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Used Book Sales Study Raises Issues for Booksellers & Publishers

Consumers are buying more used books each year, especially via online sites

Bookworms rejoice! That extensive collection of sci-fi hardcovers you’ve been hauling around since college may be worth more than you think. Used books are HOT, says a new study commissioned by the Book Industry Study Group, Inc. (BISG), and used book sales now represent 8.4% of total consumer spending on books in the U.S., with sales via online channels showing dramatic growth and popularity among the book-buying public. According to the study, used book sales topped $2.2 billion in 2004, an 11 percent increase over 2003. Not surprisingly, much of that growth can be credited to online sales and the Internet. While used sales at traditional stores rose a modest 4.6 percent, they jumped 33 percent at online merchants, to just over $600 million.

The study shows that more than 111 million used books were purchased last year, representing about one out of every 12 overall book purchases. By the end of the decade, the percentage is expected to rise to one out of 11 -- a troubling trend for authors and publishers, who receive no royalties from used buys -- when studies also show that sales for new works are essentially flat.

"I think consumers are increasingly starting to notice that they can get used books in good condition, in a timely manner," says Jeff Hayes, a director at InfoTrends, a market research firm that served as the principal analyst for the BISG study. And booksellers are taking notice, too.

The trend is helping many independent used bookstores survive, as they turn increasingly to online bookselling sites to reach a virtual customer base of millions of online shoppers. As anyone who’s shopped for used books online knows, the search engines, descriptions, and transaction functions of the sites have improved steadily over the past few years.

“This is definitely a pivotal time in the online bookselling marketplace, with implications for big and small online players, brick-and-mortar stores, the publishing industry –- and most of all for consumers,” says Kevin Donaldson of Biblio.com, the nation’s third largest online used bookseller. In other words, sites like Biblio.com make it easier for both sellers and buyers to do business.

The BISG study will likely revive the complaints of authors and publishers who say that online retailers are hurting new sales by aggressively promoting used copies. On Amazon.com and eBay, for example, used editions are often available at the same time, or even before, a new book is released.

Part of this problem is spawned by galleys and review copies that get circulated prior to a book’s official release. One need only observe the exits of bookselling conventions to see the bagloads of books being carted away, soon to be offered online. “Publishers really ought to limit what they give away,” says Donaldson. “I have seen a number of publishers giving away thousands of books at these shows, and ought to label them differently. People love to buy books. Books will sell if you stock them. I see many people at book shows that are seemingly there to add to their collections or to sell the books online within the next week. Yes, the shows and the advance copies drum up excitement about the industry, but they often have the feel of a 75% off sale at a department store, with people clamoring for books and autographs.”

Some review journals consider it standard practice to sell review copies to help cover costs. Advance galleys are often valuable to avid collectors of certain authors. Sites like Amazon now make it easy for customers who bought books legitimately to re-sell them, right alongside the new listing.

However they acquired the book, one can hardly blame someone for trying to recoup some of the money – presumably to buy more books – especially if they’ve paid full price for it and will likely never crack the cover again.

Donaldson points out two intriguing issues surrounding the rise in used book-sales online:

1) Will competition lead to better selection and pricing for the consumer, or are we already poised for a commoditization of the online used bookselling marketplace – with large corporations dominating the market?

Consumer advocates and publishing business analysts have long regarded inflated book prices part of book industry sluggishness. Maybe this will bring retail prices down to realistic levels. On the other hand, one would hate to see competition in the used book market turn it into a consolidated, warehoused commodity. According to Donaldson, online sales have helped scores of used bookstores stay in business, but that many have closed their storefronts to sell exclusively online. Like it or not, the musty old used bookshop on the street corner may be endangered.

2) What do authors and publishers stand to gain or lose from the growth of on-line sales of used books?

“Many authors,” says Donaldson, “are gratified that their books are still in circulation.” Today’s bookstores have less room for backlist titles, so the used market now fills this role. Michael Powell, owner of Powell’s Books of Portland Oregon, a powerhouse bookseller that began as a used bookstore, shelves new and used books together. Says Powell: “The combination has brought synergy way beyond what we expected. If you put all the new books in one store and all the used books in another, each wouldn't get half the total business — they drive each other."

This may surprise some, especially knowing today’s hardcovers often cost $25 and higher, and the average price of a used book purchased in 2004, according to the survey -- was just $8.12.

Maybe it’s a matter of satisfying two kinds of customers, both the bargain hunters and those who love that “new car smell.” The great thing is that people love to shop for and buy books, and they do so in many different ways. All of those ways should be enhanced and encouraged.

While consumers will undoubtedly continue to shop online for used books, consolidation and less competition could mean less selection, poorer customer service -- and certainly less of that wonderful musty book smell -- in an industry that has thrived on providing rare and hard-to-find titles at competitive prices. Here’s hoping the independent spirit of used booksellers remains true, even in cyberspace. Time will tell. In the meantime, happy virtual book hunting!

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