Is the cost of college textbooks too high? Parents and students will say, “You bet!” Bookstore managers on the front lines facing student ire and complaints will try to mitigate costs by finding or buying back used copies and holding costs down. Authors and publishers, on the other hand, watch others benefit from the sweat, research and effort that went into the original publication of their (the authors’) life’s work and argue, “A textbook is an investment in your education. You’ll earn the money back many times over.”
College textbook costs, like most other costs, are subject to market forces of supply, demand and the ever-resent middle man (the college bookstore, wholesalers). Publishers have upfront and development costs that can run into the hundreds of thousands of dollars, and they are also faced with a phenomenon that drives up their costs and profitability: thousands of used copies of their product for which they receive nothing.
The new college student goes through a shocking experience in a first visit to the campus bookstore. In addition to thousands of dollars in tuition and course fees they have already paid, they are now faced with hundreds more in course textbooks. The “sticker shock” of paying over $75 for a paperback textbook naturally makes the student feel overcharged. Naturally, too, the student looks for the used $45 edition of the same book. Moreover, when the student sells the book back to the bookstore and receives $20-$25, that same old feeling of being “ripped off” returns.
Sticker shock and student bad feelings notwithstanding, textbooks cost big bucks to write, develop and produce. Unlike articles on Wikipedia, textbooks must stand the scrutiny of rigorous academic research and scrupulously avoid plagiarism and error. Nowadays ancillary materials – CD/DVD ROMs, workbooks, supporting web sites with tests banks, etc., also accompany textbooks and drive up production and maintenance costs that must be recouped in retail sales.
For every used textbook sold, one new version goes unordered or unsold. Used textbooks, then, have the effect of driving up the unit cost of the new version as the publisher keeps a close watch on potential new orders. Also, as indicated above, the publisher has also invested development and marketing costs in the new edition with its supporting material. A used version of the text amounts to a complete loss of the intellectual rights and virtually no residual earnings for the author or the publisher.
Bookstores also lose money on used textbooks. Their profit margin is about the same as for new textbooks (about 25%), but handling, stocking, repurchasing and scouring wholesalers for used copies make ordering new copies from the publisher far more cost effective. Students, in the short term, naturally benefit from the lower costs of used textbooks. Market forces, however, drive up not only the costs of the new text, but also their used counterparts whose cost is based on a percentage of the new retail version. Also, consider this: When the market is glutted with used copies, it promotes a shorter time between revisions. Publishers and authors claim that textbook revisions are driven by other factors, such as an exponential growth of information and discovery, which is true enough. However, the used textbook market definitely stimulates more frequent updates, for obvious reasons.
Just as used cars tend to drive down new car sales and hurt profits for new car manufacturers, used textbooks return nothing to the original publishers and authors. Textbook publishers absorb all the development and marketing costs for a textbook, which, unlike any other publication, is subject to rigorous quality and academic standards. When used books cut into their profitability, unit costs go up driving up the price, even for the used version.