Yes

by Charles Bobbitt

Created on: September 01, 2008   Last Updated: December 20, 2008

When you see a question such as, "Does selling used textbooks hurt authors and publishers?" you should immediately become suspicious. The question is seemingly too simple and the answer too obvious.

Almost all textbooks are sold to students taking courses that require the book. Therefore, the number of textbooks sold in a semester can be considered fixed. For every used textbook sold, then, one less new textbook is sold. Since publishers and authors only make money from the selling of new books, selling used textbooks definitely hurts their revenue. To argue otherwise would be to willfully deny these simple facts.

So why all the controversy?

When confronted by questions that are easily answered, yet repeatedly asked, always stop to consider, "What is the real issue?"

In this case, the question is not simply whether authors and publishers are losing money. The issue is the soaring price of new textbooks, and the question of whether these prices are reasonable or are artificially inflated. In other words, asking if authors and publishers are being hurt by the selling of used textbooks is simply a polite way of saying, "We feel like students are getting ripped off on the price of textbooks, and we want to know where all the money is going."

To deal with this issue, we need to first get a feel for how much money is involved. According to the National Association of College Stores (NACS), the selling of new and used textbooks brought in $5.5 billion in the 2006-2007 academic year. About 70% of the revenue was from the sale of new textbooks and roughly 30% from used textbooks. Using those numbers, new textbooks brought in $3.9 billion and used textbooks, $1.6 billion.

Now, what percentage of that money went to the authors, publishers, and bookstores?

The NACS calculated the following distribution of revenue from the sale of new textbooks:

- Author: 12% ($0.46 billion)

- Publisher: 65% ($2.50 billion)

- Bookstore: 23% ($0.89 billion)

Since authors and publishers don't receive any money from the sale of used textbooks, the distribution of that revenue is:

- Author: 0%

- Publisher: 0%

- Bookstore: 100% ($1.65 billion)

Adding together the totals for both new and used textbooks, we get the following breakdown:

- Author: 8.4% ($0.46 billion)

- Publisher: 45.5% ($2.50 billion)

- Bookstore: 46.1% ($2.54 billion)

It is clear, then, that the selling of used books has a significant detrimental impact on the percentage revenue of the author and the publisher (from 12% to 8.4% and 65% to 45.5%, respectively). On the other hand, the percentage of revenue the bookstore receives more than doubles (from 23% to 46.1%).

It is important to note that these numbers are for gross revenue, and don't take into account outgoing expenses. It doesn't reflect the writer's expenses for research, the publisher's cost of printing and marketing the book, or the bookstore's costs for labor and buying back of used books.

So, in the end, who really benefits and who loses from the selling of used textbooks?

Students benefit some, because used books are cheaper (although not by much: on average $48 per book versus $53 per book for the 2006-2007 school year) and, if lucky, they can sell the books back for 5% to 50% of their original price.

Publishers lose some, but have recently found inventive ways to overcome the loss, such as bundling CD ROMs and other materials with the books, thereby increasing their revenue.

Authors lose the most, missing out on revenue and not having the same tricks available as their publishers to recoup the losses.

And without a doubt, the big winners from the selling of used textbooks are the bookstores. For, although they will try to argue the expense and risks inherent in dealing with used textbooks, any businessman will tell you that being able to sell the same item multiple times is a recipe for success.

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