In May, VarsityBooks and Bigwords laid off 13 and 28 employees, respectively, to trim costs. VarsityBooks handed out pink slips to 27 more employees June 29. Squeezed by the textbook market's growing competition and relatively thin margins, Varsity and Bigwords are looking for other ways to make money. Both are sticking with the college market, but they're broadening their businesses. Varsity and, to a lesser extent, Bigwords are leveraging their college marketing expertise to help other retailers get a toehold on campuses.
Marketing services enjoy comparatively fat margins.
San Francisco-based Bigwords is relying on more than marketing for additional revenue. Bigwords declined to detail how it will expand its content. The site will relaunch in the fall, and Johnson expects Bigwords to be profitable sometime next year. There's no question that there's plenty of money to be made on college campuses. Student Monitor estimates 13 percent of students purchased from an online bookseller in the spring.