E-Commerce Spurs Exploding Used-Book Market, Study Reports

On February 27, the Book Industry Study Group (BISG) released its new study of the used-book market, based on sales in the U.S. for the calendar years 2003 and 2004. The Used-Book Sales: A Study of the Behavior, Structure, Size, and Growth of the U.S. Used-Book Market notes that, propelled by e-commerce, the used-book market is "exploding," and it estimates that in 2004 total used-book revenue exceeded $2.2 billion, with 111 million used-book units sold, up 11 percent over 2003. Overall, used book sales are estimated to comprise 8.4 percent of total consumer spending on books.

"The rapid growth of the general trade used book market is a direct result of the Internet eliminating much of the friction in the buying and selling process," said Jeff Hayes, group director for InfoTrends, and principal analyst for the study, in a statement. "Used books are now a factor in the business equation for publishers and booksellers."

Among the study's key findings:

• Educational books (textbooks, other course material) were the most significant used-book category, with 38.6 million units (34.7 percent of all used-book units) and $1.633 billion in sales (73.5 percent of total revenue). Noneducation books -- including fiction, nonfiction, and antiquarian and collectible titles -- accounted for 72.6 million units (65.3 percent of all used-book units) and $589 million in sales (26.5 percent).
  
  
• Over 41 million used-book unit sales (37 percent) were made via the online market, which includes online marketplaces, online specialists, and the websites of bookstore chains and independent bookstores. Almost 51 million were sold at physical bookstores, and 19.5 million were sold at other locations, such as thrift shops and book fairs.
  
  Furthermore, the study found that unit sales of used books through online channels increased 34.2 percent in 2004 over 2003, representing most of the year-over-year growth in the used-book market. Bookstore used-book units increased by only 0.8 percent with college stores accounting for the bulk of that growth. Moreover, sales of used-book units at independent bookstores (excluding college stores) declined.
  
  
• More than 50 million used books were sold in 2004 through the bookstore channel, which includes bricks-and-mortar college stores, independent bookstores, and branches of chains. The study notes that college stores dominate this market: Textbooks and related educational material accounted for about 63 percent of used-book sales and 93 percent of used-book dollar sales via the bookstore channel. InfoTrends also predicts that the sales of used books at bookstores will remain flat "at best" over the next few years, as "most used-book stores are seeing a growing portion of their business come via the Web."
  
  
• The study notes that 65 percent of independent new-book stores sell used books, while 85 percent of college stores sell used books.
  
  
• The study projects that the number of "online specialists," professional booksellers who do not have a bricks-and-mortar bookstore and sell primarily via online marketplaces, will grow over the next few years "as some owners of bricks-and-mortar used-book stores close their doors and focus exclusively on Internet-based sales." Growth is also expected in the number of part-time online specialists who resell books they purchased for personal use and books they bought at book fairs, yard sales, and related events.
  
  
• In its conclusion, the study predicts that the used-book market will "undergo significant transformation over the next few years" and there will be three major battles: the booksellers' battle to tie into electronic marketplaces; the battle to secure desired inventory, and the battle for consumers.
  
  The study stressed that, "as the marketplaces become saturated with booksellers and as inventory replenishment models are optimized, booksellers and marketplaces will need to retain and expand their customer bases....
  
  "In general, we expect that marketplaces will shift their resources from developing infrastructure and obtaining more books to marketing and customer service."
  
  Furthermore, the study concludes, "More independent new-book stores will sell used books to serve their customers better and compete with the national bookstore chains. The result could be more competition for inventory (potentially driving up costs) and more competition for sales (potentially driving down prices).
  

The study was based on analysis of sales data from the leading online booksellers and primary research with over 500 booksellers and over 2,000 consumers and students. Major data sources included Abebooks.com, Alibris.com, Amazon.com, Barnes & Noble.com, Biblio.com, eBay, and Powell's Books. Partners in the study were the American Booksellers Association, Bowker, Book Hunter Press, Monument Information Resource, and the National Association of College Stores.

The complete study, which is illustrated with 94 graphs and charts, can be ordered from BISG at www.bisg.org.