Students Find $100 Textbooks Cost $50, Purchased Oversea

Richard Sarkis and David Kinsley were juniors at Williams College, surfing the net for a cheap source for their economics textbook, when they discovered a little known economic fact: the very same college textbooks used in the United States sell for half price — or less — in England.

Just like prescription drugs, textbooks cost far less overseas than they do in the United States. The publishing industry defends its pricing policies, saying that foreign sales would be impossible if book prices were not pegged to local market conditions.

But many Americans do not see it that way. The National Association of College Stores has written to all the leading publishers asking them to end a practice they see as an unfair to American students.

"We think it's frightening, and it's wrong, that the same American textbooks our stores buy here for $100 can be shipped in from some other country for $50," said Laura Nakoneczny, a spokeswoman for the association. "It represents price-gouging of the American public generally and college students in particular."

But thanks to the Internet, more and more individual students and college bookstores are starting to order textbooks from abroad — and a few entrepreneurs, including Mr. Sarkis and his friends, have begun what are essentially arbitrage businesses to exploit the price differentials.

"We couldn't understand why what costs $120 here should cost $50-something there," said Mr. Sarkis, who, with Mr. Kinsley and another classmate, has spent three years building a Web-based company, BookCentral.com, selling textbooks from abroad to students in the United States. "It seemed so sleazy of the publishers. We were sure that college students would be shocked and outraged if they knew about the foreign prices. But it's been this big secret."

That is changing, though. To the despair of the textbook publishers who are still trying to block such sales, the reimporting of American texts from overseas has become far easier in recent years, thanks both to Internet sites that offer instant access to foreign book prices, and to a 1998 Supreme Court ruling that federal copyright law does not protect American manufacturers from having the products they arranged to sell overseas at a discount shipped back for sale in the United States.

Before the Supreme Court decision, Americans could not take advantage of the discounts abroad without violating the copyright law.

Now, however, "gray market" sales are taking off on campuses.

At one prestigious university, a sophomore imported 30 biology books from England this fall and sold them outside his classroom for less than the campus-bookstore price, netting a $1,200 profit. Next semester, if all goes well, he plans to expand the operation.

"The only difference is that they say `international edition' in little print on the cover," said the student, who added that he was not certain whether his project raised any legal issues, and therefore asked that neither he nor his college be identified.

At other colleges, Asian students have banded together to take advantage of textbook prices in Taiwan, Singapore and Malaysia, which are even lower than those in Europe.

Many students, individually, have begun to compare the textbook prices posted on American sites like Amazon.com, with the lower prices for the same books on foreign sites like Amazon.co.uk.

The differences are often significant: "Lehninger Principles of Biochemistry, Third Edition," for example, lists for $146.15 on the American Amazon site, but can be had for $63.48, plus $8.05 shipping, from the British one. And "Linear System Theory and Design, Third Edition" is $110 in the United States, but $41.76, or $49.81 with shipping, in Britain.

Many college bookstores, meanwhile, have taken matters into their own hands, arranging their own overseas purchases.

"I buy from Amazon.co.uk and from sources in the Far East, and I knew more and more students were doing the same thing, individually," said Tom Frey, owner of the University Bookstore at Purdue University, who sells the new books from overseas at the same price as a used American book. "Then this fall, for the first time, the Fed Ex man told me that the students at the Indian Association here at Purdue had just gotten a delivery of 14 skids of books, about 50 books each, from India. I think I'm losing about 10 percent of my sales to overseas books."

Relations between textbook publishers and college booksellers have been seriously roiled by the issue.
"This has become a very hot issue since last year, when it just seemed to explode all of a sudden," said Ms. Nakoneczny, of the college store association. The association's letter to the publishers warned that the pricing structure might be an antitrust violation. "The sale of identical books to foreign buyers at prices significantly lower than to domestic buyers, while publicly stating that domestic prices are due to high costs, could constitute an unfair or deceptive act," the letter said. While there is no longer protection in the federal copyright law for the pricing differentials, the major publishers are still trying to stop the reimporting of texts priced for foreign markets, mostly through contract language forbidding foreign wholesalers to sell to American distributors. Some have placed stickers on covers, saying "International Edition RESTRICTED Not for Sale in North America" or added the cover line "International Student Edition."

None of the three major textbook publishers — Pearson, McGraw Hill, and Thomson — would discuss why overseas prices are so much lower than domestic ones, referring all questions to Allen Adler, the lawyer for the American Association of Publishers.

"This is a season when textbook publishers get kicked around a lot, and they're feeling vulnerable," Mr. Adler said. "The practice of selling U.S. products abroad at prices keyed to the local market is longstanding. It's not unusual, it doesn't violate public policy and it's certainly not illegal. But publishers are still coming to terms with the dramatic change in the law."

Mr. Adler contends that foreign textbook prices are pegged to the per capita income and economic conditions of the destination countries — and that foreign sales are a boon to America's standing in the world, to foreign students seeking an American-quality education, and even to American consumers, since each extra copy sold overseas, even at a low price, helps to spread the high costs of putting out a new textbook.

As more and more customers turn to reimporting books, it is an open question how long the overseas price differentials will last.

"We buy from the U.K., France, Israel and the Far East," said Bob Crabb of the University of Minnesota Bookstores. "As long as the publishers are offering books at less than half the price that's available here, we'll take advantage of it. It's great for students. For publishers, the marginal costs of printing a few extra books and selling them overseas are very, very low. But I would guess that shortly, the sales here will begin eating into their U.S. sales in a serious way."

Disgruntlement over textbook costs has been growing in the United States as prices have risen. Last month, Senator Charles E. Schumer, Democrat of New York, announced that the average New York college freshman and sophomore spends more than $900 a year on texts — 41 percent more than in 1998 — and proposed a plan to make $1,000 of textbook costs tax deductible. The same week, University of Wisconsin students demonstrated against high textbook prices and in favor of creating a textbook rental system.

To be sure, textbook costs, however high, are only the final straw for American college students, whose tuition costs and fees have been rising rapidly. At Williams and other elite universities, for example, tuition, room and board now tops $35,000 a year. In Britain, though, the cost of tuition is largely borne by the government and students pay much less.

For example, tuition alone for undergraduates at Harvard is currently $26,066 a year as compared with $1,840 at Oxford University.

In the United States, one in five students does not buy all the required texts. And more and more, like Mr. Sarkis and Mr. Kinsley, are willing to go to great lengths for a cheaper alternative. "I got mad when I found out that our labor economics book was something like $90," said Mr. Kinsley, who, like Mr. Sarkis, graduated in 2001. "I didn't think I would read $90 worth in it, so I was determined to find something cheaper, and I spent five hours searching on the Web."