Boston, MA 08/05/2014 (wallstreetpr) – One of the prominent internet companies renting textbooks and furnishing other student services, Chegg Inc (NYSE:CHGG), stated an important alliance with a distributor that will enable the company to downsize its inventory of print books. The significant strategic partnership would also allow Chegg to concentrate on its increasing digital business.
Ingram to assist Chegg
The company’s stocks surged 16cents at $6.05 in extended trading on August 4, 22014.
Chegg Inc (NYSE:CHGG) mentioned that Ingram Content Group Inc., the leading distributor of books in the world, will deliver an increasing part of the college textbooks that Chegg sells to students.
Chegg to receive commission
Chegg is generating approximately 20% commission on every sale. It will receive the commission for textbooks sold or rented via its mobile sites or webs. This strategy will permit Chegg to save $25 million over the coming six months.
Also, the Santa Clara, California-based company has planned to employ the savings in a productive way. Chegg Inc (NYSE:CHGG) will utilise its savings to concentrate on initiatives with profit margin potential and more attractive growth, according to the Chief executive of the company, Dan Rosensweig. The CEO informed Reuters in an interview in advance to the announcement.
Key features of the partnership
The chief elements of the association comprise Chegg continuing to own the customer experience, including end-user pricing, catalog, marketing, end-user pricing, customer support, as well as continuing student relationships and data. Furthermore, Chegg Inc (NYSE:CHGG) along with its brand associates will continue to offer surprise and pleasure to students with the items found inside the Chegg-branded boxes, which Ingram will utilise to meet the orders.
Ingram’s role
On the other side, Ingram will take the responsibility for the warehousing, sourcing, shipping, fulfilment and rental returns of its inventory.
Chegg’s results
In the second quarter, Chegg declared a net loss of 10 cents a share, or $8.2 million. Leaving out few items, Chegg Inc (NYSE:CHGG) reported that its earnings per share were breakeven. The revenue of the company of $64.5 million was up 15% YOY.
