Chegg rented $213 million worth of textbooks online to students in 2014. The company recently turned that part of its business over to Ingram Content Group so it could focus on digital products.
Students will continue to be able to rent textbooks through the Chegg platform, but Ingram will be managing and shipping the physical inventory. Chegg plans to put more time, money, and effort into improving and enhancing its digital operations, which range from college admissions to internship placement.
“The rental model is where we started; the real product is what you’re seeing today,” Chegg CEO Dan Rosensweig told Fast Company. “Everything we think students want is online.”
The strategy could cost the company in the short term, since Chegg will only receive 20% on the books Ingram rents. Chegg earned $91 million last year, but projects revenues to increase to $133 million-$143 million in the next two years as more colleges and employers pay it for leads and students pay for learning materials and services.
Ingram will start taking over the physical textbook rental business for Chegg by May 1 and be running all warehousing operations by the end of the year, according to a report in Ink, Bits, & Pixels.