Niche E-Commerce in Textbooks: ClassBook CEO Tony Pfister (Part 3)

Sramana: How to schools use your tools to operate their bookstore operations?

Tony Pfister: They use our tools to select the course materials. We have warehouse inventories of books. In addition, we manage the digital distribution of course materials for schools as they move into the digital space.

Sramana: Do the schools operate the bookstores under a traditional retail model?

Tony Pfister: It will primarily mirror our traditional online bookstore business. That is a wholesale distribution model. Our digital model brings us closer to the software-as-a-service model.

Sramana: In 2002 when you restarted the company, which were some of the first schools you bought into your business model?

Tony Pfister: The education market is a very conservative market. We were never going to sell it on the cold-calling model. I knew that it would be a face-to-face model. I started to attend a lot of conferences and trade shows across the country. I was diligent about follow-up with every person we talked to. We started focusing on regions throughout the nation where there were concentrations of independent schools.

Sramana: Where are you based?

Tony Pfister: We are based in New York.

Sramana: Did you start out by pitching to the New York schools?

Tony Pfister: We actually did not. We focused on regional and national conferences. We started dealing with a lot of clients outside of New York. They key was meticulous follow-up.

Sramana: You basically just did good old-fashioned selling.

Tony Pfister: Exactly. It works! The important thing was to build relationships with the schools.

Sramana: Relationships are the key to making sales.

Tony Pfister: Our industry is particularly relationship driven. We have clients who are still with us who signed up in 2002.

Sramana: Walk me through one client and how the money flows. Who makes money, and how does the operational logistics flow?

Tony Pfister: Schools outsource their book operations to us. They pick up a lot of economies of scale as far as how adoption is done at the school. We have streamlined the entire adoption process. We are the one focal point where they can input all of their information in a manner that is organized on a teacher-by-teacher basis.

Sramana: Do all teachers have access to the system to enter their curricula?

Tony Pfister: Yes. That has been a key differentiator for us.

Sramana: Do you aggregate inbound orders and make wholesale buys?

Tony Pfister: We actually carry the inventory in our warehouse. As soon as the orders come in, we send them directly to the students. We have a one point system that takes care of inventory, and we know what is going to be taught next year at that school. That allows us to stay ahead of the curve.

When students log in to the school bookstore site, they can order all of their books from that one spot. That simplifies the entire process for the school as well. Schools don’t have to worry about ordering enough books for each student and then not having every student buy a book through their store. They just pass that order fulfillment task to us and let us deal with the process.

This segment is part 3 in the series : Niche E-Commerce in Textbooks: ClassBook CEO Tony Pfister
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