While students tend to blame bookstores for high textbook prices, industry insiders say it’s a much more complex issue.

Jessica Boullion

Jeff Neel, a sales manager for McGraw-Hill Companies, Inc., one of the leading book publishers in the country, said the textbook industry is in turmoil and in need of reform. He said even publishers aren’t making very good profits, despite the high cost of textbooks.

“It’s such a complex issue that I don’t really know where you can assign blame,” Neel said.

Many people attempt to do just that, though. Students blame local bookstores for high prices, bookstores blame the rise of Internet retailers for poor sales and publishers blame the used book market for limiting the sales of new books.

Neel admitted that publishers have raised prices sharply in recent years.

According to the Association of American Publishers, the college textbook industry earns $6.5 billion in profits each year from college textbook sales.

But Neel said students have contributed to that increase by utilizing the used textbook market and Internet to shop for the lowest prices, forcing publishers to raise prices to offset losses.

He also said the cost of making software and websites that supplement textbooks increases their prices. Neel said 25 to 33 percent of McGraw-Hill’s employees work with textbook technology.

Edward Sidlow, a political science professor at Eastern Michigan University, has written several textbooks and said the development of the Internet has caused the textbook industry to shift.

“The industry is trying to balance the traditional role of publishing along with the booming Internet world,” he said. “It’s a goofy industry that’s in transition.”

Wealthy bookstores?

LSA senior Eric Li, a Michigan Student Assembly representative who developed a group to report on the textbook operations at Shaman Drum Bookshop last year, said bookstores usually make more profit selling a used book than a new book.

Students are willing to return their books for much less than publishers charge for new copies, meaning bookstores can charge close to wholesale for used books and make greater profits.

Campus bookstores usually mark up the price of new textbooks between 33 and 42 percent, Neel said.

Even so, Shaman Drum doesn’t seem to be making that much money, Li said.

Neel said bookstores catch the brunt of the complaints because they’re in closest contact with the students.

“Shaman Drum and bookstores like it are often on the frontline and easiest for students to blame,” Neel said. “It really has to be difficult for the independents like Shaman Drum to operate during a time like this in the industry.”

With online marketplaces booming, independent bookstores have struggled.

People can buy textbooks online for a lower price than they would if they bought the same book from a campus bookstore.

Shaman Drum owner Karl Pohrt declined to comment for this story.

Will the industry improve?

Many in the textbook business said it will take time for the textbook industry to improve its profit margins.

Neel said he wouldn’t recommend investing in the textbook industry right now. McGraw-Hill, which posted 19.7 percent returns in 1999, had profits of just 4.2 percent ($38.9 million) last year.

“I’d say it’s an industry in turmoil and that it needs to consolidate more,” he said. “There are definitely problems.”

Sidlow said the industry will always have problems because some group will always be stiffed in the process.

He compared the sale of textbooks to an owner buying dog food.

“Manufacturers are selling the dog food to people who aren’t going to eat it,” he said. “Publishers are selling to bookstores and instructors. But isn’t it the student who’s ultimately going to be using that book?”

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