University of Minnesota
February 17, 2009
A recent survey indicated that the average College of Liberal Arts student spends a little more than $900 per year on books and the average science student just over $1,000.
Photo: Patrick O'Leary
U Bookstore navigates options to ease textbook pain for students
By Rick Moore
Late in the afternoon of January 20, as the sun was setting on the first day of spring semester classes, the cash registers at the U Bookstore in Coffman Union were abuzz. Thirty-three tills in the textbook section were churning out transactions, and a trail of students marched with bookstore bags in hand—or with bags in each hand as counterweights—toward the exit.
Twice a year, this back-to-school shopping ritual elicits groans and complaints from students because for many, a backpack full of heavy books means a considerably lighter wallet.
"It's freaking expensive," says Young Hong, a University of Minnesota senior majoring in accounting.
A quick survey of students who were cracking open their new textbooks bore out the relative truth of that statement. Hong and two acquaintances had spent from between $400 and about $600 for the spring semester, and that followed $700 in textbook purchases for Hong last fall.
Kirsten Hellquist claimed the highest tab of the half dozen students sampled. The junior biology major blurted out the figure that was obviously at the top of her head: $960 spent on textbooks for the spring. She says she usually averages about $750 and has never had a semester under $500.
A host of factors conspires to make students unhappy about textbook prices, but one non-factor, ironically, is the refrain heard most often—that the U Bookstore is making a huge profit at their expense. In reality, the University Bookstore has one of the lowest gross margins (the difference between how much it pays publishers for books and the selling price) among its large-school peers. And it is in the middle of a string of initiatives to help ease students' pain and give them more options.
A complex equation
The cost of textbooks has been an issue for decades, according to Bob Crabb, the director of University Bookstores since 1993. He says a recent survey indicated that the average College of Liberal Arts student on the Twin Cities campus pays a little more than $900 per year on books; the average science student just over $1,000.
"A textbook costs more than a best-selling novel and people don't understand why that needs to be," says Crabb. But "textbook publishers need to spread their development and production costs over a much smaller [reader] base. And the development costs for a textbook are much higher than for a novel or general book."
"Textbooks are very expensive, and textbook publishers have a monopoly," he adds. "Once the professor has chosen the textbook, the bookstores around the country don't have any bargaining power [with the publisher]."
It may come as a surprise that college bookstores operate at a relatively small gross margin for textbooks. Crabb says that 25 percent is the norm, which compares to a margin of about 31 percent for Target (for all merchandize), and 40-45 percent for Macy's. He expects the U to operate at a gross margin of less than 20 percent for the current academic year. If that happens, it's likely to be the lowest margin of any of the 86 stores in the National Association of College Stores' Large Stores Group, Crabb says.
Trying to meet the appetite for used books
Buying used books can be a great way for students to knock off a substantial share of the price of an expensive textbook... when used books can be found. "There's only used-book prices; there's no used books," jokes student Kyung Hoon Kim.
The lack of used books for certain courses can be a common complaint among students. But providing them for students is not as easy as one might think.
According to Crabb, once textbook choices are made by faculty, the University Bookstore checks on their availability from the approximately half dozen used book wholesalers. The U also estimates how many of those titles it may be able to buy back from its own students. After calculating the availability of used books, it places the order for the new books that are necessary.
Profits from new books are no greater for the U than for used books. "It's exactly the same margin," says Crabb, adding, "We try to get absolutely as many used books as we can."
In fact, rather than having a wholesaler come in and run a used book buyback, the U Bookstore buys books directly from students and stores them in a warehouse off campus. That means additional costs for storage and the need to sell some excess titles to wholesalers down the road, but it's a risk Crabb is happy to take. "We think it's making sense financially, and it's definitely giving the students a lot more used books."
Crabb says that the model that the University is striving for, whenever possible, is for students to be able to buy a used book for 75 percent of the cost of a new book, then sell it back at the end of the semester for 50 percent of the new price. For a $100 book, the net expense for students would be $25. Faculty play an important role in this equation and need to let the Bookstore know of their next semester's book choices well before the finals week buyback period.
Another factor that hinders colleges around the country is the distaste publishers have for used books in general. If books can be recycled three or four times over, the profits for publishers and authors are diminished. Hence, publishers are coming out with new editions more frequently than they used to in an effort to quash used book sales, Crabb says.
Nonetheless, he notes that used book sales at the U are up 93 percent over the last five years, "and that's because of some very deliberate efforts we've made to go after that [used book] business."
Faculty join the cause
Some U faculty are asserting their collective bargaining power on behalf of students. For example, a group of professors agreed on five textbooks that they deemed would be acceptable in teaching a biochemistry course. They then went to publishers asking for their lowest bids for those books, and found one for $86—a savings of more than $60 for students.
Given the large number of students in certain U courses, it makes sense that publishers would go out of their way to offer a more lucrative deal. "We recommend that as a model for faculty members to use in approaching publishers," Crabb says.
Electronic books are becoming another option for some students. When e-books are offered, students take a card from the bookstore shelf to the register. On their receipts, they are given a URL and a PIN code to access a site where they can access the contents of the book. For one calculus class at the U, an e-book cost students $37, compared to $150 for the paper version.
The Bookstore is also testing the feasibility of renting textbooks, with a limited number of offerings last fall and again this spring. The rental fee for students is about one-third the cost of a new textbook, but of course they have to return it after the semester is completed.
Crabb says students seem to appreciate the option, but it might be too early to tell whether or not they'll miss not having the option to keep the books. And from the University's standpoint, it's imperative to pick textbooks that have a substantial shelf life. Says Crabb: "It probably has to be rented four times in order to get your costs back."
The bottom line is, as trends and technologies change, the Bookstore is doing its best to stay ahead of the curve-and to stay in business. "If it were just textbooks, college stores wouldn't be able to make it financially," Crabb says. That's where the other bookstore staples come into play—clothing, gifts, and trade books—that have a higher margin. "We're trying to maximize all those businesses to keep the textbook [prices] down."
While he encourages students to continue to shop around for the best deals, he hopes that the U Bookstore can continue to be the preferred one-stop shopping destination for all of a student's textbook needs.
"And it has to be at a reasonable price," he adds. "It can't be overpriced or no one will come."