Monday, January 10, 2005

Buying Textbooks On-Line

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I have always known that textbooks were expensive but, except for my years as a graduate student, I have never had to buy my own textbooks. In the public grade school and high schools that I attended as a child the schools provided our textbooks for a small rental fee of about five dollars per year. As an undergraduate I attended Wisconsin State University at Superior (now University of Wisconsin-Superior) a relatively small public liberal arts college which, at that time, also had a rental system where we paid a rental fee of about $25 per semester for our books. As long as we returned our books in good condition at the end of the term there were no extra charges for books.

In graduate school at the University of Wisconsin -Milwaukee I did have to buy my own books. As a part-time student taking one or two courses per semester I found that my textbook cost were about equal to my in state tuition costs.

Now, as the father of a Pima Community College student I am very much aware of costs of the textbooks needed by my daughter.

Fortunately, a student in one of my spring 2004 classes showed me how to drastically reduce my daughter's textbook expenses. On the first evening of class I showed the students the text and told them where they could find it in the bookstore. A couple of students said that the bookstore at one campus was out of the books and another stated that the book cost $135 new and $95 used at the bookstore. At this point a young woman raised her hand and said that she had gone to eBay and purchased the book new and her total cost, including two day shipping, came to about $55.

So, this past fall I made it a point to go on line for my daughter's books. The Pima College bookstore (the URL is www.pima.bkstr.com)has an on-line ordering system that works as follows – you go on to the site, enter your classes, click on the books you want to order on-line, pay by credit card and pick up your books at the campus bookstore of your choice . This on-line service offers a convenience but no break on price. To save money I now have my daughter visit the bookstore, note the title, author, edition and ISBN number of each required text, and then I do an on-line search for the vendor with the lowest price.

Where do you go to find textbooks on-line? One way is to go to Google, type textbooks and hit the search button – you will come up with thousands of places selling new and used textbooks (you can also look at the top of this page as Google's search engine has probably read this page and placed ads for textbook companies in the ad bar). In addition to sites selling books, I have seen sites that will search, at no cost to you, sales sites to find the lowest prices for you. When you get to a site selling books simply enter the book's ISBN number in the search box and it will bring up all of the offerings for the exact book you need (ISBN stands for International Standards Book Number and is an internationally recoginzed unique identifier for each title in print – each edition of each book has its own unique ten – and soon to be 13 – digit number). If you do not have an ISBN number for the book you can search by title and/or author but be careful to get the same edition as required for the class.

Last semester I searched and purchased from a number of different sites with good results. This semester I spent less time and limited my search to two sites Half.Com and Amazon.com. Half.Com is a division of eBay and any searches on that site also include books on the eBay part of the site (NOTE: in the interest of full disclosure, I do sell some books, including some economics textbooks, on Half.Com and eBay, however, I do not have any for sale that are required for any of my courses). I searched each book on both sites and purchased the one that best suited my needs with the main criteria being price but I also considered factors like the seller's location, seller's reputation (both Amazon and Half.Com/eBay have customer ratings and comments for each seller) and the condition of the book. When you decide which book to purchase click on the "buy" button and proceed to the checkout. At this point if you are not already registered you have to register with the site and give them your credit card information. After the purchase you can go back and remove your credit card information or leave it in to expedite your next purchase. Because I have never had problems with either of these two sites, I often leave my credit card information on file unless I don't plan to buy again for a while. On other sites I am not that familiar with, I always remove my credit card information immediately after the sale but keep a record of my username and password for future reference. This semester I estimated that my daughter's books, if purchased new from the bookstore, would have cost me about $500 or more. With shipping, I ended up paying about $180 for books for five classes.

Why the big savings? Competition. As with many other products and services, the Internet has created a huge, world-wide, textbook market with numerous buyers and sellers. This is in contrast to the off-line market in which each college bookstore has a near monopoly on the local textbook market. The vast majority of textbook buyers are students attending the college where the bookstore is located and about the only place they can purchase the required texts are from the bookstore. Competition does exist between publishers as they compete to get professors to use their textbooks but this is very limited.* Under this system it is often difficult to reduce costs through economies of scale since the bookstore has to stock rather limited quantities of different books for numerous classes and once the registered students have purchased their books it is very difficult to sell the remainder by discounting the price since there is no one to purchase them and this involves extra storage costs (if they save the extra for the next semester) or shipping costs if they ship them back to the publisher. There is also some competition from used books as students sell their books to those taking the class the next semester – companies try minimize this by frequently updating the books and trying to get professors to use the latest edition but this frequent updating also adds to costs. As in any market of this nature, these higher costs are passed on to the buyers. Layered on top of this are the economic profits that the publishers and bookstores are able to obtain as a result of their near monopoly position.

The Internet, on the other hand, is not limited by the choices of individual professors. If a professor at one college decides to change the textbook for next semester, students in the current semester can now sell their used books to a student at another college. Meanwhile, students taking the class with the new book next semester are not limited to purchasing that book new from the bookstore as in the past but can go on-line and buy it used from somewhere else in the world. Similarly, when bookstores have a surplus of new books at the end of the semester they can cut the price significantly and sell them to enterprising students, staff or resale companies which can now resell them worldwide. Numerous opportunities now exist for arbitrage as college bookstores in certain areas have surplus stocks of books with zero demand due to the college changing texts while the books may be in great demand at other colleges where that particular book and edition are still in use. With a small investment, entrepreneurs can now buy these books at bargain prices and sell them at a higher price (but still considerably lower than those offered by the publishers) elsewhere with minimal transaction costs.


*NOTE: It is interesting to note that the Internet is changing this as well – professors used to be able to get textbooks for free by simply requesting them from the publisher. Publishers also used to send free copies of their books to professors unsolicited. Even I, as a part-time instructor, used to receive occasional unsolicited books from publishers for free. Now days professors can obtain copies of books and publishers still market extensively to professors but books, solicited and unsolicited, usually come with an invoice and a note to review the book and either return it or pay for it within thirty days.

4 comments:

Anonymous said...

Hey Chuck,
It is a great article!

Vadim

Anonymous said...

Hey Chuck,
It is a very good article.

Vadim

Anonymous said...

Hey Chuck,
It is a great article!

Vadim

Anonymous said...

Hey Chuck,
A great article.

Vadim

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