What’s the difference between indiCo’s full service for campus bookstores and what contract management companies do?
I’ve gotten that question a lot since we launched indiCo’s new services at the 2017 Campus Market Expo (aka CAMEX). I see at least seven very important distinctions between the two, all boiling down to the value of independent store operation to higher-ed institutions.
By invitation only
indiCo responds to invitations. We don’t initiate unsolicited proposals to change the management or service models in campus stores. You won’t see indiCo using a stealthy “top-down” strategy—common with traditional leasing companies—to go straight to the administration above the store to encourage them to explore an alternative to independent operation.
If approached by a college or university administrator, indiCo strongly urges that the existing store management and staff be directly involved in the process. indiCo works with the current store management, at their request, to explore the services they’re interested in, as defined by the bookstore or auxiliary management team.
Should an institution issue an RFP to the general marketplace asking for comprehensive proposals for a third-party operator to take over management and operation of their store, then indiCo will respond in competition with the lease companies. We will present a comparative choice—one that will enable the store to remain institutionally managed and independent. If the institution selects indiCo, our team will seek to work with the existing store management and staff in a shared partnership to run the store as independent.
Your store, your way
Unlike lease companies, indiCo doesn’t dictate operational methods, technology platforms, or service providers. We understand every store is different and needs customized solutions. Under our model, the indiCo team partners with the store leadership and administration to select the variety and types of service providers to use in operating the store, including vendors that may already play a role in the store.
For example, many of indiCo’s strategic partners currently compete with each other on specific types of services, giving stores more than one choice. Does the campus store want the adoption platform from Verba, or Sidewalk Hero, or something else? Does the store want to offer VitalSource or RedShelf e-books, or another approach?
indiCo doesn’t believe in a one-size-fits-all mandate. Each store should have access to a wide range of options in technology, textbook supply chain, and other general merchandise sources and service providers.
Locking out lockups
indiCo doesn’t engage in “lockups” or “preferred status” supplier relationships. These legacy strategies simply lower competition and have handcuffed much of the college and university store industry.
Historically, campus stores have often agreed to these lockup deals with suppliers in order to obtain new retail technologies. In exchange for a new system, the store winds up stuck with less-than-competitive pricing and terms on textbook supplies and buybacks. This is not acceptable.
Corporate leasing companies also lock in supply chains for both course materials and general merchandise, limiting vendor choices for the store. They keep any price changes and reductions at the corporate level, instead of turning them back to the store. The corporate office also controls the scope of products and the price points offered by the store.
This doesn’t happen with indiCo. We have no exclusive arrangements with any suppliers and we allow the store to participate in deciding the sources, variety, pricing methodoloogy, and breadth of offerings in the store. indiCo also is willing to take a reasonable financial risk with the institution on certain products and pricing strategies, so long as the risk is equally shared between the store and indiCo.
indiCo will not sign exclusive relationships with any vendor. We need to keep the marketplace competitive and open to innovation.
No cookie-cutter clones
indiCo recognizes that there are different strategies and approaches to staffing the campus store. We don’t use a leasing cookie-cutter model of classifying stores into size categories and standard staffing plans.
In some cases, the institution may want employees to remain on its payroll. Conversely, some may prefer to shift staff to indiCo. indiCo can go in either direction if the strategy is defined and transparent, and the business model is sound.
Showing you the money
indiCo is transparent on the financial metrics and business model of the college or university store. At the end of each year, indiCo managers will sit down with the administration and share all of the store’s financials, including a “revenue walk” of the store’s performance by sales category, analysis of margins and fees, and concluding with a calculation of how the store made contributions back to its home institution and what fees are paid to indiCo.
indiCo retains only those fees necessary to cover its costs and build appropriate consortia reserves. Any net revenues from indiCo store management services of the collaborative (of all stores participating in full service) are then redistributed to the member institutions as a dividend in proportion to each institution’s contribution to the bottom line.
The contract management companies keep any unanticipated revenues and profits from store operations, and exclude many discounted products and services from commission. They don’t provide comprehensive transparent financial reports that can be fully audited.
indiCo is a true collective of participating independent, institutionally owned stores, including advisory governance participation by store managers and senior administrators. These advisory councils guide the policies and practices of the collaboration and provide feedback as to the strengths and weaknesses of the services and programs offered.
$$ stay on campus
Unlike traditional leasing companies, indiCo does not design systems and services to maximize corporate profits and then distribute these profits in large executive bonuses or dividends to private individuals or investors.
Once indiCo covers its costs and builds the appropriate financial reserves (to be used to benefit the growth of the consortium), net gains or profits from store management are returned as dividends to the participating institutions. Some is transferred to NACS to underwrite indiCo-related costs of operating the association; membership dues are not used to support indiCo.
While the major leasing companies claim to be focused on providing resources and services to benefit education, the fact is that they extract $1 billion in bonus payments and profits from the college and university store industry every five years—money that leaves higher education.
These are only a few of the many differences between indiCo and the corporate leasing operators, such as Follett and Barnes & Noble.
If you want to learn more about how your store might interact differently in partnership with indiCo if approached by a contract management company, please contact us any time.