Used Books Become Newer Every Day,
To Many Publishers’ Dismay
Days before Bill Clinton’s My Life went on sale last month, a handful of shrewd and Internet-savvy book buyers were auctioning off their copies of this “rare” edition on eBay – and promising to ship the book the day it hit store shelves. That number jumped to over a hundred in the early hours of the release date, many of whom guaranteed autographed copies, though the book signing event was later that day or week. The “Buy It Now” prices for these signed copies ranged from $150 to $450 — an exorbitant increase from the $35 list price, or Amazon’s $21. A mere week after the autobiography was released, about 300 used copies (including audio versions) were up for sale on Abebooks, Amazon and Alibris — the top three used-book-selling sites. (Note: It’s hard to know exactly how many because the online listing categories “New” and “Like New” are rather subjective.) These sites, along with a horde of smaller online used book vendors, make up a sales channel that not only denies publishers profit and authors royalties, but wreaks havoc on publishers’ attempts to track titles’ popularity.
Welcome to the new used-book market: It’s now more of a science than a leisure time activity — both for the buyer as well as the seller. Gone are the days of squeezing through a maze of dusty used books and happening upon a 1926 first edition of Pheasants: Their Lives and Homes for the birdwatcher in your family; now you’re practically guaranteed a copy of the hottest new beach-appropriate paperback for a fraction of the list price, and you’ll find it in less than a minute with the help of your favorite shopbot. For those on the other end of the transaction, the Internet can provide hefty profits without the overhead of a traditional store.
The number of US readers who feel comfortable buying used books is surging, thanks in large part to Amazon, and its handy listing of used copies when a shopper searches for a title. Americans bought 150 million used books in 2003, or 14 % of the general trade books purchased between April and December 2003, according to Ipsos BookTrends. Online used book sales could double and reach $2 billion by 2007, Forrester Research predicts. Current studies indicate that about 5% of US household dollars spent on books goes toward used copies, but a spokesperson for Abebooks says the company, which as one of the leading online used bookseller may be in the best position to track such numbers, thinks this estimate is low. Although publishers have long been aware that used book sales over the Internet are skyrocketing and, many believe, infringing on their new book sales, they have had no concrete way to measure this, let alone combat it; so many have just brushed it off as an insurmountable problem. For example, even though the AAP has taken a very definite stance against used text book sales, there has been no visible effort to counter used trade book sales. “We have more information on used book sales affecting the new textbook market, and we don’t have any information for the trade market,” explains VP Katie Blough. “We have to convince booksellers to give us their data. The more information publishers have … the better off they are.” Given the Book Industry Study Group’s recent formation of a research committee with used book tracking high on its agenda, publishers may have some legitimate statistics in the near future. Having said that, the industry studies that have emerged in recent months show many contradictions, and emphasize how difficult this task will be.
One recent report, “A Portrait of the US Used Book Market,” published earlier this year by Book Hunter Press (www.bookhunterpress.com), deduces sales trends based on the survey responses from 827 used book dealers. It describes 2002 as the year that the Internet took charge of the used book market, surpassing book stores as the buying channel of choice. The report illustrates — perhaps unintentionally — who the publishers’ biggest online foes are in this battle for consumers’ dollars. In 2003, Abebooks easily topped the list of Internet sites purveying used books (39.2%); Amazon followed (17.3%); Alibris placed third (12.7%); eBay was fourth (9.0%); and independent dealer sites ranked fifth (8.6%). A similar hierarchy existed for the number of dealers who post their wares on the various sites: Abebooks (78.8% of dealers); Amazon (58.1%); B&N (50.7%); Alibris (44.4%); and individual dealer websites (39.8%). Many survey respondents said they post books on a number of websites for maximum visibility, according to report co-author Susan Siegel. (Note: One obvious flaw with this survey is that it doesn’t include the great number of individuals who decide to post books for sale on Amazon, or those amateur eBayers in their livingrooms.)
If You Can’t Beat ‘Em, Join ‘Em
Abebooks, which boasts an average of 20,000 book sales each day on its site, has evolved from the place only rare book collectors went to the largest used book portal on the Internet. Depending on the time of year, it’s the place people go for used textbooks (fall), classic children’s lit (winter), and light beach reading (summer). After an announcement at BEA last month, Abebooks now offers new books alongside the old, and about 10% of its daily sales are new copies, spokesperson Marci Crossan said. This move could eventually make the company a contender in the arena currently dominated by Amazon and B&N. But, more importantly, Crossan said that since the company started offering space for new books alongside the old, a few (“under 10”) U.S. publishers have shown interest in selling directly to the consumer through the site, à la Penguin. Publishers are seeing it as a way to sell backlist titles and remainders, as well as newly released books, she said. Just like Abebooks’ other 12,000-plus booksellers (spanning 48 countries), publishers are subject to a modest monthly subscription charge against an 8% commission. If you can’t beat the used book seller, then join ‘em.
Dominique Raccah, publisher and CEO of Sourcebooks, thinks the biggest problem with used sales are their encroachment on a book’s launch. Publishers need to track down the source of galleys that make it onto the Internet right around launches, she says. But, ultimately, she’d like booksellers to be a bit more cooperative. “Authors are really being ripped off. What I’d really like to see is a moratorium on the part of booksellers for six weeks from the publication date. I’d like to see booksellers give authors a chance.”
Hope on the Horizon?
In the past year and a half, BISG members’ grumbling over used books sales has reached such a din that BISG president Jeff Abraham said its board couldn’t ignore the subject any longer. Though neither Abraham nor the committee chairperson Kelly Gallagher, of Evangelical Christian Publishers Association, could hazard a guess on how long the study would take or what methodology would be used, Abraham said, “We believe we have the right participants to brainstorm the problem and come up with a good project. Everybody has anecdotal evidence to show used books’ cannibalization of new books, but we don’t have any accurate numbers.” The research committee includes members from the publishing segment (Random House, S&S), manufacturing (Banta, RR Donnelly), the retail segment (Abebooks, B&N, Powell’s, NACS), as well as market research firms Ipsos and Bookscan. What numbers would most help publishers counter the so-called cannibalization? According to Abraham, “The big question is what is the year-on-year trend? Is this growing, and if so, how quickly? And is it growing at the expense of other channels or in addition to other channels?”
Barrie Rappaport, chief analyst at Ipsos who has been tracking the book market for many years, thinks publishers should be most concerned with knowing “who the consumer is and what he’s looking for.” Why so many readers choose used copies over new is, of course, the obvious question. “There’s a variety of reasons,” Rappaport suggests. “Some of it’s price. … Particularly for those online. If you can go online and see a new book that’s selling for $30, and then right below it, you can see the same book in nearly new condition for significantly less — yes, that is very attractive to some.” But, there is some salve for publishers’ worries. Rappaport’s survey indicates that most used book buyers are committed readers who also buy new books. In April 2002, she started asking her 16,000 household survey participants — who fill out purchasing diaries for a variety of product categories — if the books they purchased were new or used. “Am I going to be matching Amazon’s numbers? Probably not.” (One concern with Ipsos’ methodology is that it may not represent the entire US book-buying population. The company’s caveat in its “2002 Consumer Research Study on Book Purchasing”: “… because of circumstances beyond our control … [there is] an under representation of the African-American and Hispanic populations.”)
Others are not so optimistic about the viability of tracking used book sales. Al Greco, professor at Fordham University Graduate School of Business Administration, likens tracking used trade books in any meaningful way to “statistical work that rivals rocket science.” He jokes that at an accurate study would “cost as much as the GNP of Bolivia.” Having studied the used textbook business in depth, Greco says the “average textbook is flipped five times.” Assessing used trade sales involves modeling similar to that used in population studies, Greco explains, adding that you would want to separate out rare and out-of-print books, since they aren’t taking sales away from publishers. He lists a number of reasons for the recent climb in used book sales: the rise of e-tailers, such as Amazon, which solicits people to resell the products they have recently purchased from the site, shopbots, and auction sites like eBay, which taught people how to bargain hunt online; the economic downswing of the last three years, which has hindered discretionary spending; and the increase in book prices, which some believe is in response to warehouse clubs discounting higher priced books.
Despite recently publishing a tome of stats, Book Hunter Press’ Siegel also thinks some numbers are impossible to get. “There is absolutely no way to compute the number of times a used book was resold,” she says, listing unknown factors like dealer-to-dealer sales and bulk library purchases. “Also, I don’t think it’s possible to determine with any degree of accuracy what percentage … is for books still in print or out of print,” the latter of which is not taking sales away from new books. A proponent of the used bookseller, Siegel can get a little defensive about booksellers’ rights, as well as the consumers’. “It’s not for me to tell them how to market books, but … it’s a fact of life that as [new] books get more expensive, people look for an alternative. It’s a changing world … Publishers are clever, and I have faith in them that they can figure out how to adapt. Anything that encourages people to read and buy books is good.”
Michael Powell of Powell’s Books, which sells new and used books, says the Internet has made used book sales more visible, but they’ve always been a part of the book marketplace. Powell’s sales are split, half used, half new; however, its inventory is two-thirds used and one-third new. In recent years, Powell’s has increasingly sold more books online (some books are listed online and stored in warehouses, not even shelved in store). “I haven’t heard publishers complain very much — and I’ve never had any direct complaints. I have heard authors complain about royalties. In fact, when publishers have visited, they’ve admired the breadth of selection we have.” In general, he has little sympathy for publishers who lament the growing sales of used books. On the other hand, he said he would cooperate if publishers were interested in tracking used sales. “It would be possible to give them an aggregate number in dollars, but not possible to do on a title-by-title or publisher basis.”
New York’s The Strand is another example of a bookstore — and some would call it a literary institution — that has benefited from online sales. Owner Nancy Bass reported the store’s used book sales grew by 5% from June 2003 to June 2004 to reach 42% of its total sales. This increase would have been greater, but the store has been under construction, deterring some sales, she says. The Strand’s expansion will require a change to its longstanding catchphrase: “8 miles of books” is now “18 miles of books.” “Having our books online has been helping us tremendously, and it didn’t involve much of an investment,” she says.
What’s a publisher to do? Textbook publishers’ response to what is now an institutionalized used book market has been to increasingly move their content online. Ebooks, anyone?