Online college textbook rental company Chegg is getting out of textbook ownership to stay in the textbook rental business.
Chegg, which competes with Amazon on physical textbook rentals but preceded Amazon into the rental market by several years, has cut a deal with Ingram Content Group. Ingram, a well-known book distributor, will take over responsibility for buying, warehousing and shipping the physical textbooks, with the phase-in beginning May 1 and complete by the end of 2015. Chegg will continue to market its textbook rental service, but essentially Ingram will handle all actual textbook purchases and fulfillment.
Since its early days as an online source for student textbook rentals, the Santa Clara-based Chegg has branched out into eTextbooks, homework help and career assistance for higher education students, all digital. It now brands itself as “The Student Hub.”
In a statement, Chegg CEO Dan Rosensweig said, “Students will gain the benefit of Ingram’s world-class logistical capabilities and network of warehouses which means they will get their books faster while still receiving all of the benefits of working with Chegg.”
Rosensweig added that shareholders of the public company should love the news, as it will no longer be investing capital in physical textbooks, “and we will have the flexibility on our balance sheet to accelerate our investments in the high growth, high margin digital services that enable today’s self-directed learners.”
A final agreement between Chegg and Ingram is expected by the end of this quarter.
