UC Davis is partnering with Amazon to start a co-branded website called http://ucdavis.amazon.com where students can order college materials. The university will earn at least $1.25 million from the deal, but it has the opportunity to earn even more from commission if sales increase.
The two entities signed a five-year deal last October, under which Amazon will pay the university between 0.5 and 2.25 percent of gross sales. The deal also allows Amazon to install package lockers and retail counters on campus rent-free.
The university is allocating approximately $60,000 per year of what is earned from the program to fund part of UC Davis’ We Are Aggie Pride Program, which helps students pay for textbooks based on their financial need. UC Davis will also use some of the profits to help defray the operating costs of its student union in order to avoid increasing student fees.
Amazon has also partnered with other universities, such as Purdue University and the University of Massachusetts, Amherst, which Amazon’s Director of Student Programs Ripley MacDonald hopes will help his company draw in the millennial market.
“This is obviously a customer set that interests us,” MacDonald told the Sacramento Bee. “We’d like to expose them to Amazon and have them as lifelong customers.”
UC Davis Stores Director Jason Lorgan, however, clarified to the UCSD Guardian that UC Davis’ deal is significantly different from ones at other universities because students can only order textbooks online and retrieve them from an Amazon on-campus pickup location.
“In their programs, Amazon takes over as the exclusive and official seller of textbooks on their campus,” Lorgan said. “At UC Davis, the UC Davis Bookstore remains the official campus seller of textbooks that has books in stock on campus to sell.”
Lorgan also stated that both the campus bookstore and Amazon will continue to set their own prices, allowing students to choose where they buy their materials from.
“Our campus websites show the UC Davis Bookstore prices along with the prices from about a half dozen other textbook sellers, including Amazon,” Lorgan said. “Our mission is to help students find the lowest price on their course materials regardless of the seller.”
MacDonald told the Guardian that Amazon also aims to help UC Davis accomplish its mission.
“This collaboration with UC Davis will help make getting everything students need for life on campus, especially textbooks, more affordable and convenient,” MacDonald said.
According to the Sacramento Bee, since the fiscal year 2010–11, sales at the UC Davis Bookstore have dropped from $22.9 million to $19.6 million in 2013–14.
Similarly, UCSD’s Director of Marketing and Communications Laura Margoni disclosed to the Guardian that the UCSD Bookstore has seen a 25-percent drop in sales over the last five years, while the costs to provide such services have continued to increase. As a result, UCSD is also reviewing other options, including partnering with Amazon.
“There are many opportunities to serve the campus community, and we see this as an exciting time for change,” Margoni said.
Margoni also revealed that the university is rethinking its approach to the “bookstore” concept.
“We envision the store becoming more of a destination value rather simply a place to acquire textbooks,” Margoni said. “This may necessitate a name change in the future to better reflect the services the campus store will provide.”
UC Davis announced the launch of a trial of the program, which was the first of its kind, in a press release on Nov. 22, 2013. The university received $250,000 from the trial.
According to the press release, Lorgan intends for the site to complement UC Davis’ existing retail operation by providing items that it is unable to offer and generating significant revenue for the university without harming in-store sales.
He also sees this collaboration as a means to keep UC Davis Stores independently run, nonprofit, student-serving and self-sustaining.
“What is good for our students will be good for us,” Lorgan said. “That core principle is one we need to always consider when deciding on our future courses of action.”