Buying Textbooks

While you might not have seen anything exciting going on in Queens College lately, I saw the exciting world of the market economy hard at work.

While you might not have seen anything exciting going on in Queens College lately, I saw the exciting world of the market economy hard at work.

On the surface, Queens College resembled a utopia-like campus in these first two weeks: students hugging one another and asking trite questions regarding their well being and respective summer activities (don’t deny it-you know exactly what conversation I am describing and you are guilty of having committed the crime of feigning interest multiple times), laughter resonating in the cafeteria, and people taking advantage of the beautiful weather by playing Frisbee on the quad. But, through my perspective, I saw the other side of Queens College. The dark side I am referring to is the cutthroat business of buying and selling textbooks. A highly interactive and competitive field, the textbook economy rears its ugly head at the onset of every semester. And almost all students will find themselves participating in it for all four years of college; I would venture to say that for freshman, buying the necessary material for classes is a rite of passage.

Before shopping, it is vital to first decide what to get. Some professors say that the textbook is optional and not necessary for learning the material that is tested. If indeed this is the case, it would behoove you to not get the book. The simplest way to save money is, after all, to not spend it! Furthermore, you only have a finite amount of space in your room dedicated to books that are required.  If you will not need it nor use it and it will just accumulate dust, such a purchase would be the epitome of a waste of money.

Another important decision when it comes to buying textbooks is to choose whether to rent or buy. Both have legitimate benefits and drawbacks. For example, renting enables you to return the book; this policy is a boon for people who have no interest in taking a class in a particular subject again, and will therefore not be stuck with the book at the end of the semester. Another benefit is, of course, that renting is significantly cheaper. The downside to this method, however, is that you cannot recoup the money you spent on the rental by resale and, in most cases, you are penalized for not shipping back on time.  Additionally, it is worthwhile to keep books that apply to your major because you never know when you will need to refresh your memory on the basics of that subject.

An example of prices listed on Amazon. While it might be tempting to rent simply because it is cheaper, in the long run you might be paying less by buying.

An example of prices listed on Amazon. While it might be tempting to rent simply because it is cheaper, in the long run you might be paying less by buying.

With buying, you have the security of knowing that this item belongs to you. While the cost may be higher, you can resell it and recoup some or all of what you paid. (Or if you are an excellent salesman, you can make a profit. For example, instead of selling it for, say, 75% of what you paid, you can rent it for 40% of its value for a semester. After renting it out for 3 semesters, you have already gained a profit! Then, you can sell it-granted for significantly less than what you originally paid, but nonetheless adding to your earnings. Who would have thought that a textbook could become a cash cow?)

Next semester, when more professors will be requiring the newer textbook, there will be a greater demand for my textbook. As you can see from the graph, as the demand increases (by shifting to the right) and the supply remains the same, the price increases.

Next semester, when more professors will be requiring the newer textbook, there will be a greater demand for my textbook. As you can see from the graph, as the demand increases (by shifting to the right) and the supply remains the same, the price increases.

Textbook editions also matter. Publishing companies update textbooks every year, but how different is the 25th edition from the 24th? Often it does not matter. Of course, there are always those professors who require the latest and therefore most expensive version, which unfortunately happened to me recently. However, instead of dreading the fact that I would have to shell out the full price, I looked at the positive side: at the end of the semester, I will have little competition when reselling the book because it is so new. With very little supply but a lot of demand, I will recoup most of what I spent. In fact, the New York Times a few years ago noted that students very often buy the latest and most expensive edition of a book, instead of an older, cheaper one, because the newer one will retain more of its value and will not become obsolete in the near future.

The markets for buying textbooks nowadays are extremely diverse, thereby giving buyers many options as to where to buy. The classic choice would be the Queens College Bookstore. The pristine condition of the books sold there does not, in my opinion, make up for the fact that the prices are retail and therefore exorbitant. Often you must place an order for your required material-you do not even get the convenience of immediately taking the book home. I was even speaking to a professor about the Queens College Bookstore and she said point blank “Do not buy from the Queens College Bookstore”. And she was not even an economics professor.

Canal Street is notorious for their black market of fake designer goods. The black market between students at Queens College, however, is much less structured.

Canal Street is notorious for its black market of fake designer goods. The black market between students at Queens College, however, is much less structured.

Another place to buy books is from fellow students. This market is essentially a black market, a term that often unfairly conjures up images of extremely illicit interactions. A black market is, by definition “a market in which buyers and sellers take place at prices that violate government price regulation”. Socially, unlike its definition and reputation connote, this practice is entirely innocuous and fully acceptable. To find people who are buying and selling, one can either search on Facebook for people publicizing what they need or, more simply, seek out the necessary books by word of mouth.  This type of market, while amorphous in nature, follows the economic concept of supply and demand perfectly: there is a supply of books that are no longer wanted and there is a demand for books by people in particular classes.  The benefit to this method is that the cost is often negotiable. Unlike in a store, haggling between the buyer, seeking the lowest price, and the seller, seeking the highest price, is common. Additional benefits include immediately receiving the book as well as hearing gossip about the class-a resource that no bookstore could ever provide.

The internet is a third sphere in which one can seek out rock bottom prices. On websites such as Amazon and Ebay, you can find your required textbooks at heavily discounted prices because they are used. The downside, of course, is that you cannot physically see what you are ordering and you do not know how long it will take to ship.

By joining Amazon as an Amazon student, you can get various perks including  free two day shipping, exclusive deals and promotions, and unlimited instant streaming. Buy beware: it is only free for the first six months; after that, you must start paying. If you want to take advantage of these perks without paying, you must be careful to quiz your account before the six months are up.

By joining Amazon as an Amazon Student, you can get various perks including free two day shipping, exclusive deals and promotions, and unlimited instant streaming. Buy beware: it is only free for the first six months; after that, you must start paying. If you want to take advantage of these perks without paying, you must be careful to quiz your account before the six months are up.

While the internet as a place to buy textbooks is an amazing resource that our parents’ generation never had, there is another new and developing market: E-books. E-books are on a tablet and are significantly cheaper than textbooks because they simply involve downloading. A boon to some while a bane to others is the fact that there is no tangible material to a textbook that is downloaded on a slim e-book. As of now, one cannot recoup what you paid for the E-book textbook, but it very well might be that technology will evolve soon enough to enable us to do so.

This information would have been helpful before you bought your textbooks, but do not worry: you will have next semester to apply this knowledge. If you are a natural businessman, then buying on the black market is for you; if you are comfortable always reading on a screen, the E-book textbook downloads are your best option. Whether you realize it or not, there is a great deal of business thought and consideration that goes into how you go about buying your textbooks. You look at things from a financial point of view and you do not even realize it!

Published in: on September 12, 2013 at 6:04 pm Comments (0)

Labor Day Sales

It is hard to believe that a mere week ago, I was basking in the sun, enjoying my last few moments of summer vacation-only to be thrust into work mode a day later for the Fall 2013 semester.  The transition into this particular semester is unusually rough because after barely three days of classes, Queens College was closed  for Labor Day. This holiday weekend served a double purpose. First, it enabled those who were already exhausted to catch up on sleep. The purpose that resonated more with me, however, was to exploit incredible deals and amazing savings in the shops. While I unfortunately was not able to hit the racks this year, I find it interesting to analyze the economics and psychology behind the behavior of firms and households during the Labor Day sales.

An advertisement for a sale at Sears. The red, white, and blue theme tries to express the notion that Labor Day is an inherently American holiday, thereby enticing you to promote your American spirit by shopping. In fact, it is just a way to clear out inventory.

An advertisement for a sale at Sears. The red, white, and blue theme tries to express the notion that Labor Day is an inherently American holiday, thereby enticing you to promote your American spirit by shopping. In fact, it is just a way to clear out inventory.

Before I begin, it is important to understand why we had off (Granted this is a financial blog and not a historical one. In the business world, though, the more you know, the better off you are). Labor Day officially is, according to Wikipedia, “ a celebration of the American labor movement and is dedicated to the social and economic achievements of workers”. Since it is a public holiday, shopkeepers keep their stores open so as to entice those who have off from work to shop. I find it rather ironic that a day intended to pay homage to workers ends up forcing many of them to work (often even for extra hours!) on a day when they too should technically have off. But I digress…

A Labor Day coupon I received in the mail. I received about ten variations of the same one. Why are they so desperate?

A Labor Day coupon I received in the mail. I received about ten variations of the same one. Why are they so desperate?

For both firms and households, Labor Day is a major boon. By firms, I mean companies and stores that sell goods and services; by households, I mean people like you and me who buy the goods and services from the firms. Knowing that it is the last official vacation of summer, firms recognize Labor Day as the last possible opportunity to grab the attention of shoppers who are off from school and work. More importantly, it is their final chance to clear the shelves of their summer inventory-items in stock that are to be sold. Getting rid of these goods is vital for stores because they want to bring out next season’s items and make money off of the remaining inventory. Often, stores do not even require coupons to benefit from these sales because they are that desperate to bring out the fall season items.

This desperation puts consumers in an advantageous position. The items that are put on the end of the season clearance rack must not automatically be disregarded. Often people assume that the damaged goods are the ones that are left over. This is most certainly not the case; there are a plethora of reasons as to why an item is still there. For example, people might have liked the item beforehand, but did not buy it because it was originally too expensive. Now, on clearance, it might not just be cheap, but a steal! Or, more simply, people might have genuinely overlooked the product and only you are now fortunate enough to find it. Of course, it is necessary to first consider how much use you will get out of the item. For example, if you buy something at a rock bottom price but end up never using it (gym equipment coat rack?), you have just wasted your money. However, it is  also possible that you do not need any of the things now, but come Summer 2014, you will be well equipped for the new season.

Especially in clothing stores, I noticed a pattern as to the type of customers that firms tried to appeal to. Since teens and young adults are on the brink of returning to school and college, respectively, this is their last opportunity to splurge. Additionally, parents need to buy school shoes and clothing for their children. Such purchases are guaranteed considering the fact that kids have outgrown their old duds and need new gear. Therefore, it is not uncommon to see a mall inundated with deals especially directed at younger consumers on Labor Day weekend.

Payless sells many children's shoes before school starts. Payless even started their sales earlier to get a head start on the profits.

Payless sells many children’s shoes before school starts. Payless even started their sales earlier to get a head start on the profits.

With the possibilities for incredible sales, it is easy to get carried away when shopping. But buyers beware: shops are not always charging the lowest prices when they advertise sales. They might indeed deduct a percentage off of the cost-but at what cost to you? Often, prices are “jacked up”-or increased higher than normal- so that once the discount is applied, the store charges the same amount as, if not more than, they did originally. It is a psychological tactic that frequently tricks the naïve shopper. For example, you might pass off buying a bag for $100, but if the tag says it was originally $200 but now, at 50% off, it is $100, you might think it is an amazing deal. A wise shopper is not one who can simply find bargain prices, but one who is shrewd and thinks before he/she acts.

Labor Day generates the second largest amount of sales in a year, only trailing Black Friday (which I will obviously devote a blog post to when the time comes). The difference between the two is that while Black Friday requires organized planning well in advance, Labor Day does not require that type of effort-it is significantly more family oriented and less violent. Labor Day may seem like only an insignificant, casual day off, but upon closer inspection, this day and its sales bear much financial and economic significance.

Published in: on September 4, 2013 at 5:42 am Comments (0)

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Published in: on September 3, 2013 at 1:24 pm Comments (1)

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