February 2, 1995: Vol26n15: Text prices: here's how they're calculated
By STEVE COX
Reporter Staff
So you think the bookstore is ripping you off? At $40 or $50 a throw,
these textbooks must be making someone rich, right?
	Wrong. Most evidence points to that being a misconception.
	"Our dominant sales are in textbooks," explained University
Bookstore General Manager Gregory Neumann, "but our dominant profits
are from general merchandise. The company, which has a general retail
orientation, would like to see more of that stuff -- clothing marketed
in all the windows -- but I have sort of resisted that."
	Here is how textbook prices are calculated, and why.
	New textbooks used to come with publishers' recommended prices
printed on them, according to Neumann, but most publishers have
abandoned that practice. Now, publishers generally charge bookstores
80 percent of suggested retail price, plus the bookstores pick up the
cost of shipping.
	The bookstore sells texts at the publisher's recommended
retail price. That leaves less than 20 percent gross markup in the
textbook. After factoring in overhead costs, the bookstore clears
about two percent, according to Neumann. That's one dollar profit on a
$50 book.
	The policy for pricing used textbooks is somewhat more
complicated, and only slightly more profitable.
	"If a textbook has been 'adopted' (reordered) for the coming
semester and we need the book to fill the number ordered, we pay 50
percent of the current new price for the book. That book would be
resold for 75 percent of the current new price." The timely submission
of book orders by faculty could aid in getting students more money for
their books, according to Neumann.
	The task force recommended that faculty members be made more
aware of "the impact of their tardiness in responding to adoption
requests on the pricing of used textbooks." Textbooks that have not
been reordered are normally resold to 'textbook wholesalers' at prices
ranging between 10 percent and 35 percent of the current new
price. However, Newmann points out, the bookstore has no guarantee
that it will be able to sell all the used books it repurchases to
wholesalers. Losses from books repurchased but not resold are part of
the calculation of used book prices overall.
	These pricing schemes are not unique to UB. The used book
"formula" is basically an industry standard, according to Neumann. The
actual percentages paid by wholesalers seem to have dropped,
particularly in recent years, according to Neumann, because the
turnaround time for new editions of texts is shorter. "The average
life of a particular edition of a text is now three years," said
Neumann, "but some types of books may be re- printed in new editions
every year or two."