South-Westerns' Economic News Summaries
Move over Barnes & Noble; make room for John Q. Public, Bookseller
Subject market for used books line is growing
Topic Monopolistic Competition
Key Words

publishing, online sales, Amazon

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Reference ID: A137353796
News Story

Companies like Amazon.com, A libris, and eBay are making it easier and easier for consumers to sell their used books online. The resulting glut of used books is giving traditional booksellers a headache of significant proportions. Faced with flat sales already from online bookselling, traditional sellers are seeing their profits fall with demand for new books.

Once consumers finish reading a book, rather than taking up space on a bookshelf, Amazon (for example) allows users to sell the book themselves through their own website. Amazon charges $0.99 per book, plus 15% of the sale price for the service.

The books are often indistinguishable from those purchased as new. The dust jackets are still intact, the pages look almost as if they haven’t been read. The difference between buying a used book online and buying one via a traditional bookseller: royalty payments. Authors are getting shut out of the process, prompting some writers to press their literary agents to find a way to share in the massive amounts of revenue being generated by this process. Used book sales amount to about $600 million annually, which is only about 2.8% of the total consumer book sales, but it is growing at 25% annually. Researchers estimate that used book sales could reach 10% of the market, or over $2 billion, by 2010.

Questions
1.

Suppose you bought E.L. Doctorow’s novel, The March, online for $25.95, and read it the first weekend you bought it. As you consider reselling it online, what is the opportunity cost of selling your book?

2. What is the advent of used bookselling online doing to elasticity of demand?
3. Is this a form of price discrimination? Why or why not?
Source Jim Milliot. :Used books: threat or opportunity? Industry looks for ways to react to trend.” Publishers Weekly, Oct 3, 2005 v252 i39 p6(1)
Jeffrey A. Trachtenberg. “The Growing Market for Slightly Used Books.” The Wall Street Journal. 29 September 2005. http://www.wsj.com
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