The economics of textbook

4 January 2010

Andrea James has been talking about the economics of textbooks, and how the money is distributed. He reports that:

  1. Five conglomerates control 80% of textbook production.
  2. They sell their product to distributors/retailers, who in turn sell them to bookstores (on and off campus, including internet).
  3. Four wholesalers dominate textbook distribution, especially used > books.
  4. These four wholesalers operate about 13 of college bookstores. About 12 are university owned and operated, and the remaining 15% are independents.
  5. If a new book costs $100, wholesalers typically buy it back for $15 to $25 and resell it for $50.

I knew that the retailers mark-up was about 100% (that is, from $50 to $100), but I was surprised at how much the wholesaler makes (from $15 to $50, that’s over 300%. I doubt that the situation is that much different here in New Zealand.