If you're like 99.99% of college students out there, you've probably had a moment where you wonder just exactly WHY that Introduction to Macroeconomics textbook you are required to buy costs $180 from the school bookstore.
The knee jerk reaction is that the campus bookstore is ripping you off. It's easy to blame them because they are the face of the industry to you.
In reality, the bookstore isn't making nearly as much as most students would think.
The pie chart shows that there are many hands reaching out for a cut of profits from the sale of a textbook. The campus bookstore is the last in line, and makes a mere $4.50 on the sale of every $100 textbook (after it has covered its costs).
While that is certainly enough to keep them in business, it's not going to turn bookstore administrators into Bill Gates anytime soon.
On the other hand, publisher's costs/profits are represented by blue slices. Since this makes up over 50% of the pie chart, it's easy to see where most of the pumped up price is coming from.
In particular, marketing and printing costs make up a whopping 47.8% of the cost of a textbook.
The reason for these costs being so high is that college textbook publishers have a fairly high churn rate for books. While the newest Hunger Games book will be printed millions of times (pushing costs down), the 9th Edition of Introduction to Macroeconomics will only need to be printed a handful of times.
The fixed costs in marketing and printing these textbooks keeps the cost of a low-production run much higher than that of a popular novel.
Even if you understand the breakdown, it still seems a little strange that textbooks are expensive as they are. Do publishers REALLY need to be making $129.60 on every $200 book they sell?
Why does it cost that much?
Unfortunately, publishers have a few tricks of the trade that allows them to continue to pump out books at high costs.
One of them is new editions.
Everyone knows how terrible it is to have purchased a $150 textbook in the beginning of the semester, only to have the bookstore offer $5 for it at the end of the semester because "a new edition just came out."
This isn't by accident.
Publishers continually pump out new editions, even if only small or superficial changes have been made. This ensures that the used textbook market for their book will be killed off, and a flood of students will line up to buy a brand new one from them.
Another trick is bundling.
Publishers will often include special access codes or CDs in their textbooks that change the ISBN. This means that when students search for used books online, the marketplace will be scarce (since there will be very limited amounts of these bundled books on the market).
While it's possible to find the textbook sans special features, it is often confusing, and sometimes the professor will incorporate the extras into their class, making this impossible.