Another student’s treasure: Why to buy used textbooks

With each new semester, students go textbook shopping — a fiscally painful experience that tends to start the year off on a sour note.

A report this year by the U.S. Public Interest Research Group Education Fund found that students spend, on average, $1,200 per year on textbooks and school supplies — this equates to just more than 7 percent of the  in-state tuition rate for Pitt students.

Current prices are the result of an 82 percent rise in the price of textbooks over the last decade, according to the research group’s report. 

So, what is a Pitt student to do?

Well, to start, ditch the new textbooks and buy used. While the newest editions of textbooks are often sold at, or near, the price recommended by publishing houses, it’s easy to find used books with much cheaper price tags at sites like Better World Books, Biblio and Valorebooks.

But the student demand for the newer books still remains, even though publishers continue to keep their price higher than the used versions. 

Consumers seem to lack the knowledge, time and energy needed to change this trend, but publishers have also effectively distorted the secondary markets that exist for used books. The formation of such markets occurs for most durable goods, like used vs. new cars.

For any firm selling goods in a primary market, they must keep customers coming back for their product to stay in business. So, in the same way that car manufacturers might release new vehicle models with enhanced features, textbook publishers will release new editions of textbooks, with updated content to include developments in the field. Also, most professors using a particular textbook require their students to use the most recent edition. 

Because of the secondary market, publishers are incentivized to produce newer editions with minimal changes from the previous work. This swiftly reduces the secondary market for their particular textbook, allowing them to charge higher prices.

But, that doesn’t mean students must buy the newest edition. If the required text is simply a reference guide for the class, and they won’t pull homework problems from it, newer editions are usually unnecessary — unless there happened to be some drastic changes. So, just because used books are cheaper, they don’t offer lower quality material. 

Additionally, the international editions of textbooks are widely available online, which almost always contain content identical to the U.S. editions at a reduced price.

Textbooks sold abroad are “priced to market.” That is, since the demand for textbooks is significantly reduced outside of the U.S. and European market, they are sold in foreign areas at a price much lower than the same book sold to western students, even though the content (and language) of the texts are exactly the same.

Unfortunately for publishers, such a pricing strategy leaves textbooks open to what economists call arbitrage. In this case, market participants are motivated to buy textbooks internationally at the reduced prices, then sell these textbooks in the U.S. at a higher price — still much lower than the publisher’s price — for a profit. Indeed, any cursory online search shows that this is exactly what happens.

Of course, the sophomore who has recently purchased his or her first international edition of a textbook might be taken aback (and possibly alarmed) at the warning label on the cover that reads something like “Not for sale in the United States.”

As one might expect, publishers have tried to prevent arbitrage from taking place, as this lowers the price they can charge in the U.S. market. As a result, they include such warning labels on their products and even taken legal action.

Fortunately for us students, the Supreme Court ruled in Kirtsaeng v. John Wiley & Sons, Inc. (2013) that owners of copyright materials — in this case textbooks — cannot legally stop the resale of these materials in secondary markets within the United States.

The final way to minimize your textbook cost is to sell back your books after you’ve used them. After taking a course, you most likely will not need to reference the textbook at any point after its closure — besides making your bookshelf more diverse, there isn’t much benefit in keeping them.

Fortunately, selling textbooks online is a relatively simple task. Many websites, such as Chegg, will buy back your used books. 

But your kickback is dependent on when you sell.

A 2012 study found that the best time to sell textbooks is between Aug. 20 and 26 and between Jan. 7 and 13. This is because demand for textbooks is highest during these times, as college semesters are starting across the country. Consequently, suppliers are willing to pay higher prices since they themselves can obtain a higher price selling to these students.

The study also reported that the worst time to sell is between Nov. 19 and 25 and between April 9 and 15. Also, since demand in the secondary market is at it lowest, it’s an ideal time to buy. 

Of course, this textbook strategy requires more time and effort on the part of the student, but the financial end gain is substantial compared to the simple and costly method of buying brand new textbooks semester after semester.

So, for students who bought all of their books new and, quite literally, paid the price, there is a way to save yourselves from those biannual costs — become an active participant in the used book market. 

Write to Thomas at teh18@pitt.edu