Hal Varian of the NY Times has written an excellent analysis on the effect of Amazon’s used-book sales on the general market for books.
While Amazon is best known for selling new products, an estimated 23 percent of its sales are from used goods, many of them secondhand books. Used bookstores have been around for centuries, but the Internet has allowed such markets to become larger and more efficient. And that has upset a number of publishers and authors.
The publishers and authors may be unduly upset, he points out, due to the countervailing effects of the used-book market
When used books are substituted for new ones, the seller faces competition from the secondhand market, reducing the price it can set for new books. But there’s another effect: the presence of a market for used books makes consumers more willing to buy new books, because they can easily dispose of them later.
Applying the authors’ estimate of the displaced sales effect to Amazon’s sales, it appears that only about 16 percent of the used book sales directly cannibalized new book sales, suggesting that Amazon’s used-book market added $63.2 million to its profits.
Apparently not everyonoe shares my enthusiasm about this article, judging by the dazed look I got from the co-worker I just accosted outside the bathroom. That may suggest either high boredom-elasticity among heterogeneous consumers of the article or a poor choice of venue.
Read the full article - Reading Between the Lines of Used Book Sales
Incidentally, the Times article links to an SSRN paper with empirical research. My spidey-sense is telling me that there’s been a bit of an about-face on the part of editors who some months ago would never allow an article to link to another source on a 3rd party’s website. Tech rags such as Wired have done that for a while, but it seems the Grey Lady has finally (and only recently) started wising up to the tao of the internet.
Oh and since we’re talking about books and this is a helluva long post any way, why not read my lonely little essay Hot Wet Book Love. I promise I’ll get around to writing another <fingerscrossed>one any day now</fingerscrossed>…
