Where Have All The Half Price Books Gone?

10/7/2013

Torn, Ragged, Stained

Book stores are a dangerous place for me, as my wife knows all too well. My friends who have seen my overflowing home library know it, too. I have been in countless new and used bookstores across the country. I am a moth to the flame of a business sign that has the word "Books" on it (the word "Games" has a similar effect on me). My wife gave me a little pillow that says "Lord lead me not into temptation...especially bookstores" - She meant it as a joke...I think. Suffice to say, I consider myself a bit of a minor expert on book (and game) stores.

So let's look at one my favorite book stores. Half Price Books (www.hpb.com) is a chain of book stores based out of Dallas, TX that specializes in used and overstock books. They began in 1972 with a simple principle: great products at a great price. As their name implies, products are traditionally priced at half retail price or less. It's great going into a Half Price Book location, because you never know what treasures await. Even though they are a chain each location has a different selection since a lot of their stock comes from the local community. This gives them a unique draw over other book stores such as Barnes & Nobles. Every B&N is pretty much the same whereas every HPB location has something different to offer, and thus is worth stopping in to check out. I spend a lot of time and money in HPB locations throughout Houston and other parts of Texas.

Ridiculous Price

Now that I've given a big rah-rah, quasi-commercial for HPB let me beat them down a little. There are three sections that get most of my attention when I visit a HPB location: History, Sci-Fi/Fantasy, and Games. Traditionally, I've been able to find some good deals on used Games, especially RPGs. These deals have included both relatively new products and older, out-of-print items. Unfortunately, I've noticed a disturbing change in policy that happened sometime in the past few years. When I go into a HPB nowadays, more often than not, I find a lot of the games are marked above half cover price. Not only are they priced above half cover price, but often they have insanely high prices.

Apparently someone at HPB has decided that out-of-print RPGs and Board Games are now to be classified as collectibles and priced accordingly; i.e. the half price rule doesn't apply. Classifying them as collectibles isn't wrong, because often they are collectibles. However, collectibles are a tricky business. They usually require a fair amount of expertise on the part of the sellers. This expertise is even more important when you are in the business of buying collectibles for the purpose of reselling them and making a profit. You have to know what is truly rare versus just uncommon. You have to know what the general demand for the items are and have a reliable means to estimate market value. Items are only collectibles because the market has indicated that they are through prices that reflect excess demand for the items. The best determinate for prices are often auctions, because it is a very free market means to assess the value. In other words, you find out what people - "collectors" - are willing to pay for items.

HPB has decided to take a bass-ackwards approach to the economics of collectibles. Instead of basing their prices on true market values, they base them upon Amazon.com prices. People who are asking $50 for a 1st edition, 9th printing AD&D Player's Handbook (that has an actual market value of around $5-10) are now heavily influencing the prices at HPB. You can ask whatever price you want for a product, but you're only going to get what people are willing to ACTUALLY pay for it. Otherwise, I'd make a million bucks a year as a teacher (Come on, you know I'm worth it).

Now let us throw in another twist that is especially important to the business of collectibles: condition. Out-of-print games are just like comic books - the better the condition, or grade, the higher the price they can command. If you have a book with beat up corners, pages falling out, paint on the back cover, and it looks like somebodies cat peed on half the pages, then you aren't going to get anywhere near what a relatively pristine copy is worth. So those dealing with collectibles have to have some level of expertise in grading the items in question.

The problem for HPB is that they apparently have very little expertise in properly grading items they have bestowed the title of "collectible" upon. This is further compounded by an apparent total lack of understanding about how the pricing of collectibles works. The result is a situation that has several negative effects:

1. You take a simple business model - books at half price or less - that enticed customers to spend money and had them coming back to spend more, and you smash it. Why buy from HPB when I can find it cheaper on eBay? This factor has personally deadened my enthusiasm for visiting HPB. I used to have an incentive for dropping by my local HPB at least once a week (I don't have a problem...honestly), but now they're lucky if I go once a month.

2. HPB ends up with product that collects dust on their shelves. Storing up overpriced inventory doesn't pay the bills, so eventually this will effect their bottom line.

3. HPB ends up looking incompetent and greedy. Those who are looking to buy these "collectibles" see that HPB employees don't know how to grade products in general. Then they look at the prices and laugh, because they realize how overpriced the items are. This feeds issues #1 and #2 above.

Bottom line: HPB shouldn't try to be something it's not, because when they pretend to be in the "collectibles" business they end up hurting themselves. They need to leave the pretending to those buying and playing the games, and get back to what works: HALF PRICE BOOKS! It'll be a win-win for everyone.