties that contract managed bookstores are sometimes
blamed for, may in fact reflect more general changes in the college.

Questions or comments about this report may be sent to the

College Bookstore Advisory Committee at: csac@vassar.edu
Thank you.

26
 APPENDIX 1
GLOSSARY

contract managed store: a store leased to a private or public for-profit corporation by a

college; also known as a leased, privatized or outsourced store.

cooperative store: a store that is owned and managed by its members through a board of
directors.

institutionally managed store: a store that is fully owned and managed by the same
college or university in which it is housed; also known as an independent store.

margin: the difference between wholesale and retail price, reflecting work required to
bring a product to market.

mark-up: the difference between wholesale and retail price of products, not reflecting
work required to bring products to market.

student managed store: a store managed by a student government or association.

textbook: a book required for use in the classroom.

trade book: a book that is usually pre-priced by the publisher that may or may not be
used by a class.

27
 APPENDIX 2
BOOKSTORE SURVEY RESPONDENTS

“Peer institution” colleges

Amherst (two bookstores) Middlebury
Barnard Mt. Holyoke
Bowdoin Oberlin
Bryn Mawr Smith
Colby Swarthmore
Colgate Trinity (did not reply)
Dartmouth Union (did not reply)
Franklin & Marshall Wellesley
Hamilton Wesleyan (did not reply)
Haverford Williams (did not reply)

Other institutions
Allegheny College
Brown University
Culinary Institute of America (did not reply)
Dutchess Community College (did not reply)
Glendale Community College
Howard University (did not reply)
Macalester College
Northwestern University (did not reply)
Rensselaer Polytechnic Institute
SUNY New Paltz
SUNY Purchase (did not reply)
University of California Los Angeles (did not reply)
University of Texas

28
 APPENDIX 3

VASSAR COLLEGE BOOKSTORE RESEARCH SUBCOMMITTEE

QUESTIONNAIRE

This questionnaire inquires about your college bookstore, its policies and its economics. It has
been prepared by the Vassar College Bookstore Research Subcommittee, which was organized by
the Vassar College Bookstore Advisory Committee to investigate how other colleges run their
bookstores. To this end, we are surveying 30 of our peer colleges and other selected secondary
learning institutions. No one will be quoted from this survey; the answers will be aggregated and
reported in a final report that the Subcommittee will produce by the end of this year. The purpose
of the final report, as well as any comparisons that may be made with your college based on the
survey, is solely to help Vassar College evaluate its own bookstore. The report will reach no
other audience, nor will the answers you give get back to your own institution unless you wish to
request a copy of the report.

Do you agree to take this survey? Check yes or no.

Yes ______ No _______

Write the name of the college or university that your bookstore serves:

______________________________________________

Would you like a copy of the final report from the Vassar College Bookstore Research
Subcommittee? Check yes or no.

Yes ______ No _______

Instructions: Circle the letter that corresponds to your response. If your response includes a blank
line, fill it in with the specific name, number, or phrase that applies.

1. What is the size of your college?

A. Less than 1000 students
B. 1000-4999 students
C. 5000-14,999 students
D. 15,000-24,999 students
E. 25,000 or more students

2. Does the college have a bookstore on its premises? [If yes, skip to question 5]
A. Yes
B. No

29
3. If the college does not have a bookstore on its premises, how do students buy textbooks?
A. Local bookstores
B. Internet: _________________
C. Other: _________________

4. Why has the college decided not to have a bookstore on its premises? [Write response and go
to conclusion]

5. How many retail square feet does the college bookstore have?
A. Less than 1000 square feet
B. B. 1000-4999 square feet
C. 5000-9999 square feet
D. 10,000-19,999 square feet
E. 20,000 or more square feet

6. What else does the college bookstore sell besides textbooks? [Circle all that apply]
A. General books
B. School and office supplies
C. Apparel with campus insignia
D. Apparel without campus insignia
E. Computer products
F. Gift items
G. Grocery
H. Pharmacy goods
I. Other: _________________

7. What is the primary market that the college bookstore serves?

A. Students
B. Non-student college community (faculty, staff, their families)
C. Local area residents
D. Tourists and non-local residents

8. What is the secondary market that the college bookstore serves?

A. Students
B. Non-student college community (faculty, staff, their families)
C. Local area residents
D. Tourists and non-local residents

30
9. How many hours is the bookstore open each week?
A. Less than 30?
B. 30-39
C. 40-49
D. 50-59
E. 60 or more

10. Are textbooks the primary source of sales in the college bookstore?
A. Yes [If yes, skip to question 12]
B. No

11. If textbooks are not the primary source of sales, what is?
A. Other books beside required textbooks (e.g., faculty authored books)
B. School and office supplies
C. Apparel with campus insignia
D. Apparel without campus insignia
E. Computer products
F. Gift items
G. Grocery
H. Pharmacy goods
I. Other: _________________

12. Do students buy textbooks elsewhere besides the college bookstore?

A. Yes, locally: _________________
B. Yes, on the Internet: _________________
C. No
D. Other: _________________

13. What is the typical margin on new textbooks?

A. Less than 20%
B. 20-24%
C. 25-29%
D. 30-35%
E. More than 35%

31
14. What policy does the bookstore use to determine the number of books purchased for classes
in the approaching term?
A. Order one copy of each required textbook per students enrolled in the current or most
recent course.
B. Order one copy of each required textbook based on maximum number of seats.
C. Order a fixed percentage of copies of each required textbook based on students enrolled
in the course.
Write in percentage: ________
D. Order a fixed percentage of copies of each required textbook based on maximum number
of students permitted in the course.
Write in percentage: ________
E. Order the same number of books for each course.
Write in number: ________
F. Other: _________________

15. Does the college bookstore buy and sell used textbooks?
A. Yes
B. No [If no, skip to question 18]

16. What policy does the college bookstore use to price used textbooks?
A. Buy and sell at fixed percentage of retail price?
B. Buy and sell using price data from the distributor? [If B, skip to question 18]
C. Other: _______________________ [If C, skip to question 18]

17. What is the typical reduction of the new retail price for used textbooks?
A. Less than 10%
B. 10-19%
C. 20-29%
D. 30-40%
E. More than 40%

18. Does the college bookstore buy and sell customized publishing (like course packs)?
A. Yes
B. No [If no, skip to question 20]

19. What is the typical margin on customized publishing?

A. Less than 10%
B. 10-19%
C. 20-29%
D. 30-40%
E. More than 40%

32
20. When does the college bookstore ship back textbook inventory for each term?
A. Within 3 weeks of term’s beginning
B. From 3 weeks to first half of term
C. From second half of term to exam week
D. Exam week or later
E. Other: _______________________

21. Is your store able to order any new trade book or textbook currently in print, no matter the
publisher?
A. Yes [If yes, skip to question 23]
B. No

22. If not, why? [Write response]

23. What in your opinion is the chief source of competition facing the college bookstore?
A. Online booksellers
B. Local booksellers
C. Other: _______________________
D. There is no competition.

24. Does the college bookstore have its own website?

A. Yes
B. No [If no, skip to question 29]

25. Who manages the college bookstore website?

A. Bookstore employee
B. Other college employee
C. Private corporation: _________________
D. Cooperative: _________________
E. Other: _________________

26. Does the college bookstore list ordered textbooks on its website?
A. Yes
B. No

27. Does the college bookstore support e-commerce (i.e., direct ordering and sales through the
site)?
A. Yes
B. No

33
28. What percent of sales does the college bookstore project from its website for this fiscal year?
A. Less than 5%
B. 5-9%
C. 10-14%
D. 15-20%
E. More than 20%

29. Is a list of required books for every course posted in the bookstore or on the Internet for every
member of the college to see?
A. Yes
B. No [If no, skip to question 31]

30. How far in advance is the list of required books for every course made available?
C. More than 6 weeks before the term begins
D. 4-5 weeks before the term begins
E. 2-3 weeks before the term begins
F. Less than two weeks before the term begins
G. By the first day of the term

31. Who currently owns the college bookstore?

A. Institutional (college or student union)
B. Private corporation: _________________
C. Cooperative: _________________
D. Leased: _________________
E. Other: _________________

32. How long has the bookstore been owned this way?
A. less than 5 years
B. 5-10 years
C. 11-20 years
D. More than 20 years but less than bookstore’s opening
E. Since bookstore’s opening
F. Not sure

33. Have there been changes of ownership?

A. Yes
B. No [If no, skip to question 35]

34. How many changes of ownership have there been?

A. 1
B. 2
C. 3 or more
D. Not sure

34
35. Who currently manages the college bookstore?
A. Institutional (college or student union)
B. Private corporation: _________________
C. Cooperative: _________________
D. Leased: _________________
E. Other: _________________

36. Have there ever been changes in the bookstore’s management?

A. Yes
B. No [If no, skip to question 40]

37. How many changes of management have there been?

A. 1
B. 2
C. 3 or more

38. How long has the bookstore been managed this way?
A. less than 5 years
B. 5-10 years
C. 11-20 years
D. More than 20 years but less than bookstore’s opening
E. Since bookstore’s opening
F. Not sure

39. What percentage of the non-student staff has left the bookstore since the last management
change?
A. Less than 5%
B. 5-9%
C. 10-20%
D. More than 20%

40. Who is the primary used textbook distributor for the college bookstore currently? [Write in
answer]

41. What would you say is the college bookstore’s primary objective?
A. Cost recovery: providing the college community with merchandise most efficiently even at a
cost
B. Profit: providing the college community with merchandise most efficiently at a profit
C. Marketing: selling merchandise that promotes the college name
D. Other: _________________

35
42. How long has this been the primary objective?
A. less than 24 months
B. 2-5 years
C. 6-10 years
D. 11-20 years
E. Since bookstore’s opening

Can the final decisions for these management decisions be made by the bookstore manager? [If
your answer is yes, circle the word “Yes.” If your answer is no, write down in the blank line
provide who is responsible (e.g., college president, district manager) or if the decision has
already been made by contract.]

43. Store hours

Yes No: _________________

44. Choice of vendors for apparel and gifts

Yes No: _________________

45. New textbook mark-up

Yes No: _________________

46. Customized publishing mark-up

Yes No: _________________

47. Used textbook mark-up

Yes No: _________________

48. Clothing mark-up

Yes No: _________________

49. Employee scheduling

Yes No: _________________

50. Employee salary and benefits

Yes No: _________________

51. Allocation of profits (to college, management, etc.)

Yes No: _________________

36
52. Trade book inventory
Yes No: _________________

53. Point-of-sales system

Yes No: _________________

54. Inventory management system

Yes No: _________________

55. Allocation of floor space to different products

Yes No: _________________

56. Retail sales or promotions

Yes No: _________________

57. Amount returned to students for used book buy-back

Yes No: _________________

58. Dates and times of used book buy-back

Yes No: _________________

59. The decision to participate in this survey

Yes No: _________________

60. The decision to release data to the NACS Annual Financial Survey of College Stores

Yes No: _________________

61. Which of the following forms of customer feedback does the bookstore use? [Circle all that
apply]
A. A “suggestion box” at the bookstore
B. An e-mail address for customer feedback
C. A website for customer feedback
D. Periodic surveys [To whom? _________________]
E. Other: _________________
F. None of the above

37
62. Which of the following college entities monitor the bookstore on behalf of the college?
A. A committee that can only recommend changes in policy and management
B. A committee that can require changes in policy and management
C. An administrator representing the college president or trustees
D. Other: _________________
E. No structure in place

63. What level of sales does the college bookstore generate before taxes per fiscal year?
A. Up to $500,000
B. From $500,000 up to $1 million
C. From $1 million up to $3 million
D. From $3 million up to $6 million
E. More than $6 million

64. In the last ten years, how often has the college bookstore run a profit?
A. Always
B. More than half the time
C. Less than half the time
D. Never [If never, skip to question 66]

65. After costs, what level of profits does the college bookstore generate on average before taxes
per fiscal year?
A. Up to $200,000
B. From $200,000 up to $250,000
C. From $250,000 up to $300,000
D. From $300,000 to $400,000
E. More than $400,000

66. What is the primary source of operating costs for the bookstore?
A. Management/cooperative costs
B. Salaries and/or wages
C. Real estate and/or utilities
D. Taxes and/or insurance
E. Other operation costs: _______________________

67. Has the bookstore expanded or built new facilities in the last 5 years?
A. Yes
B. No [If no, skip to question 69]

38
68. Who paid the most for the expanded or new facilities?
A. Institutional (college or student union)
B. Private corporation: _________________
C. Cooperative: _________________
D. Leased: _________________
E. Other: _________________

69. Where do profits go primarily?

A. Back to the bookstore [Skip to question 71]
B. To the college as a whole
C. To cooperative members [Skip to question 71]
D. To outside corporation: _______________________ [Skip to question 71]

70. Where specifically in the college do bookstore profits go?

A. General fund
B. Student services
C. Other area: _______________________

71. Does the bookstore guarantee the college a certain amount of its revenue per year?
A. Yes, just a percentage of sales [Go to question 72 and then go to conclusion]
B. Yes, just an annual minimum [Skip to question 73]
C. Yes, both a percentage of sales and an annual minimum
D. No [Go to conclusion]

72. What percentage of sales does the bookstore guarantee the college?
A. Less than 5%
B. 5-9%
C. 10-14%
D. 15-20%
E. More than 20%

73. What annual minimum does the bookstore guarantee the college?
A. Up to $100,000
B. From $100,000 up to $500,000
C. From $500,000 up to $1 million
D. From $1 million to $2 million
E. More than $2 million

Finally, would you be willing to answer some open-ended questions for about 5 more minutes?

Yes No Someone else can: ________________________________

39
 NOTES

1
Quoted in John Pulley, “Whose Bookstore Is It, Anyway?” Chronicle of Higher Education,
February 4, 2000, A41-A43.
2
John Pulley, “Whose Bookstore Is It, Anyway?” Chronicle of Higher Education, February 4,
2000, A41-A43.
3
Hoover’s Inc. reports that the private company Barnes and Noble College Bookstores Inc. is
separate from the publicly traded Barnes and Noble, Inc. The two are considered “sister”
corporations due to the fact that the Chairman of Barnes and Noble, Inc.: Leonard Riggio who
controls 23 percent of its voting power has a controlling interest in all of the voting power of
Barnes and Noble College Bookstore, Inc. and serves as its CEO. “Barnes & Noble Inc.,” in
Hoover’s Company Profile Database, http://web.lexis-nexis.com/universe.
4
Connect2One, “Campus Capitalism,” http://www.connect2one.com/archive02.html.
5
Quoted in John Pulley, “Whose Bookstore Is It, Anyway?” Chronicle of Higher Education,
February 4, 2000, A41-A43.
6
Ami Berger, “Leasing and the College Store,” College Store, March/April 2001, 52.
7
Ibid.
8
Ibid.
9
October 5, 1922 letter from George Nettleton to Bryne Hackettt, furnished by Elizabeth Daniels,
Professor Emeritus of English, Vassar College.
10
October 7, 1922 letter from Bryne Hackett to Acting President George Nettleton, furnished by
Elizabeth Daniels, Professor Emeritus of English, Vassar College.
11
Ibid.
12
October 5, 1922 letter from George Nettleton to Bryne Hackett, furnished by Elizabeth Daniels,
Professor Emeritus of English, Vassar College.
13
October 10, 1922 letter to George Nettleton from John Lindmark, owner of Choice Books,
Poughkeepsie, NY, furnished by Elizabeth Daniels, Professor Emeritus of English, Vassar
College.
14
Elizabeth Daniels, “History of Vassar College,”
http://faculty.vassar.edu/daniels/1923_1929.html#01171923-01.
15
Vassar Cooperative Bookshop Commencement News Letter, May 1931, furnished by Elizabeth
Daniels, Professor Emeritus of English, Vassar College.
16
Ibid. From 1927 to 1931, the percentage rate was 15 percent. In 1931 the rate became the
exact amount made on member’s purchases; profits made from non-members’ purchases were
put in a surplus to provide for future contingencies.
17
As laid out in “Tentative Plan for Vassar Book Store,” no author, undated, furnished by
Elizabeth Daniels, Professor Emeritus of English, Vassar College.
18
Memo by former College Store manager Claire Tooker, September 18, 2001. The College
Store carried textbooks for the Departments of Hispanic Studies, French, Latin, Greek, Chinese,
Mathematics, Biology, Chemistry, Psychology, Economics, Russian, Physics, and Classics.
The Cooperative Bookshop carried textbooks for the Departments of English, Anthropology,
Sociology, Religion, History, and Drama.
19
Ibid.
20
Letter from Marion Bacon to Vassar College President Henry Noble MacCracken, December
31, 1929, furnished by Elizabeth Daniels, Professor Emeritus of English, Vassar College;

40
 Elizabeth Daniels, “History of Vassar College,”
http://faculty.vassar.edu/daniels/buildings.html#coop.
21
Letter from Marion Bacon to Vassar College President Henry Noble MacCracken, May 16,
1930, furnished by Elizabeth Daniels, Professor Emeritus of English, Vassar College.
22
Enrollment figures furnished by Elizabeth Daniels, Professor Emeritus of English, Vassar
College.
23
Memo by former College Store manager Claire Tooker, September 18, 2001.
24
Ibid. The Cooperative Bookshop discontinued ordering for Anthropology, Sociology, and
Religion but continued to order for History, English, and Drama.
25
Ibid.
26
Ibid.
27
Ibid. Enrollment figures furnished by Elizabeth Daniels, Professor Emeritus of English, Vassar
College.
28
Among non-peer institutions, one bookstore at a major research university cited apparel with
college insignia as its primary source of sale. Not surprisingly, this bookstore also reported that
college marketing was its primary business mission.
29
Percentages do not equal 100 percent because bookstores can sell more than one kind of
merchandise.
30
Percentages do not equal 100 percent because of rounding.
31
Percentages do not equal 100 percent because bookstores can have more than one used
textbook distributor.
32
When non-peer institutions are incorporated in these figures, the percentages skew toward the
higher values so that, for instance, 14 percent of college bookstores earn more than $6 million
in pre-tax sales.
33
Percentages do not equal 100 percent because of rounding.
34
Only one college bookstore at a non-peer institution (also a liberal arts college) ran a profit less
than half the time.
35
Only one college bookstore at a non-peer institution (a major public research university)
reported pre-tax profits of over $400,000 per fiscal year.
36
These data on textbook margins are derived from only eight surveys, or slightly less than half,
from Vassar’s peer institutions and should therefore be taken with caution. The low response
on this question derives not from the unwillingness of survey respondents to discuss their
pricing policies, but rather from a improperly worded question (which asked about “mark-ups,”
a different value than “margins”) on the original survey that we administered. While we tried
to follow up with the bookstore managers who answered the improperly worded question, our
response rates in this attempt were less than desirable.
37
Percentages do not equal 100 percent because some respondents reported more than one
textbook ordering policy.
38
Percentages do not equal 100 percent because of rounding.
39
Percentages do not equal 100 percent because bookstores can have more than one mechanism
for customer feedback.
40
Our survey found only one committee that could require changes in policy and management, at
a non-peer institution.
41
Percentages do not equal 100 percent because bookstores can have more than one monitoring
entity.

41