One of the most frustrating, incomprehensible things about textbooks occurs during end-of-semester buybacks. You take a book that you bought brand new from the bookstore for $140.00, walk up to their buyback table, hand it over & wait for the offer…

“We can’t buy this book.”

“What? Why? I paid $140 just four months ago!”

“Sorry, it’s going out of edition”

If you’ve ever been a college student & sold your textbooks at the end of a semester, you’ve at least heard something comparable. It may be that the book is changing editions, that the bookstore has reached their max-allowed quantity, or that the professor isn’t using the text anymore. But regardless, the bookstore won’t buy it back & as a result, there’s an extreme distaste for selling textbooks. Everyone talks about it around campus, on Twitter & Facebook, and in blogs or news articles.

“Selling textbooks is a rip off!”

“You only get pennies on the dollar.”

“My book was worth $140 in August. Now it’s worth nothing?”

Admittedly, sharing this frustration is what led me to start FreeTextbooks. I couldn’t figure out how, in a free market system & with other buying choices, the majority of Samford University students would file into such a tiny bookstore, stand in line for hours & pay full price for their textbooks.

Problem is, this is the situation at campus bookstores across the United States. So why do bookstores continue to get so much student business? Answer: location and peace of mind. You see, most students wait until they actually attend class to buy their textbooks, then they’re stuck when their professor says, “You need your book by the next class.” That doesn’t leave you many buying choices, does it? It’s Monday & you need the textbook by Wednesday? “Oh well, I’ll have to buy it at the bookstore.”

Back on topic – why is a book purchased four months ago worth practically nothing?

Because publishers frequently issue new, updated (often sparingly) editions. Why? To combat the used textbook market. Think about it – if a new Human Anatomy textbook is published in January 2010 and is adopted by 500 professors around the U.S. with an average class size of 50, the publisher will sell 25,000 copies. By August 2010, many of those 25,000 books are on the market as used, cheaper copies, which means the publisher may only sell 10,000 new copies. By January 2011, there are about 35,000 used copies floating around, causing publisher sales of new books to fall further. This repeats for the life of the book & publisher sales continue to decline each semester. So, in order to sell more books, the publisher puts out a new edition & makes sure those 500 classes adopt the new one. It’s a constant game of cat-and-mouse.

That tells you why books go out of edition, but it only leads us to the most important part. If you purchase a book for $140 and it’s worth nothing four months later, it’s mostly your fault.

What in the…? Are you serious?

Unfortunately, yes. Because that $140 book you bought at the bookstore was available elsewhere for MUCH less. How can you be sure? If it’s not worth anything, then it’s going (or already is) out of edition. If it’s going out of edition, it’s been in print for at least three semesters. If it’s been in print that long, there are plenty of used copies available all over the internet. How much are they? A fraction of what the bookstore charges.

Here’s an example:

Mario Triola’s Elementary Statistics updated to an 11th edition just after the start of the August 2009 semester. For many colleges, the 10th was required for fall classes, as the 11th wasn’t in full distribution yet. Your bookstore’s new price was $149, and it’s used price was $99. But the market for the 10th edition was sinking in anticipation of the upcoming 11th edition, which means it’s real value was closer to $35-40. In August, FreeTextbooks sold the 10th edition for $33. At time of writing, the 10th edition had a used marketplace price of $11.79, but if the 10th edition is still required this January, your bookstore will still be selling it for $149 and/or $99. Why? Because bookstores adhere to strict pricing strategies no matter what the market conditions are (see previous blog post, How Your Campus Bookstore Makes Money).

We anticipate getting a lot of questions about how books are valued during buybacks this year, so I hope this helps answer some of the most common questions. Some of our angriest customers are those that purchased books at their bookstore, then get furious when that expensive book is only worth $8 or so at FreeTextbooks. Well, $8 > $0 & our price was a lot less to begin with. Since our prices are set by the entire used market, you always get the “best-case-scenario” for buying & selling books.

In closing, we know it’s frustrating. Very frustrating. But we’re here & trying to help by selling for less and buying for more. Plus, tell a few friends and get $5 per referred buyback. There’s an easy way to boost your total…

Beat your bookstore. Use FreeTextbooks.

________

Coming up next, we’ll revisit how books are valued, what drives buyback values, and most importantly, how FreeTextbooks beats your bookstore & other online buyback sites.

Questions or comments? Let us know below!

Here’s a transcript of a recent media interview that offers offer a close look into who we are & what we’re working to become.

1.      What made you decide to start FreeTextbooks.com?

Buying & selling textbooks was a common topic of frustration during my years at Samford. I was certain the situation was similar at other campuses, but felt that Samford was more pronounced due to a lack of competition. As you know, there’s one tiny bookstore and every semester, students pile in, find their books, wait in line, and over-pay. So, during my last semester there, I ordered books for a few friends, added a little profit, and sold them. It was pretty obvious I’d found a niche worth pursuing – selling textbooks to students who want to save $100 or so on their order with the convenience of delivery.

Four semesters later, we’ve added other campuses & although we now ship books (only Samford still has campus delivery), we strive to make the book-buying process as easy & cheap as possible.

2.      What were the most difficult challenges you faced while forming your business?

Early on – it was getting the book information for each course. Our first website (SamfordBooks.com) was thrown together in about two weeks & therefore, extremely primitive. Students logged on, entered their schedule & sections in a standard PHP form, which was emailed to us. We emailed individual professors to get book information, researched books & prices, compiled a manual quote, emailed it back, waited for approval, then arranged a delivery time. It was very laborious and We’ve come a long way since then in terms of site capabilities, but we still have lots of site edits and improvements to make. Nowadays, the biggest challenges are staying current with tax filings and managing inventory.

3.      Could you please describe your typical workday for me?

I try to stay involved in every aspect as we’re still a very small, early-stage business. If it’s busy season (Aug-Sept, Dec-Jan, May), I get to our office around 7:00 a.m. and start answering the customer emails that came in while I was sleeping. Once caught up, I may fill/pack orders, scan in new inventory, check the previous day’s sales figures, find & buy books based on inventory levels, and answer more email. This may continue until 1:00 or 2:00 a.m. during our busiest times. In the slower months, most of my time is spent on directing/managing site development, customer follow-up, and a few meetings/conferences/travel.

4.      How many employees do you have?  How many are full-time and how many part-time?

We have about 5-6 employees. Three are full-time employees, including myself, with one being remote. So, most days, there are only two of us in the office, though we try to bring in some part-time help during book rush to help fill & pack orders. The others are used regularly, but not necessarily full-time for design work, site help as needed, etc. Our team is spread out across the world – two in Birmingham, one in Eastern Europe, three in India, and one in Ohio.

5.      Who manages the work schedule for employees?  How are scheduling conflicts resolved?

With just one other person regularly in the Birmingham office, there aren’t many scheduling conflicts. We each know that every waking moment is needed during busy season, so neither of us request or expect to be off. During the slow months, we are much more relaxed in scheduling. Vacation time is requested, though a day off here and there is easy to come by.

6.      Who are your main competitors?

We have a lot of competitors. There are over 14 million U.S. college students that require textbooks, and many different vendors are fighting for their business, both online & offline. Each on-campus bookstore is a competitor, just as online vendors and marketplace sites are. There are a few online companies we respect and watch closely as major contributers to our industry – Amazon, Half.com, BetterWorld.com, & Chegg.com. It’s not too hard to beat campus bookstore prices, but once you step online, price competition is fierce.

7.      How are your prices established?

We have a tiered pricing strategy, depending on what’s in stock at any given moment & from where it was purchased. For example, if you’re looking at a Human Anatomy text and there’s a copy in our inventory, that’ll be our lowest fair-market price. If we don’t have it in stock, we automate a script to check availability through one of our wholesale used book channels. If it’s available there, you’ll see a different (and higher) price. If it’s sold out of both our inventory & each wholesale channel, we compare prices from other online merchants/wholesalers and shift the price to reflect theirs, plus a small markup to cover card processing fees and operating costs. Coincidentally, as a book’s price increases, our profit margin decreases. A lower price means we have it in stock, which means our profit is higher than having to source from an third-party merchant.

8.      How many vendors do you order from, and how often do you conduct inventory?

Our biggest and best vendor is students. Secondarily, there are 5-6 channels we check for availability if we don’t have a book in stock. Inventory is conducted daily, really. Every book is processed & scanned into our inventory application when it arrives, then scanned out when it’s sold. So at any point, we can consult our application to check inventory levels, sales totals, etc.

9.      Do you advertise?  If so how and through what media?

Our primary form of marketing is through student representatives at many of our campuses. Reps are offered sales experience, tracking, and quarterly summaries, as well as commission-based pay. They are charged with networking, posting flyers, and helping build buzz around campus. Once a school gains traction this way, we are able to invest more into more traditional methods, such as campus newspaper ads. We also utilize quite a bit of direct email marketing.

10.  What part of your job do you find the most challenging? Most enjoyable?

The most challenging part is staying focused on the day-to-day duties, such as email, project management, order fulfillment, and operational responsibilities (filing/paying taxes, bills, licenses, etc). The most enjoyable part is the creativity – developing new ideas and direction for the company.

11.  What developments on the horizon could affect future opportunities for your business?

We’re very interested in offering a digital textbook option through our site and would like to offer a reader device alongside e-books. So, for the future, we’re exploring digital books, open-source books, note sharing, textbook rentals, textbook auctions, and more. There’s a lot to consider moving forward, and we’re trying to weigh each option and build a stronger nationwide customer base. For us, I think that means offering more options to appeal to different types of students.

_____________________

FreeTextbooks.com is an online textbook buyer and seller with a real-world presence at the University of Alabama, Samford University, the University of Alabama-Birmingham, Auburn University, Birmingham-Southern College, Union University, and UT-Chattanooga. Providing substantial savings over a campus bookstore, FreeTextbooks.com offers cheaper prices, a higher buyback, the convenience of searching by course, cashback on referred orders, and free shipping or campus delivery. FreeTextbooks.com is also a social venture, helping to meet the underprivileged’s most basic needs – food, clean water, clothing, education, and health.

It seems that all college students, current or former, have been angered at the cost of their college textbooks. According to the U.S. PIRG, textbook prices have increased at four times the rate of inflation since 1994 and now cost students an average of $900 per year. That’s as much as 20% of tuition at an average four-year institution and 50% of tuition at a community college. While textbooks are a necessary cost for your higher education, most students are left wondering why they cost so much. Adding to that frustration is the simple fact that you, as a student, have no say in the matter – a professor assigns a book and you’re required to purchase it. So, is it the professor’s fault for assigning an expensive book? Or the publisher’s for making it so expensive? What about the bookstore’s for charging so much? Surely they’re making some crazy profits, right? Each of these is an article by itself so for now, let’s talk about how a college bookstore gets their books and calculates their prices.

Getting the Books

Don’t you wonder why your bookstore only has a few used copies of a book when there are countless available online? Here’s why – once professors notify their bookstore which book(s) they’ll use in their course, the bookstore places a bulk used book order with their used book wholesaler. One of four big-time wholesalers can control a bookstore’s operations & distribution: Nebraska Book, Missouri Book, Follett, and Barnes & Noble. Typically, a campus bookstore will sign a multi-year contract with one of these companies. Once bound, the bookstore will request the desired number of books based on class enrollment. The problem arises consistently, as every company only has a set number of used copies available.

Here’s an example: let’s say your bookstore needs 50 copies of Psychology, 2^nd edition by Ciccarelli, ISBN 0136004288. Let’s assume they’ve contracted with Missouri Book Service to provide their used books and that MBS has 600 copies of this book. If MBS has contracts with 500 bookstores around the U.S. and 60 of those request 50 used copies of Psychology, what happens? Every bookstore can’t get 50 because there aren’t enough to go around. So, your bookstore might get 10 when they need 50. Where do they get the other 40? Brand new from the publisher.

So, on the shelves, they have 10 used copies and 40 new copies, priced at $91.10 and $137.00, respectively. Better hope you’re one of the first ten.

Pricing the Books

Once a campus bookstore builds their inventory for the coming semester, they adhere to standard pricing guidelines that are practiced in virtually every campus bookstore.

Here’s the big secret – campus bookstores make more on the sale of a used book than a new book.  Why? Because new books have a standard mark-up of 20-25% whereas used books have a standard mark-up of 33%.

Let’s look again at Psychology, 2^nd edition by Ciccarelli, ISBN 0136004288.

New book

Cost to the bookstore, sold by publisher: $102.75 – 109.60.

Cost to student: $137.00

Used book

Cost to the bookstore, sold by used wholesaler: $68.50

Cost to student: $91.10

So how is Free Textbooks able to consistently beat the bookstore, selling books at 30-90% less? Because we build inventory from a variety of sources – wholesaler accounts, bulk resellers, marketplace sellers, and student buybacks. Doing so allows us to get any quantity of used books then pass these on to students.

Hope that helps!

Questions or comments? Post your thoughts below… 

What is Free Textbooks? Founded in January 2009, FreeTextbooks.com is an online textbook buyer and seller with a real-world presence at the University of Alabama, Samford University, the University of Alabama-Huntsville, Auburn University, and Troy University. We sell for less, buy for more, and offer a unique cash back program (so you can earn free books).  FreeTextbooks.com is also a social venture, helping to meet the underprivileged’s most basic needs – food, clean water, clothing, education, and health.

Most students sell back their textbooks at the end of the semester. Too often, they don’t take time to consider their options and truly find out which method pays the most or is fastest and most convenient. Let’s briefly discuss the often-overlooked differences between campus buybacks, online buyback services, and marketplace websites like Amazon or Half.

Put plainly, the textbook industry is stacked against students. Publishing companies battle used book companies in a constant game of cat-and-mouse, and this fight affects buyback prices. Publishers’ frequent new editions combat the used book market, and knock the resale value of old editions almost to zero. Campus bookstores buyback prices are set by these used book wholesalers, and a bookstore’s offer is based on inventory levels at these mega-corporations.

So essentially, buyback prices are increased or decreased for these reasons:

1. If and when a new edition is scheduled to be published;
2. The volume of a title in print as there are more/less copies for sale nationally; and
3. The number of campuses that will use the book the following semester.

If students are put off by these stipulations, know that they affect prices at online marketplaces like Amazon or Half too. These marketplace sites may look attractive, as the going price looks to be more than any buyback offer. But be careful, many students overlook the ins-and-outs of selling your books here.

Let’s take an example - Sociology, 12^th edition, by John Macionis. Current at time of writing, the lowest marketplace price is $64.99. Most students want their book to sell first, so let’s say you decide to list yours at $63.00. Now what?

Here’s what happens:

1. Wait for your book to sell. It could be one day or six months. You never know.
2. Your book finally sells for $63.00 and the site adds up to $7 to cover expedited shipping. Total = $70.00.
3. The site takes up to 22% in commission, leaving you with $54.60.
4. Let’s say the buyer is in Seattle. You drive to the post office.
5. You pay for postage out of pocket, often purchasing packaging or tape too. Sociology, which weighs around 5 lbs. with packaging, can cost $13.95 – $17.15 for USPS Priority Mail from Birmingham, AL to Seattle, WA. Check it here.
6. You wait 2-4 weeks for your $53.82 to be disbursed to your bank account.
7. Your NET amount paid, sold price minus shipping minus commission, is $37.45 – $40.65.

Compare that to a current (at time of writing) buyback offer from FreeTextbooks.com of $48.00. No commission. Add to that prepaid shipping, a referral system (get $5 for every friend you refer), price matching, and same-day payment, and there is no better offer.

Questions or comments? Post your thoughts below & start the discussion.

What is FreeTextbooks? Founded in January 2009, FreeTextbooks.com is an online textbook buyer and seller with a growing nationwide online clientele and a real-world presence at the University of Alabama, Samford University, the University of Alabama-Huntsville, Auburn University, and Troy University. We sell for less, buy for more, and offer a unique cash back program (so you can earn free books). In addition, FreeTextbooks.com is a social venture, helping to meet the underprivileged’s most basic needs – food, clean water, clothing, education, and health. In the past four months, we’ve provided 850 meals to Birmingham’s Jimmie Hale Mission.