Talk on Textbooks Hasn't Changed Much

One primary impetus for forming the College Bookstore Association (CBA) was to improve relations between college stores and academic publishers.

CBA promptly named a volunteer committee to work on the issue. Fifty publishers were invited to meet with CBA representatives at the 1925 conference in Chicago to discuss various sticking points between the two. Only seven chose to accept, but the discussion was frank and fairly lively, according to detailed transcripts preserved in NACS records.

Publishers and store managers both opened up about their problems with textbook sales. Complaints abounded. It was clear some publishers didn’t understand certain hurdles stores faced—such as last-minute adoption changes by faculty. For their part, some stores didn’t seem to realize the impact of their high returns on publishers. The pricing structure on textbooks was frustrating to both, further complicated by several state legislatures that had capped the retail markup on textbooks at 25%.

The records show that a lot of things haven’t changed much about the textbook business since 1925. The meeting transcript was reprinted in a 1959 issue of The College Store magazine as part of a series commemorating NACS’ 35th anniversary. Here are some excerpts from that transcript (and take note that college stores were known as “dealers” back in the day):

First Meeting with Publishers

The first formal meeting with the CBA and college text publishers took place at the 1925 Chicago Convention. The meeting was attended by C.W. Taber of Lippincott; Mr. Shirer, Henry Holt & Co.; Mr. McAllister, World Book Co.; Mr. Hummell, D.C. Heath; George Brett Jr. of Macmillan Book Co.; Mr. Church, Appleton-Century; and Mr. Richardson of Ginn. Frederick Melcher of Publishers Weekly was the chairman of the session.

Mr. Taber of Lippincott spoke as follows:

“We fully realize the expense of doing business on the part of the local dealer. You realize a short profit on some of the things you sell, no doubt, but at the same time there are three phases of this proposition that I hope to touch on in my remarks: (1) the school; (2) the dealer; and (3) the publisher. And the college bookstore is perhaps in a little different position than the average dealer who is not catering to the higher educational institutions. We give to the public schools a discount of 25% net, F.O.B. Chicago [“free on board,” meaning the buyer owned the books as soon as they left the Chicago warehouse], and extend that practice to college bookstores with these reservations: we do not sell books on consignment and books are not subject to return. If books are returned without an agreement, it is at the dealer’s risk. We feel that sending out and returning costs us about 10%. There are two problems to be considered: the instructor or professor assumes no responsibility when ordering a new class book, and in his enthusiasm may order far too many books, which is the source of all your worry. A publisher sends out salesmen to work up sales. The sale is created and the bookstore does not have to make any effort. The book is sold before it is placed on your shelf, and your job is to turn them over to the student, and for that service you receive 25% discount F.O.B. Chicago or Philadelphia. The privilege of return has been very badly abused, but this last year it has been improved 50 or 60%.”

Mr. Hartong, of Columbia [University Bookstore], spoke of the fact that all manufacturers did as much to promote the sale of their goods as publishers, and yet give 33 1/3% discount or even higher. He also said that the overhead at Columbia University was between 20 and 25%, and that 75% of their books were text books. That is the situation generally. The bookstore at Cornell is departmentalized so that Mr. Sanford could state definitely that their overhead in the book department ran from 22 to 23%.

Mr. Sanford in speaking of returning books, talked as follows: “The only time we ever ask for the privilege of return (it may be once or twice a year) is in the case where a man gives the list in June of books that will be used the next fall, and then in September, when the books are all on the shelf, asks for another book selected in its place. We do not feel that we can absorb the entire amount in this case. In the ordinary course of buying we would wait until September 1 to order, but we figure that we are helping the publisher and ourselves if we order early, the shipment coming about August 1. The publisher is rid of them and knows the demand, and can print up a smaller allowance for the rush orders in September. But from our point of view, the worst feature is the two discount systems on one book, that is, a book with a 33 1/3% discount one year, and the next year the publisher puts it in the textbook class, say, 20%.”

Mr. Ferris, of the University of Tennessee, Knoxville, suggested that the publishers find a way to handle the books that are left in the hands of the bookstore through the over-ordering of an instructor, and thus avoid having them marketed by unscrupulous people. A man will go about the country buying up these left-over new books and then will sell them at less than the publisher’s price. He thought that, from a publisher’s standpoint, these books should be kept out of such hands, so that business could be controlled by a regular and legitimate source. …

Mr. Travis (Chandler’s Book Store, Northwestern University Evanston), spoke of the trouble about new editions especially when you are unaware of them. They come out suddenly, not giving the bookstore time to protect themselves on the old one, and some publishers don’t take care of the old editions. …

The question was then raised by the Chairman as to whether the publishers found the college bookstore negligent in keeping down this overstock.

Mr. Shirer of Henry Holt & Co.:

“There is not any question at all but what the ordering is wrong somewhere. Certainly you people are not to blame. You are not going to order twice as many books as you need, but if there is any way we can help on that, we wish you would tell us. … I can see the possibility of hardship that I never thought of before. … As to the return, I will tell you in what way we are helping. I counted five orders that came to my desk … we have arbitrarily cut the orders of the dealers from 25 to 50%. This is the way Holt is going to help you, so be ready for it. These are in the cases where we accepted returns up to 50% last fall. Talk about your 20%. [Holt sent a letter to stores with a solution.] We will take back our books, but not the other fellows. We will have to sell you our books and let them stay sold. …

“We will say, ‘Order your books in college algebra, now or any time, but for heaven’s sake, get them in early.’ When you ordered five hundred college algebras for your institution what do we tell you? In the first place, you are doing that business on our money. Pardon me if I suggest that angle of the situation, for we have them in stock ready to be shipped on fall dating, which means you do not have to pay for them until October 15th. … We have cleaned up on college algebras. Say you want to keep a few for stragglers. There are always some who come along after the others secure a textbook. Charge them the list price, with the postage added. Still you are out nothing. That is our arrangement on it. …

… “[W]e make exceptions to every rule we make. We do it usually to your advantage and interest. For example, I can remember Jake Reis representing … the State University of Iowa. He wrote in with tears fairly dripping from his letter. He got stuck and thought he could not get the books back unless he bought the transportation, and then ordered them again in three months. The professor had put off his class. I wrote him at once and said, ‘Keep them—we will not enforce the rule.’ … There was another case. A dealer had violated practically every rule we had made, and then he kicked like everything because we imposed the penalty, finally, because here at the last moment we were asked to take back 50% of the books, when, in that particular title, we had exhausted our supply in the fall and were obliged to lose business on that book. … It does not take long in a given subject like college economics when we know within a few numbers how many are required. Now suppose ten or a dozen dealers order twenty-five or fifty books more than they need, each. … There is our profit all shot.

Mr. McAllister, World Book Co., then spoke as follows:

“On one occasion there came the order for a quantity of books in a particular subject from a certain dealer in a college bookstore. During the same week a similar order came from each of two other dealers. And, of course, we had no way of knowing but that these dealers at the same place had already met and decided as to how they would distribute the business of the particular college. As it was, each of these dealers was undertaking to supply the whole needs for that particular book. Perhaps you have more conditions of that kind than you realize. Perhaps if the dealers could get together it would help some. We took this case up with the particular teacher and here is what he had done. He went around to each of the dealers and told them of the books he expected to need. He did not tell them he was going to each of the other dealers, and the result was that he got three times as many books as he needed.” …

Mr. Hummell, D.C. Heath: “Mention has been made several times concerning discounts. Perhaps you are not quite so fully aware as the publisher that the good legislators have standardized invoices and discounts so far as the books used in public schools are concerned, and many of which are also sold in colleges.” …

Mr. Hartong: … “We, at Columbia, send out our so-called requests in advance two months before the term opens to each member of the faculty. These requisitions come in, and we have a mimeographed letter prepared in which we tell the publisher that we have just been notified that Professor so and so is recommending one hundred copies of a certain book economics and that we are giving this information so that the publisher can get some idea of our needs and the definite number we will want will follow later. This helps the publisher to adjust his stock. They usually get this letter six weeks before the term opens. When we are ready to send in the order four weeks before the opening, we cut every order at least 25% and in some cases 50%, all based on former experience and a card index which we keep of each book demanded from the various sources.” …

Mr. Sanford (Cornell): … “We have a card index file wherein we keep on file for one year a record of all the books ordered, and if Professor Jones orders one hundred books and we still have twenty-five, we won’t order the other twenty-five. It may hurt his feelings, but we go right to our card file, and show him that last year we ordered one hundred, and only sold twenty-five or it may be seventy-five. There is one thing, and we do not bite on it very often—that is the exclusive order. A man tells us he is giving us an exclusive order for his class, and we may do it one year, but next year he is out of it so far as our store is concerned.

“There is one thing that hardly touches that point as much, but nevertheless might be brought up. Too frequently the dealer is not advised of new editions. He can cover and save the situation frequently, but he invests in them and the publisher knows it six months ahead of time.”

Mr. Liljeros (University of Pennsylvania): … “I think what we are primarily interested in is the discount rate, because, as we say, most of us have an overhead of from 20 to 25%. … If we buy $3,000 worth of books when it is all over it may be that we have lost 2% on this $3,000 worth of books.”

Miss Fay (State College of Albany): … “I occupy that unique position of being a member of the faculty as well as manager of the bookstore. … Being a member of the faculty, I agree heartily with most of you that members of the faculty have no business sense and knowing that we get out a letter and address it ‘My dear so and so,’ and note across the heading ‘THIS IS IMPORTANT.’ Those letters were handed to each of our sixty-five members.” …

Mr. Pearce (Cornell): “There is one other point: the question of trade books and different discounts.” [He went on at length about his efforts to stock literary works, that had been adopted for class use, in his trade department but couldn’t get trade discounts unless he placed a “stock order” for trade titles twice a year.]

The Chairman then read part of a letter from the Associated Students Store, Berkeley, California, to Harcourt, Brace & Company complaining of the discrimination against the college bookstore when books are billed to them at say, 20% discount, while the same books are billed to the other bookstores in town for 37%. …

A letter … bearing on the foregoing complaint, from Mr. A.H. Gehrs, salesman manager of Harcourt, Brace & Co., was then read:

“We sent a form letter, similar to the one we sent you recently, to all college bookstores, offering them regular trade discounts with the provision that we receive two stock orders a year. Please note that we did not specify any special amount in dollars or titles on these stock orders. A number of the college bookstore managers saw the fairness of our proposition and accepted it accordingly. The greater number, however, chucked it in the wastebasket and for the past twelve months have been complaining that we have not allowed them any better than a 20% discount. … You will understand that we cannot offer a pick-up order discount or a stock discount unless we feel that we have representation. …”

Mr. Brett, of the Macmillan Company, then [said] that the big question among books is that when they are first published, they are primarily published as textbooks and are sold by the college travelers and promoted in our field of this business. But it is felt that there is room for general trade sale, so we give the trade travelers an opportunity for thirty, sixty or ninety days, depending upon the time of the year, territory, etc. in which to get in stock orders for the trade, so much so that they may take care of the small demand. In other words, the initial order can be billed at regular trade rates, with repeat orders up the time limit. …

[Store managers share more stories about instances where they received only the text discount on book orders.]

Mr. Liljeros: … “Another point that comes to my mind is the fact that although the college store turns over a number of books quickly at the beginning of the year (and this, incidentally, seems to be in the mind of a lot of the publishers), we cannot get away from the fact that our overhead is running throughout the year. We are not getting the turnover that the trade bookstores are.”

Mr. Church, representing D. Appleton & Company: … “The fact is, the way the publisher thinks in introducing the college bookstore is (we say this with apology) simply the distributor. Let me answer that question that Mr. Liljeros asked. When the publisher issues a textbook it is at a closer margin than trade books, considering his expense of securing adoption to warrant a profit, and in setting his price he recognizes the fact that it is a text and that the students should get the benefit of as low a price as possible. Does that answer it?”

Mr. Liljeros: “Not particularly, because with us, we may, some of us, want to go throughout the year and finish up without making any money, but most of us like to show a good balance sheet. To take for instance where we have a textbook that is used only once during the year, and as I said, we still have to keep the man in the book department all the year, and still have to keep a force on because we have to have them there for our rush seasons. If we do not make a sufficient margin of profit, we certainly are going to suffer and lose money. I would like to hear some more discussion as to raising the list price.”

Mr. Brett: … “The publisher has no initiative in the matter. You will have to get the state legislature to repeal the law as to the issuance of the lists. … Here is a certain book that seems to be a college book, we will say, and it is possible that those state laws do not apply to college books, and we say that we can allow the 33 1/3% and call it a college book, and then along comes an order from some high school asking for it, and if it is listed in the state of Illinois, immediately we are compelled to reduce the list price and file it with the state department of Illinois at 25% discount. We have no choice in the matter.” …

Mr. Hummell: … “I recommend … that you do familiarize yourselves with these state listing laws; they certainly have been a thorn in our flesh. … You suggested raising the price. We had our fill of that sort of thing during the war. No two states list in the same year, but the listing had to stand for five years, so if you undertook to list in Michigan, there is the Ohio law which went into effect, and about which, by the way, we had a little tilt. That is with the state of Michigan, a little lawsuit and now they have backed down. But just the same, these laws are overlapping; you bring your iron to rest in Illinois, and you have your Wisconsin laws and when you have settled with Wisconsin you have your Ohio laws, and so it goes. We have to stick to these laws five years.” …

Mr. Richardson of Ginn & Company: … “One point … that I would like to impress upon you more specifically is that in every lot of return books, why not send a note of explanation along with them, stating your reasons for returning them. After all there is a human being at the other end who receives them.” …

Mr. Hartog: “I am not so much interested in returns as I am in a better discount. We could get along fairly well and perhaps this 25% minimum discount could be tried out a year, and we could leave the return privilege an open question and if the dealer finds himself overstocked he can write to the publisher, and say, ‘We have so many books left over, can you take them back?’ The publisher may then say that some other university is using the same book and perhaps the dealer could get in touch with the other university and dispose of the stock in this way.” …

Mr. Stone, of the University of Arkansas: … “The way to get at it is to lay your books, pay the transportation charges to our store. This may not help the larger stores very much, but it will help the little fellow out in the sticks like ourselves.” …

Miss Dennis, of the Washington University, St. Louis: “We are in a position to pay cash immediately upon receipt of the books. Three years ago we made an attempt to get the special compensation for paying cash and in almost every case we were turned down. We asked for 2% when we order books in June and pay for them the first of July instead of waiting until September or October. We were turned down by the publishers.” …

The conference then adjourned so that members might participate in the program and entertainment features of the American Booksellers Association.