Michael on August 28th, 2009
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Although I graduated from college well before David from Money Under 30 began his work as a college textbook salesman, I know first-hand of the pain he details in Confessions of a Textbook Salesman, a highlight of this week’s Carnival of Personal Finance, hosted by Adam of Your Money Relationship.  (Adam was kind enough to list my post Bank Fees and Billing Errors as one of his editor’s picks – thanks Adam!)

The former textbook salesman tells of lavish parties and the wining and dining of professors; all in the spirit of getting the publisher’s book adopted as the required textbook for the  next term.

You:  Where does all this money come from?

From the students, of course.

You: Ugh. More debt.

Indeed, student loans make this all possible, and you get to pay them back.  Now don’t get me wrong – I love capitalism and I don’t see anything illegal about what the publishers are doing (from bundling of class notes to the rapid-fire creation of marginally different new editions, both of which make it far more difficult for students to get a “used” version of a textbook.). Heck, such practices are arguably not even immoral.

You: But?

But they sure are greedy.  And it is, I believe, short-sighted.  For, as I commented on David’s post,

Where there is too much greed (and I believe there is in the textbook publishing world), the economics of the alternatives, by definition, become more attractive. As such, by playing these games, the textbook publishers will accelerate the speed at which competing sources of information (which is what a textbook is), replace it.

Would you rather sell 10 books at $100 a pop (while 40 people find a way to get by without or find a used book), or sell 50 copies new, at $25 each?

As a publisher and an author, I know the answer to that question for me.

Your thoughts?

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2 Comments to “Are textbook sellers greedy?”

  1. Michael, do you know what the publisher’s take is of each new book? The only reason I could think that the publishing industry gets a hefty percentage of each book and wants to reduce its marketing expenses, so they artificially keep supply low to keep prices high. Out of all industries, I would think publishing would want volume to lower shipping rates and material costs. I constantly purchased used books even though I hated it (I wanted to annotate my own books), and I would have easily bought new books if they were close to the same price as my used books.

  2. Michael says:

    @Dallon: I don’t know for sure. However, I found this article which suggests an after-tax profit of 7.6%. It’s not a particularly meaningful number however, as we’d really want to know its gross margin. Clearly the lower number of units sold means the publisher must charge more per book to recoup development costs. But aren’t they sowing the seeds of their own destruction? As you say, you’d have gladly paid more for a new book if its price were close. You’re not shopping completely by price, but it has to be a factor.

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