<p>You know that the text book lobbyists have something to do with that...electronic books could put them out of business pretty quickly, and they are not going to let that happen.</p>
One reason textbooks are so expensive is publishers release new editions every three or four years, hoping to render used, older editions obsolete, said Ed Lazowska, who holds the Bill & Melinda Gates Chair in Computer Science & Engineering at UW.
<p>What kind of circular logic is that? Older versions remain attractive BECAUSE the new ones are simply too expensive. New versions are expensive because it is nothing short of a racket where authors and publishers are in deep cahoots. Professors routinely push new versions because of their OWN interest. </p>
<p>The vast majority of the textbooks do NOT need continuous revisions ... it is nothing short of blatant thievery ... and the fact that the same books are sold overseas for a lot less (to respond to market forces) illustrate that the book publishers are simply milking the cow for all it has. </p>
<p>Interestingly enough, it is more noticed in colleges because for most students and families, it is the first time they see the racket in action and the first time THEY pay the bills. The practice, however, starts in the early years of K-12, with the same bandits sharing the spoils.</p>
<p>I read an interesting story once about professors who tried to have cheaper textbooks (not as many unnecessary full color pictographs, no DVDs or CDs of the material, etc) and they had to stop because professors felt that books that were that affordable must not be good choices for their course. Weird, huh? </p>
<p>I don't think that in terms of technology or price point the Kindle is quite there yet as a textbook reader. The highlighting function is a major issue, as is the general catalog, the note taking function (good, but slow). I love my Kindle to read on. Love, love, LOVE it. But I never considered using it for homework.</p>
<p>Nice rant Xiggi but wrong on the facts. The average net after-tax profit margin for textbook publishers is 30%, 25%, 10%, 7.6%??</p>
<p>It's 7.6%. How does that compare to other businesses? </p>
<p>The average store selling textbooks makes a slim net margin of a few percent.</p>
<p>While a few textbook authors made big $$$, most do not.</p>
What kind of circular logic is that? Older versions remain attractive BECAUSE the new ones are simply too expensive. New versions are expensive because it is nothing short of a racket where authors and publishers are in deep cahoots. Professors routinely push new versions because of their OWN interest.
<p>The logic is perfect though. By publishing new editions and getting professors to require them, you can make a seemingly identical older version obsolete. Just make a few minor modifications (move some pages or chapters around, change a few numbers in math textbooks to make sure that the older textbook is impossible to use if the professor assigns practice problems out of it) and you can make money back.</p>
<p>I use my kindle for books when they're available just for the convenience of having a list of everything I've underlined easily accessible without having to write it out myself, and being able to carry multiple books without added weight. If I were a math/science person I wouldn't do that under any circumstances, but for my program it's really convenient. Most of my books don't seem to be available for kindle, though.</p>
<p>Try again, Touareg! ... you're focusing on the attempt of making the older books obsolete. The main argument of Ed Lazowska was that "One reason textbooks are so expensive is publishers release new editions every three or four years."</p>
<p>Are books expensive because they recycle them ... very often? Is it more expensive to pay an author to write an entirely new new book or edit a few pages of examples? It is more expensive to cut and paste from older version or having entirely new graphics produced? </p>
<p>College books are expensive because the industry can get away with it through its systemic collusion with the academic world. Again, the same "suffering" industry sells identical books (perhaps with fewer colors and a softer cover) from a fraction of the cost to its overseas customers. </p>
<p>The best way to render the second-hand versions obsolete would be to sell the new books at a LOWER price point. Would you buy a used book if a new one was available at a discounted price.</p>
Nice rant Xiggi but wrong on the facts. The average net after-tax profit margin for textbook publishers is 30%, 25%, 10%, 7.6%??</p>
<p>It's 7.6%. How does that compare to other businesses? </p>
<p>The average store selling textbooks makes a slim net margin of a few percent.
<p>Thank you Barrons for such authoritative source. The next time ones needs trustworthy data on industry ROI and sales, I'll make sure to point them towards their friendly bookstore operators at their local community college!</p>
<p>What a joke that FAQ page is!</p>
<p>You have something else big guy??</p>
<p>So what % of professors stand to gain financially from the textbook industry? And how much do they get?</p>
<p>15% of wholesale price seems common. So a book that wholesales at $75 gets them $11.25 per copy. Some books probably sell 50,000 units per year (intro to econ or psych) but there are several highly competitive texts in those areas. Most probably sell a few thousand/yr</p>
<p>"You know that the text book lobbyists have something to do with that...electronic books could put them out of business pretty quickly, and they are not going to let that happen."</p>
<p>Not only are the books electronic, they're free. (You have to sign up, but it's free to sign up). I would think $20 is better for them than $0...</p>
15% of wholesale price seems common. So a book that wholesales at $75 gets them $11.25 per copy.
<p>Sorry I wasn't clear. Sure the author makes money of the books, but not many professors are authors of books that require in large numbers for their own students.</p>
<p>The typical professor makes nothing out of the textbook industry, but still usually recommends a recent edition. I think its helpful if the whole class is standardized to using one edition, so there is no confusion about page number or problem numbers for assigned homework.</p>
<p>i wish there was a salution to text books like this. It would be much MUCH easier to carry one of those around then a backpack full of books.</p>
The typical professor makes nothing out of the textbook industry, but still usually recommends a recent edition. I think its helpful if the whole class is standardized to using one edition, so there is no confusion about page number or problem numbers for assigned homework.
<p>Again, this is part of the problem and not part of the solution. </p>
<p>Faculty members tend to fall for the blandishments of publishers, which include nice wine and cheese spreads at academic conferences, constant spam, and direct mail. If professors wanted both uniformity/standardization and DID have the best interest of the STUDENTS at heart, they would recommend older versions as opposed to the glossy new ones. This would make the older versions more valuable and make it less profitable to crank out new versions at such rapid pace. Again, the reason the publishers AND the authors like new versions is that the bulk of the work has been done and that they WANT new profits. When books are sold second-hand, none of the profits goes to the publishers or the original authors --as it SHOULD since they made their money at the original sale. Once a book is purchased, it belongs to its owner and that is something that does not seem to please that industry.</p>
<p>The reality is that students do not need newer and bloated versions of the same book; they need shorter and BETTER books. Except for a few classes, most of the books are barely covered in a typical trimester or semester. Just look at the second-hand books that are available at the end of terms ... most are barely scratched or marked. </p>
<p>As far as the slim margins of college bookstores, is there anyone who would object to buying a second-hand book at a 40% discount and reselling it to the store at a 60% discount? If an original book is "worth" $100, a student could buy it for 60 and resell it for 40 to the store. Profit margin for the "poor" store would be FIFTY PERCENT ($40 X 150% = $60) Indeed, cry me a river! Of course, a net cost of $20 to a student is NOT what this industry has in mind. They want their pound of flesh of this "unprofitable" academic business. A visit to a academic book fair will remove any doubts about the value of this business to the publishers AND the people they try to woo --despite Barron's POOYA 7.6% margin! </p>
<p>All in all, this is not different from the general economics of our education system. Decisions are rarely made by the ... people who foot the bill. Costs have and are increasing much, much faster than any level of inflation. One reason is that most decision makers are working out of pure self-interest and cost-savings measures are the ...enemy because they reduce the pool of money. The more one administration spends, the more can be diverted to pet projects or to outright corruption. </p>
<p>When will this escalation stop?</p>
You have something else big guy??
<p>Actually, I do, Big Barron! Regarding your statement that "The average store selling textbooks makes a slim net margin of a few percent" you may want to check these figures for 2010. Obviously, there are costs of operations and infrastructure, but the gross margins should leave plenty for positive net margins. </p>
<p>The source is the National Association of College Stores. NACS' estimate of U.S. college store sales was $10.18 billion for the 2008-09 fiscal year. </p>
<p>Departmental Gross Margins as a % of Net Sales</p>
<p>New Course Books 22.3%<br>
Custom Published Materials 25.2%<br>
Used Course Books 35.7%<br>
Trade Books 30.1%<br>
Professional Reference Books 23.0% </p>
<p>By the way, here are more profit margin numbers:
TOTAL BOOK SALES 27.1%
TOTAL DIGITAL PRODUCTS 15.8%
TOTAL APPAREL 41.4%
TOTAL GIFTS 37.1%
TOTAL GENERAL MERCHANDISE 33.3%</p>
<p>Sorry, you have no concept of all the costs of running a store. As your own numbers show the margin on textbooks is not that great and stocking, returning and all the rest have relatively high labor intensive costs attached. All those books do not put themselves on the shelves. If it were such a great business most of the independent textbook stores that once were near major schools would still be around. But nearly all are gone--as are most general independent book stores.</p>
<p>Everyone in business today is out to make a profit and I don't think a sub 10% profit is all that great. You want to start a book charity and do it all at cost go right ahead. See how long that lasts. When I was in school the UW students had the same feeling about textbook costs and decided to start their own non-profit store selling texts. It lasted just a few years a they found out working for next to nothing was not much fun and they still lost money. The also started a student run pharmacy business (over 30 years ago) and that's still around as margins on soaps, vitamins and sundries are much better than on textbooks.
So I am not impressed by your rant or your data. Ask most any prof that wrote a text and he'll tell you he made about minimum wage for all the time he spent working on it (and they get little credit for it on their CV). A few are homeruns but most are not even singles.</p>