A Fantastic post on the US economy and how it relates to Bookshops by Tom over at Pazzo Books. If you’re in the Boston area (Roslindale to be more specific) you should check out his shop.
How ‘Bout that Economy?
I was reading some talk recently – I think on the ABE forum – about the used book business being recession proof. Why wouldn’t people strapped for cash stop buying new books and spend their suddenly scarce cash on the lovely used and inexpensive variety? I even once harbored the dream that the used book business was counter cyclical – not only recession proof, but actually better in a down economy. Sadly, the truth is that actual recession proof businesses are hard to find – drugs, liquor, prostitution,
pornography, that might be about it. However, because the used book business is composed of a number of different elements, it does have its own cyclicality to it, so there is no need to hide in fear of the, apparently, coming recession (unless, of course, as the talking heads on Fox have been bloviating about for weeks, this is the beginning of a prolonged depression brought on by terrorists, hordes of Mexicans, tax and spend Democrats, and the ghost of FDR).
Recessions are normal phases of the business cycle – people freak out about them, but they just happen from time to time. The economy gets strong, companies manufacture great stuff to buy, people buy it until they decide they have enough stuff, the companies don’t stop manufacturing in time – too much stuff; recession. That’s the executive summary anyway and more or less what I learned in Econ 101 (where I got a C+, so don’t go second guessing). Governmental policy can make recessions worse or
better, more or less frequent, but they can’t make them disappear.
The good news is that, while in most lines of business both supply and demand tend to be elastic, in the book business supply is relatively inelastic (if the price of books drops 50%, supply remains relatively unchanged instead of decreasing as demand increases.) This makes a recession a nice time to buy books. There is also a tendency for people to sell books when they need some
extra cash which is often the opposite of when it would be a good time to sell books from a market point of view. This can seem a little Machiavellian, but paying more than you need to for books is un-American. Un-Canadian too. We always offer a fair price for books, obviously, but fair changes with the market.
Here are a few other ideas for the down economy:
If you’re in Canada, why not schedule a scenic drive down to the U.S. and pick up some books. Take advantage of the weak dollar, the weak economy, and write the whole thing off as a business expense. If you’re in the East, why not swing down for a fun event like the Boston Antiquarian Book and Ephemera Fair – (in the interests of full disclosure, we might be there). This is a great opportunity to pick up some books at a discount for Canadian sellers – the dollar hasn’t been this weak since Jimmy Carter
spotted a UFO over Leary, GA (this is true – the Canadian dollar peaked to around current levels in the 1973-1976 area. Jimmy filed his UFO report in 1973.).
We’ve noticed that the lagging housing market has put a real damper on the cleaning out of houses business. Three years ago we were up to our elbows in people moving and getting rid of their book collections. There days a call is cause for celebration. This is another example of the book business being complicated and presenting unforeseen difficulties (unforeseen by us anyway, I’m sure cleverer book sellers saw this a mile ahead down the road). As a result, we have to go a bit further for books – especially if we’re going to take advantage of the softening economy. Ebay is good, in person auctions (especially the kind that aren’t on the
Live Auctions at Ebay) are much better.
Make sure you have some good stock if Bush passes his tax rebate scheme (which I find a bit irresponsible personally, but am willing to suck it up and profit from it professionally). Tax rebates are like found money to most people, and book collectors spend found money on books.
If you rent a space for your books (be it a store or an online business – even if you’re at home and outgrowing your house and spouse’s good graces), look into buying a space. Prices should fall for commercial spaces as the economy slows, and you might be glad you sucked it up in a couple years when prices rebound (this will depend on your area – different parts of the country are in vastly different stages of popping the real estate bubble).
Continue to sell into those foreign markets. We’ve sold tons of books to Europe and Canada since the dollar tanked. A weak dollar is great for exporters – we used to complain incessantly about Japan artificially keeping the Yen low, now we complain about a weak dollar. Might as well enjoy it. We’ve had great luck with French and German books – mostly general stock in the 15-60 dollar range.
Finally, relax. Find a hobby, explore side items to sell, schedule buying trips to nice places and go fishing.
4268 Washington St.
Roslindale, MA 02131