Absolutely everything you ever wanted to know about why your textbooks cost a fortune

By David Ackerman

March 14, 2005 | Every semester is the same for the college student. First you pay tuition, you take care of housing, then student and class fees. The expenses at the beginning of the semester always hurt and just when you think you can't take anymore you go to class and your professor reminds those of you who haven't you must buy the text book. So you go to the college bookstore only to discover that you will be spending another hundred dollars or so buying a book that in your heart you know you will use maybe a handful of times. You leave the bookstore cursing it and the cheery cashier with her, "Have a good day."

Why do text books cost so much, and who is responsible for bleeding us dry at the bookstore? Surprisingly it probably isn't the bookstore itself. In fact the bookstore does more to save students money than anything else in the chain between the author and you. This may seem hard to swallow unless you consider some interesting facts about the bookstore.

The bookstore is an auxiliary to Utah State. That means it is not run with university funds it is run as a business. The upside of that is we only pay the bookstore what we pay the bookstore for the things we buy. Money from tuition and student fees does not go to the bookstore. The downside is that because it is run as a business they can't just hand over the books, they have to make a profit.

Just like any retail store the college bookstore marks up its goods. Since 1998 the mark-up on text books has remained fairly constant at about 22.5 percent. That accounts for only 4.1 percent of the total cost of the book. In comparison to other retail companies that isn't unusually high. According to the U.S. Department of Commerce the estimated annual gross margin by retailers is 25 to 49 percent. Bookstores are below the estimated average.

That being said, there are some key differences between the Bookstore and, say, Borders. For example the Bookstore is staffed by university employees and students. Payroll for these employees comes out of funds generated by the bookstore but they don't receive bonuses or commissions based on profits. If sales drop they lay people off but they don't get paid more if sales go up.

"The profits generated by the bookstore are kept and put back into the facilities to benefit students," said Bookstore Director David Hansen, "money cash doesn't go to other departments it doesn't go to student activities. Any profits we derive from students either through the areas I've mentioned or buy holding the line on price increases. The more profitable we are, the more students patronize us the easier it is for us to hold the line. Even though invoice prices may go up we don't pass that directly along as they would if you were buying groceries and gas, we can buffer that."

Hansen said that despite the common belief, the bookstore is self sustaining and doesn't borrow from the university or anywhere else. Even the $2.2 million remodel of both sides of the USU Bookstore was paid for in cash from accumulated profits over the years. Hansen said the appeal of the bookstore is value and convenience. We are dedicated to the students needs. We are the only store in town that caters specifically to the students, Hansen said.

One way the bookstore makes things more convenient is the Book-It program. Book-It is the USU Bookstore's brand of textbook reserve. Students can log onto the web before the semester starts and say what classes they are taking. The program tells them what books are required and the student chooses the books he wants to buy and those books can be picked up packaged together, or delivered all before classes begin. This program is free to students (minus delivery charges) and is a great way to save money because Book-It has first claim to used books.

The selling and buying of used books is another way that the college bookstore tries to keep things affordable. Hansen said the bookstore is not effectively communicating the value of the buy back.

"The total net cost of a textbook, that is what you pay for the book minus what you get back at buy-back, is often less than what you would spend at an online store," Hansen said.

The USU Bookstore is better than most when it comes to availability of used texts. The bookstore sells 40 percent used materials, at other universities students only are able to get as little as 14 percent used books.

So if the college bookstore is not to blame for high prices than who is, why do students seem to pay so much? Most the blame for high prices goes on the publishers. Publisher's expenses including costs to produce the book, income, marketing etc. account for 65 percent of the cost of textbooks. Half of those costs are post production or costs not associated with the editing and printing of the book or distribution, storage, employee's salaries and benefits, billing and publishers offices.

Publishers are trying to make money, Hansen said, just like a car manufacturer they only make money when a new book sells. Publisher's sales representatives contact professors and try to persuade them to use or adopt new books to increase their ability to educate students. Often times these new books are only new editions of the old books with essentially the same information plus or minus a few chapters or charts and maybe a new cover. Once a new edition comes out the value of the old book drops dramatically. It also becomes hard for bookstores to locate copies of the old book. If the Bookstore cannot get enough copies of the old book for all the class members it must use the new book. When a new text is adopted this means students will only be able to sell it back for pennies on the dollar if at all, as opposed to up to 50 percent of the sold price that the bookstore will pay if the book will be re-used. Naturally the new book will cost the students more the next term than they would pay if they were still using the old book.

University faculty don't always support the change in edition and 40 percent of faculty said that new editions are "rarely" to "never" justified.

Whether supported or not, due to the difficulty in finding the older books the new book eventually must be bought. The most a professor can effectively use a book once a new version comes out is two terms, said Susan Miller, the USU Bookstore curriculum materials manager, after that it is too hard for us to find it.

Increasingly publishers use bundling to push up prices. Bundling is the grouping of products bound by shrink-wrap. The publisher will include extras like a workbook or CD ROM. These items usually can only be used once or by one student. This prevents students from selling back the books once the shrink-wrap has been opened and from sharing books. The individual items in the bundle are rarely available separately. For the publisher, bundling means every student will have to buy a new book every semester. Though sales reps for the publisher will convince the faculty that the extras will help their students, 65 percent of faculty say they rarely or never use the additional materials.

Hansen said, if the bookstore suspects that the extra materials will go unused they will contact the professor who wants to adopt the bundle and check how much the professor thinks they will use the new materials. In some cases professors do not understand that it will cost the students so much more and they will choose a less expensive opption.

Perhaps the most disheartening reason for high prices at the bookstore is the professors themselves. Though it is not always the case, it can happen that professors tell the bookstore to list a book as required, tell their students to buy it then never refer to it in class and only test on what they do cover in class.

Miller said she would rather not go through the trouble of ordering, receiving, stocking and selling a book that is not going to be used by students. It doesn't do the student any good either to require materials and not use them and they tend to blame the bookstore.

In other cases professors will author a work and have it published then require the text for their class. When this happens it creates a conflict of interest because they will receive royalties from the sales of their own book, Hansen said.

"It removes some of the objectivity from the faculty member. Right now there is no law or university policy that says they cannot adopt a book that they are an author of. The faculty that do this on our campus are within their rights but there's no policy that addresses the ethical issue."

Cody Myers, a student, told his experience at USU. "I was required to buy my history professor's book; it was about a hundred bucks and there were other required books that were novels, those were what the exams were on and we never really used his book. It was a useless book to have."

Hansen said he would like to see departments working together, where possible, to keep a book for X number of years this will help students save money by being able order their books as soon as possible. Three weeks before the beginning of the term is ideal that's when the bookstore has the most used copies available if you wait you may have to buy new or special order and that can cost you more.

Hansen also said that the bookstore's biggest competitor is online bookstores like Amazon.com or Half.com and E-bay. Miller said the bookstore can't compete with the online yard sale because the bookstore has to buy in bulk. Sometimes students can also find textbooks available at bookstores in Logan that are less expensive than on campus.

Myers said, "I can go to any other bookstore and get it cheaper. I went down to that hole in the wall on Main and got a book for thirty bucks cheaper than they had it here." Though that is sometimes true the bookstore works with other college bookstores in Utah to buy in greater bulk and compete with chain bookstores like Barnes and Noble and Borders.

So the next time you have to spend the month's food budget on a history book and you're not happy about it, think twice before cursing the bookstore and for heaven's sake leave the poor cashier out of it.

NW
MS