I have been a successful manager at a college retailer for over 28 years.
who is this article for?
There’s a lot of consumer information here, but the article will also help bookstore professionals understand the calculation of online textbook rentals and help them be more competitive.
You are reading: Renting books on amazon
To be fair, Apex Media is not the only third-party rental provider on Amazon. There are many. however, the basic terms of their rental agreements are mostly the same, and the look and feel of their terms is universal across amazon.
kieso’s intermediate accounting book costs a bookstore $222. most bookstores sell that book for $296, which is their normal 25% markup. some bookstores that use dynamic pricing may sell it for a little less. even amazon, which sells certain books at a loss, charges upwards of $200 for a new copy.
Through its partner, Apex Media, Amazon rents this same textbook for $39.99 (at least this was the rental price on January 28, 2014). how do they rent a book that cost them $222 for $40 and make money? should you rent from them?
Understanding the math of making money from this type of rental from a business standpoint and knowing what you need to avoid paying expensive buyout fees are keys to taking advantage of these low prices and understanding the book rental market. text. those who don’t understand these things run the risk of being charged an extraordinary fee.
read the fine print
When renting textbooks from any online source, including amazon, it’s critical that you read the fine print.
- what if you return the book in poor condition?
- what if you return the book with too much highlighting or writing on it?
- what if return it by post and it never arrives?
- what if you forget to return the entire book?
Did you know that approximately 10-20% of rental customers do not return their rental textbooks on time? Rest assured, the late fees associated with late returns and non-returns take into account the prices that Amazon and Apex Media may charge for their rental textbooks. in fact, they have built into their rental model that a certain percentage of customers will not return those textbooks, and this likely influences their decision to reject some textbooks because they are overwritten or damaged.
what if you’re late?
did you read the fine print on the amazon site?
“if your book is not received postmarked on or before the expiration date, we will automatically extend your textbook rental period by 15 days and charge you for a 15-day extension, and if the textbook is not yet received postmarked on or before the extension expiration date, we will charge you the purchase price (at time of rental) less rental fees and, if applicable, extension fees already Please do not send the book back to us once the purchase price has been collected, that textbook is yours.”
what is the purchase price?
In the example above where amazon and apex media are offering to rent this $296 textbook for $39.99, did you notice the “purchase price” of $388.50? Does that seem a bit excessive?
If you are one of the 10% or 20% of students who do not return their textbooks on time, you will likely be charged an additional $20.99. if you are one of those students who forget to return the entire textbook, you will receive an additional charge of $327.52 ($388.50 – $39.99 – $20.99) as indicated in the fine print. that’s more than $100 more than the company paid for a new copy of the book.
While it is not uncommon for bookstores and rental companies to charge high fees for non-returned or late-returned rental textbooks, Apex Media and Amazon are able to include this in their rental model because they are online companies that they are not tied to any university and you rarely have to deal with clients face-to-face. when you write to complain after this amount has been charged, they will simply email you back and tell you that you have violated the terms of your rental agreement and there will be nothing you can do about it.
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There’s no way a physical company can get away with it.
can I highlight and write in my book?
What if I stand out too much in my book?
“As a courtesy to prospective customers, we ask that you limit your writing and highlighting to a minimum amount. If we determine that the book is no longer in acceptable rental condition when you return it, including due to excessive writing or highlighting, You’ll be charged the full purchase price, less any rental fees and extension fees you’ve already paid, and we’ll ship the book to you for your keeping.”
who defines what is excessive?
There is critical fine print in the gray box to the right that essentially gives amazon and apex media the right to refuse almost any rental book that is returned on time and charge the full purchase fee. While it is not clear whether there is a direct relationship between Amazon and Apex Media, assuming that Apex Media is its own company and trying to make its own profits, the purchase price application may be a critical piece of its business model.
what is known as “break” in most rental companies is used as a pro forma predictive factor in budgeting. In other words, a business factors a certain amount of unreturned rent into its budget equation. the secretive nature of the relationship between apex media and amazon means we’ll probably never know anything about this, but it’s not uncommon for a company to predict their break rate and then reject a certain number of returns as a result of their budget needs based on the factors lazy explained to the right.
Does “too much writing or highlighting” mean 10 or 20 pages? the fine print allows the company to basically reject any returned rental textbook for any writing, depending on their need to earn money at the time.
why can’t my local bookstore charge the same for this rental?
There are three main reasons why a brick-and-mortar store, or your local college bookstore, can’t compete with amazon’s rental prices: the limit on breakage fees, the limit on the number of laps for each rental title, and limits set by the university or college (if institutionally owned) or company on the amount of risk the store can accept.
turn represents the number of times a business can expect to rent a particular title. in a title like the kieso ledger used in this example, it has a publishing life of about two years. Apex Media can expect to rotate your rental six to eight times, while the conventional college bookstore can only expect three to four. this automatically means that apex media can afford to charge about half the rental price of a traditional store.
Keep in mind the high breakage fees that Apex Media charges, and that rental fee can be even lower. If for every 10 books Apex rents at $39.99 they can charge two customers $388.50 for non-return, they will make a return on their investment on the third rental. stores that have to answer to a university and deal with real customers just can’t charge the same breakage or non-return fees.
Finally, with a virtual guarantee of increased shifts and a final sale of your book at the end of your rental cycle, the risk to Apex Media is considerably lower. Institutionally owned stores are traditionally risk averse, making it almost impossible for them to offer competitive rental prices. the institution will not allow it. Corporate stores are more risk tolerant and have a wider network, so their shifts are usually higher, but even they can’t charge such high non-refund fees, so their fees will also be higher on average.
how does apex media make money and when?
Although non-returns can be as high as 20%, let’s assume the average apex non-return rate is 10%. That means that for every 10 books they sell, one doesn’t come back. 10 books cost them $2,220. they rent those 10 for $40 each, earning $400. one does not return, so the customer is charged $388.50-$40-$21, for a total of $327.50. after one shift, the company has recovered $727.50 on its $2,220 investment.
The company now has nine books left. they re-rent those nine for $40. they will have a book that will not return neither in the second rental nor in the third. for the sake of argument, we’ll say what happens here. again, they charge a customer $327.50. her total income this shift is $687.50. so far, they have raised $1415.00.
On the third rental, they have eight books left and rent all eight for $320. all eight come back and now have $1,735 in income on their investment.
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On the fourth shift (remember, they could get 2-4 more shifts), they rent eight books for $320 and have one non-returned one for $327.50. His total income on the fourth shift is $2,382.50. they made a profit!
now consider two things, apex media can get two to four more turns out of the remaining seven books and can probably sell them at profitable end of life for 25% to 50% of their original cost.
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the benefit is quite impressive.
who is to blame?
The bottom line is that it is the consumer who is to blame when a rented textbook is returned late or not returned at all. the consumer is the one who knowingly and voluntarily enters into a contract with the rental company and agrees to the return dates. when those dates are not met, the client can’t do anything.
Although the rental prices offered by Apex Media through Amazon are very attractive, there is a high price to pay for those who do not meet the terms or condition requirements. Know what you’re getting into when you rent from Apex Media through Amazon.
- amazon and apex media: watch out for apex media book rentals review 328432 Mar 03, iowa city, iowa @pimy’s daughter rented a book from apex media for a college class. all the information sent by the company for the return of the book went to his spam. they charged him $38 for rent and i
- apex_media the biggest and worst bookstore on amazon – the ebay communityhe had multiple orders with apex_media over the years, many times they seemed to have reasonable prices. every time the package ar…
- apex_media amazon booksellers reviews: apex media amazon seller book buy review
what has been your experience renting textbooks?
pdxbuys of oregon on January 5, 2016:
pay $388.50 for a total purchase? i sold my 1991 subaru legacy truck a few years ago for only $350 in los angeles – that was the best i was offered. how can a running vehicle be worth less than a single textbook? freakonomics…
universitymom on October 7, 2015:
My son has rented textbooks on occasion and has never had a problem. he simply takes reasonable care of the book and returns it on time. another great option from amazon is to rent the electronic version of the textbook when it becomes available.
allen donald (author) of colorado on March 3, 2014:
apex media and amazon offer great prices on their rental textbooks, so people who return their textbooks on time and in good condition get a great deal. however, people need to know what the consequences of violating their contract are, just like in any business.
flowerishanyway from usa. uu. on March 3, 2014:
This is even worse than when I was in school, much, much worse. thanks for writing about the topic.
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