Tuesday, September 20, 2011

Withdrawals and Deposits (2)

In the previous post we looked at provisional estimates of the sale value of withdrawn library books in Business and Education. For convenience, those tables are replicated here, with comments following:

Business Titles

% of Total

SCS Withdrawal Candidates
Unmatchable: No ISBN
SCS Withdrawal Candidates w/ ISBNs
‘Culls’: no copies wanted
Unknowns: bad matches
Titles w/ possible list price $.01-$2.50
Titles w/ possible list price of $10+

Education Titles

% of Total

SCS Withdrawal Candidates

Unmatchable: No ISBN
SCS Withdrawal Candidates w/ ISBNs
‘Culls’: No copies wanted
Unknowns: bad matches
Titles w/ possible list price $.01-$2.50
Titles w/ possible list price  $10+

Consignment Selling 
Alibris, like many local book dealers, Better World Books, and other companies, offers a consignment program, through which titles can be sent in batch to its warehouse. Alibris lists the titles in its online database, manages sales transactions, and ships books to customers, sharing the proceeds with the library. Consignment is attractive because it allows the books to be moved immediately out of the library, and minimizes the amount of library staff time involved in the sale process. It also gives withdrawal candidates another chance at being purchased and used. And it may return some financial benefit to the library. 

Each vendor's plan probably works a little differently, and each will have its supporters. The key is that any book sale be handled in batch, with as much work occurring outside the library as possible. Many vendors can provide this service. For the sake of example, Alibris's plan works along these lines:
  • $1/title fee to list in their database
  • 70% of sale price is retained by the library/30% to Alibris
  • Batches of titles can be shipped to the Alibris warehouse (library pays shipping)
  • Minimum of 1,000 titles required

Costs and Benefits
These terms suggest that titles likely to sell for $2.50 or less are probably not worth pursuing, since it would cost as much to list and ship each volume as the library might realize in revenue--and of course not all titles would sell. At the higher end of the price spectrum, the situation looks a little more interesting. Titles that might sell for $10 would break down like this:
    • Sale price: $10
      • Alibris commission ($3)
      • Listing fee ($1)
      • Shipping/handling ($1)
That leaves a profit of roughly $5 per volume sold. In the combined Business and Education samples above, there are 1,703 such titles. If all of them sold for $10, the library would realize $8,500 in profit. If half of them sold for $10, the library would realize a profit of $4,250. [Please note that these are just convenient estimates. Some titles might sell for more, some for less. This is intended simply as a way to think through the possibilities.] From a financial standpoint, these 1,703 titles are the obvious sweet spot--the place where withdrawals would most likely yield deposits.

Of course, it is highly unlikely that any library's entire list of titles would ever be sold. Any sales dollars realized would have to be amortized across the cost of all units listed and shipped. In this example, the base problem is what to do with 14,347 withdrawn items. Listing and shipping 14,347 items would cost the library at least $20,000. Only 1,703 of these items are likely to sell for more than $10. Therefore, it does not make economic sense to list and ship all 14,000 items. Listing and shipping only the 7,214 items would cost closer to $10,000, and might help sell additional units, but probably at a lower overall margin per volume. Each library's strategy here must be based on whether the goals are primarily financial or primarily toward assuring another chance for as many titles as possible.

A Selective Approach
Clearly, this option is not appropriate for every library's situation, and probably not for all withdrawal candidates from any institution. Consignment sale makes most sense for the likely high-value items, where the library will realize a clear return after listing and shipping fees. In these examples, items with a likely sale price of $10 or more represent 10%-13% of the total number. The likely list price may make these candidates worth listing even if only 50% of them ultimately sell. Each library should analyze its situation carefully before proceeding.

Below the $10 threshold, the picture is much less clear. The likely lower-value books represent 87%-90% of the entire list. Those sold at $2.50 or less would represent a loss to the library, even if we don't consider their original purchase price or the library-based labor involved in preparing them for shipment. Titles without ISBNs or bad matches are of unknown value, but would still incur listing, shipping, and handling costs. Titles likely to sell in the range of $2.51-$9.99 would have some potential to produce revenue that exceeds costs. But the overall yield is likely to be relatively low, since all titles incur costs but not all titles will sell. From a purely financial standpoint, this range is marginal, but might look better if it were contracted to $5 or $7 at the low end.

The selective approach also leaves the question of what to do with the remaining books -- those that fall below the likely $10 threshold. In this instance, 12,644 books are in this category. Some libraries may find selling these unused books at a loss more tolerable than throwing them out. Some may prefer to dial the range back to $7 or $5. Some may prefer any chance at a sale, regardless of price. But that should be a conscious choice.

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