Textbooks and 21st Century Markets

With the start of a new academic year, I've been in the market for textbooks and have been struck by a couple of things.

 

First, why does every course specify two textbooks, one of which can only be purchased for £50 with no second-hand copies retailing for less than £40 and at the same time suggest another textbook that can be found for £10 second-hand?  And who buys the first book?

 

Second, as Joe Kraus, the dotcom pioneer said, whilst the 20th Century was about dozens of markets of millions of consumers; the 21st Century is about millions of markets of dozens of consumers. My anecdotal evidence for this? I was looking to buy the first-year econ textbook Lipsey and Chrystal's "Economics, 12^th ed." and I found that the cheapest place to buy it was on the Amazon-like Abebooks.  When I bought the book I didn't really look at where the retailer was based (I actually thought it was the US) but when I logged into my DHL tracking page I noticed that my seller was located in Delhi, India; and that got me thinking, how big is my Indian booksellers market for the Lipsey book I just bought? Is he a 21^stcentury Krausian retailer?

 

Time for some market-sizing. In given year there are roughly 21,000 economics and politics students in the UK (http://data.gov.uk/dataset/hesa-qualifications-in-uk-level-mode-of-study-domicile-gender-class-of-1st-degree-subject/resource/da11b481-7a31-4a05-91cb-38fe085ffc58).  Let's assume that only half of courses specify Lipsey as one of the recommended texts.  And let's also assume that the majority of these people want to buy the cheap Lipsey book rather than the more expensive option and finally let's assume that the number of students from other disciplines that want the Lipsey book compensates exactly for the econ/politics students that don't want the Lipsey book (I know this isn't precise but heck its ballpark). 

 

Of those 10,500 students on Lipsey-recommending courses roughly 3,500 will be first years who would be interested in the book.  Extrapolating for the English-speaking student body around the world, we can estimate that the total market for the book is going to be around 50,000 individuals. 

 

But that isn't the whole picture - according to this survey (http://publishingperspectives.com/2012/09/are-college-students-buying-required-textbooks-75-in-us-say-no/) only 23.4% of students buy the required textbooks and of those 59.4% buy secondhand books.  Now I think that (a) the students that answered 'no' and put themselves in the 23.4% assumed the question to be asking if they bought all required books rather than just some and (b) Lipsey is a mainstream and relatively important book; as a result I'm going to be more hopeful of my contemporaries and say at least 60% bought it. 

 

From all of that we get the second-hand market for Lipsey as being 50,000 x 60% x 59.4 %; i.e. somewhere around 17,820.

 

That is a tiny number of people but that still isn't the tiny market that potentially exists for online second-hand retailing. Why not? Well from experience I expect that a lot of undergrads buy their second-hand books in person either from a store or by inheriting from older students.  Therefore the number of people looking to buy this book online could be as few as 5,000.

 

This is still more than a dozen but it is exactly the sort of market that Kraus was talking about.  My retailer can hold second-hand first-year English-language textbooks for a range of subjects and know that because of Abebooks and the internet he can reach a market to whom he can sell those books.  That is the internet economy.

 

p.s. One last thought – how amazing is international shipping? My order was with a bookseller in India who then shipped my book via DHL. It has since taken a trip to Liepzig, Germany, gone to the East Midlands and is now coming to me via Heathrow. All that for £3.69! That’s the price of a meal deal at Boots.