I was cruising around R. Kennedy’s website after he commented on my textbook pricing post, and found lots of interesting stuff. I especially liked the link to the Consumption Rules blog, where the following breakdown for textbook pricing was discussed:
- 32.3% — Publisher’s paper, printing, and editorial costs
- 15.4% — Publisher’s Marketing Costs
- 11.6% — Author Income (that’s about 2 cents per hour, I think)
- 10.9% — College Store Personnel
- 10% — Publisher’s General and Administrative Expenses
- 7% — Publisher’s Income (after tax)
- 6.8% — College Store Operations
- 4.9% — College Store Income (pre-tax)
- 1.1% — Freight Expenses
Consumption Rules says the data come from the National Association of College Stores. Of course, this only works for brand new books. Once the bookstore buys the book back from students, usually at a very reduced price, they resell at nearly new costs. This saves the bookstore all of those nasty costs that start with “publisher” or “author.” In other words, the people who produced the work in the first place only get paid the first semester or quarter the book is used.
I’m not a business person, but there is usually an economy of scale. A small printing costs more per book than a large one, hence the difference in costs between the latest Harry Potter and my textbook (well, there are all the full-color medical illustrations to pay for, too).
The used book market ensures a very small sale for the publisher, relative to the eventual number of students who actually use the book, with which they must cover those big editorial costs.
At some point, publishers and students would be better off with a product that has no resale appeal–either a one-time download e-book, or a book that doesn’t offer much incentive to the resellers.