Frequently Asked Questions
The bookstore regularly receives inquiries about textbook related issues. This information has been compiled from the answers provided by the Bookstore staff and the National Association of College Stores.
Why are textbook prices so high?
Textbooks are a valuable resource for students. They supplement and enhance classroom instruction, provide a common intellectual platform, offer additional references and perspectives, and are excellent review tools.
While we understand that students are concerned about the price of textbooks, the real issue is not price, but value. When textbooks are integral to a course, and faculty teach and test from them, the book is seen more as an investment and less as an unnecessary or forced purchase.
Textbook prices reflect real costs and a reasonable return on investment for authors, publishers, distributors, and the bookstore.
Then, why do students think textbook prices are too high?
The two most significant reasons are (a) sticker shock and (b) frustration when books aren't used in class in the way students expect them to be used.
Textbooks are free for most students until they reach college. If their book buying experience is limited to paying $9.95 for a paperback, having to buy three or four $40 or $50 texts is a shock. After paying a substantial tuition bill, families are often unprepared for an additional $200 to $400 textbook expense each term.
Why doesn't the use of textbooks meet student expectations?
In high school, most, if not all, of a textbook is required reading. After paying $40 or $50 for a college text, students expect the book to be used the same way, and the time spent reading it to be a factor in their grade. However, some faculty use textbooks to supplement or reinforce lecture content; students may only be as signed 50-60% (or less) of the text to read.
Don't students believe that, since the bookstore has a "captive market," they are overpricing textbooks?
Yes, they do. The fact is the bookstore makes very little profit on textbooks.
Have students changed their book buying habits?
While it varies significantly by discipline and course level, an in- creasing number of students are trying to get through classes without purchasing the required texts either from the store or from other students. Others share copies with classmates. The bookstore finds that even when class enrollment is predicted accurately, the number of textbooks the store will sell is uncertain.
What is the bookstore doing about students' concerns about prices?
Because we interact with students face-to-face, no group is more aware of students' concerns about the cost of textbooks than the bookstore staff. Most of us agree that the important issue is value, not price. However, the staff knows that it is the perception of price they must address today; changing students' perception of the value of their textbooks is a more difficult and longer process.
Making used books available is the single most significant way the bookstore can reduce students' textbook costs. We estimate that, through the sale of used books, our staff has saved college students more than one million dollars in the past ten years. This has been at significant cost, since used books are more expensive for the bookstore to buy and sell than new books. Unfortunately, our bookstore hasn't done a very gook job in promoting this fact to our customers.
Isn't the used book market a major reason for the increase in textbook prices?
Publishers rightfully argue that college bookstores initiative to expand the sale of used books has caused significant increases in the price of new textbooks. The effort to bring more used books to the market is good for students in the short term, but bad in the long term, since it causes increases in the price of both new and used texts.
However, most students (like most customers) care about how much they have to spend today, and in that case, used books seem to be a terrific value.
Do publishers and authors get any royalties from the sale of used books?
No, and this is a major point of contention in the industry.
How does the publisher decide on the cost of the book to the bookstore?
It depends on a variety of factors, including the initial cost of the book’s development; the potential size of the market; the complexity of the graphics, illustrations, and use of color; the cost of marketing the book to potential faculty users and sending out "complimentary": copies; and, increasingly, the number of ancillary materials provided with the text.
What are ancillary materials?
Ancillary materials are additional support material publishers provide to faculty, such as videos, laser discs, software or other expensive support tools. The complexity and number of ancillaries provided by publishers to instructors has contributed significantly to the rise in prices over the past two decades.
How important are faculty in the issue of textbook cost?
While faculty don't have a role in determining the retail price of a book, they are very important in other ways. For instance, the date when the bookstore receives the instructor's book request has a substantial impact on the store's opportunity to reduce the cost of books to students through the buying and selling of used copies.
What other roles do faculty play?
At every buyback, textbook buyers hear students say,"...this book was worthless, I never had to open it..." Faculty are the single most important factor in determining students' perceptions of the value of their textbooks. The more they integrate texts into courses, promote their value, and let students know the time and energy put into their selection, the more students will believe that they've made a good investment by becoming much more active in encouraging faculty to regularly refer to and test from textbooks.
How does the bookstore set the retail (selling) price to the student?
While most "trade" books are sold to stores at a list price less a discount, most major publishers sell textbooks to college stores at a "net" cost. The bookstore then applies a standard "gross profit margin" to the cost of the book to arrive at the selling price.
According to our most recent research, over 87% of college stores use a gross profit margin of 25% or less on textbooks. This is the same margin the bookstore uses on net price text. A margin of 20% is used on list priced text.
You mean the bookstore makes a 25% profit on textbooks?
No, not at all. The bookstore pays approximately 75% of the retail price of a new textbook to the publisher and uses the remaining 25% to pay for the expenses of selling it.
Expenses include freight costs; the cost of the personnel needed to collect and research faculty textbook requests, and to order, receive, price, shelve, utilities, equipment, and other items. What's left over, about 3.9%, is actually the store's before-tax profit.
How expensive can it be to return unsold books?
Various studies have determined that for every dollar of new textbooks returned to the publisher or other distributor, the book store (on average) pays .20 cents (actually 20.2%) to process and ship them. And the costs to publishers to accept return shipments, return the books to stock, and process store credits are similar. No one benefits from excessive returns, especially students, since the cost of returns indirectly influences textbook prices.
How much profit does a store make on a textbook sale?
It is very hard to separate "profit" on textbook sales from other product sales. The bookstore has tried to estimate profitability on text sales by applying a 25% gross margin on net priced textbooks achieves about a 3.9% before-tax profit. This is a small profit compared to other businesses. Communicating this fact is a difficult challenge for the bookstore.
How much profit does the publisher make?
Most publishers are publicly owned companies with shareholder expectations for a return on their investment (prepublication in- vestment in a textbook can range from the hundreds of thousands to over a million dollars).
Just because a product is being sold in an educational setting doesn’t mean that the manufacturer (or publisher) should not be able to make a fair profit on its sale. On average, textbook publishers make an after-tax profit of 7.6%, or 7.6 cents, on each dollar of textbooks sales.
Can textbooks be purchased for less money at national "chain" book stores?
Unless they are old editions being sold as "remainders," it is unusual for textbooks to be available at "regular" bookstores or superstores.
However, many books used in class are not traditional textbooks. Courses in the humanities and social sciences, for instance, often use trade books, most of which are pre-priced by the publisher. While there can be price differences between stores on these books, often the books are not really the same. For instance, there are dozens of editions of Shakespeare with different editors, illustrations, annotations, or even paper quality. There can be significant price differences between editions.
Why does the bookstore sometimes cover the publisher's pre-printed price with a higher one of their own?
Almost universally, when a bookstore reprices a book it is because that book came from the publisher with one price on the cover and a higher price on the invoice.
A publisher may have several cover prices in stock at any one time. When the books are sold to the store, they are sold at the most recent (and usually highest) price. This is a difficult customer relations proposition for the bookstore, since we are faced with either losing money or potentially creating a bad perception on the part of students.
Do contract management companies, such as Follett, Barnes & Noble and Wallaces, get lower prices on textbooks than independent college stores?
The "net" price for a new textbook is the same for every store, regardless of store ownership or the size of the order. However, that doesn't mean that there won't be a retail price difference on the same book from store to store. Competing stores may price some texts as loss leaders, or the stores' pricing policies may differ. Prices may also be lower if a store purchased inventory before a publisher's price increase took effect (this happens often).
Aren't some students saving money by buying directly from publishers?
There are thousands of publishers, and some will sell directly to the consumer at the same price as they sell to the bookstore. However, virtually every major textbook publisher has credit and business policies that act to prevent individual students from buying from them at the same prices as the bookstore, because it simply isn't cost effective for publishers to sell to individual students.
Do publishers change book editions every few years just to eliminate used books?
While business issues are clearly a factor in determining the life of an edition, primarily the average edition-life of a textbook has shortened because the exponential growth of information has necessitated a shorter revision cycle to keep books current.
Do frequent edition changes help or hurt the bookstore?
The bookstore understands the need for textbooks to be kept current. However, edition changes generally hurt the bookstore’s relationship with students. It is very difficult to explain at the buyback counter that an old edition of a textbook cannot be re- purchased by the store. In addition, there would be more used books for students, and fewer inventory problems for the bookstore, if editions didn't change as frequently.
How much do used books cost the bookstore?
Whether the book is bought from a student, or from a national used book wholesaler, most bookstores (including yours) pay 50% of the retail price for a copy of a textbook adopted for the next term. Almost all college bookstores sell used textbooks for 75% of the new price.
As a student, I don't remember ever getting 50% of the retail price for a used book.
We hear this frequently, yet the bookstore pays thousands of dollars for used books at the end of each term, a significant percentage of which are bought at 50% of the retail price. Unfortunately people tend to remember the $40 book that was sold back for $5, rather than those for which 50% was paid.
Are used books more profitable for the bookstore to sell?
The numbers may seem to make used books more profitable to sell than new ones. However, the cost of acquiring used books is much more expensive for the bookstore than simply ordering new copies from the publisher. In addition, the actual amount of money the bookstore makes is about the same since the retail price on used books is 25% less than the retail price on new books.
Please give me an example to make these numbers more understandable.
A new $40 textbook, on average, is sold to the bookstore by the publisher for $30. The same book, in used condition, would be purchased either from a student or a used book wholesaler for half of the retail price, or $20. It is then resold for $30. In both cases, after paying for the book itself, the bookstore has $10 to cover the expenses of buying and selling it.
Why does it cost more for the bookstore to buy used books?
The demand for used books significantly exceeds the supply. The bookstore spends a great deal of time and energy trying to get faculty request before exams begin because the best source for used books are students on the campus who already use those books.
In addition to the expense of creating a buyback list, and running a used book buyback on campus, the bookstore searches extensively for used books from used book companies. The bookstore may contact several of these companies four or five times during the ordering cycle looking for a particular book. Each inquiry takes time and costs money.
Another reason the cost of the used book business is higher than selling new books is that unsold books bought from students have to be sold at a loss on the used book market or donated.
How are the buyback prices determined?
If an instructor has submitted adoption information for the next term for a textbook, and the store doesn't already have enough stock; the student will receive 50% of the retail price.
What happens to books not being used on campus?
The books not reordered by an instructor, or those for which the bookstore already has excess inventory, are purchased by a representative from one of the national used book companies.
How much is paid at buyback when no instructor has ordered the book?
"Wholesale" prices are based on each individual used book company's determination of a specific book's market value. The prices they pay depend on the age, popularity, and subject matter of the book. Wholesale buyback prices range from 0-20% of the retail price for older, introductory course books, to as much as 35-40% for newer, advanced level texts.
There is a significant risk for used book companies that a textbook will change editions and render their inventory worthless. Therefore, all used book companies have people who specialize in determining the market value for used books, predicting the demand for them, and trying to anticipate when books will change editions.
How can a book a student sells to the bookstore at the "wholesale" price still end up on the shelf for sale the next term?
The bookstore stops paying half price after the buyer has purchased the needed number of copies of a title, so it is possible for a student to see used copies for sale of a title they sold back at the "wholesale" price, but it is unlikely in this case that their specific book would be on the shelf for resale.
In addition, many instructors wait to evaluate their students' success with a book until after exams, and the bookstore's buy back, is over. If an instructor decides then to readopt a text, the bookstore must place an order with the used book company, in hopes that the books bought in the store haven't been sold to another store. The bookstore will pay the wholesaler's regular price in this case, since the wholesaler has the same expenses in selling these books back to the store as with any other book.
Sometimes a store receives the instructor's request after buyback, but before the wholesale books have been shipped to the used book company, and pulls them from the shipment. While the students who sold the books did not get the best price, at least students taking the class the next term will have more used books available.
Does the bookstore make money from wholesale books?
Used book companies pay stores a small commission on these books to help cover the cost of conducting the buyback.