Wednesday, March 14, 2012

Judging a Book's Value

Perhaps the most important skill for an aspiring book dealer the ability to evaluate the profitability of a book. This requires a bit of practice and it is inevitable that there will be some losses on your part when you're starting out—and that you may sink money into some books that you can't move. However, with practice and a bit of systemic thinking, these losses can be mostly eliminated.

The key idea is to be able to balance costs and profits: sometimes books “look” valuable to the untrained eye (as in “of course this big, heavy leather book is expensive... it's big and leather”) which actually have little to no profit margin. Moreover, this guide assumes that you're—at least at first—not willing to risk considerable amounts of cash in acquiring single expensive books, it's better to spread your risk out amongst a larger number of less expensive books.

In order to determine whether a book is worth your while, there is a simple calculation of profitability that I like to use:

Profit = Quality – Condition - Cost

The first step is to evaluate the Quality of a book. This is an intangible estimate of how much it is worth based off of its history, rarity and desireability. There are a few factors that come into play here.

  • Age: Generally speaking, the newer the book the better the quality you will need to get a good price. I avoid books within the last 20 years unless they are pristine. Older books tend to have more value due to rarity alone.
  • Content: What is the book about? Is it a subject that a large group of people still find interesting? Unless the book is well-known, avoid mass-produced novels, even hardcovers. It may be useful to specialize in an area: are you knowledgeable about gardening? Or history? Learn about authors, movements and ideas in a particular area and you can better sell them.
  • Appearance: Is the book nicely put together? Are the images (if there are any) glossy and full color? Is the cover leather? A high quality book is worth more than a standard run. Generally speaking, avoid soft-covers unless their condition is “Like New” (see below), this is especially true for the small mass-market paperbacks.
  • Notoriety: Is the book or the author/illustrator well known? Famous authors can often deman higher prices simply because people are looking for them..
  • Edition: In general, earlier editions are better but don't assume a 1st edition means a valuable book (more on 1st editions in a future post). Avoid Book Club editions—they are usually identified by a note on the inside of the dustjacket.
  • Signatures/Inscriptions: Like 1st editions, signatures by the author (illustrator, etc) usually mean a valuable book—but only if anyone cares enough about the author to pay for their signature.

With these factors in mind, you have a rough estimate of what a typical buyer for you book would be willing to pay if you met up on the street and the book in your hand was in excellent condition. There are, however, mitigating circumstances, the first of which is the Condition of the book. This also has a few qualifying circumstances. Here you need to pick up the book and evaluate it physically:

  1. Spine: Look at the book from the side—carefully take off the dust jacket if necessary—is the spine straight? Is it creased? Are the pages tightly bound?
  2. Cover/Dust Jacket: The first question you need to ask is if the DJ is present at all—not all books have them but you can safely assume that any hardcover book printed after WWII had one with the exception of fancy leather-bound beauties (the kind with gilded edges). What condition is the DJ and the cover in? Is there shelf-wear (the incidental wearing at the edges that naturally comes from taking a book on and off a shelf)?
  3. Pages: Open the book, are the pages white and crisp? Is there discoloration or water damage? If the pages are falling out or badly damaged, chances are the book isn't worth your time. Is there writing inside the book? This is a bad sign, with the exception of a previous owner's name on the inside cover, other writing drives down value.
  4. Mold: Open the book to the middle and put your nose up close to the spine and smell. Do you smell mold?

Together, these elements of the condition combine to determine the condition category of the book: New, Like New, Very Good, Good and Acceptable. I will go over these more in a future post, but suffice to say that I avoid anything below Very Good unless there are some strong mitigating factors.

Finally, you need to think about costs—the mony that you have to lay out just to get the book to the customer.

  1. Shipping: How much will it cost to ship? You need to figure out roughly how much a book weighing a pound feels and looks—if you can eyeball this, you can judge how much it will cost to mail it. Don't forget the 75 cents for delivery confirmation.
  2. Purchasing: How much does the book cost to you?
  3. Online Costs: This is a sneaky bit of the calculation. Any website you use to post your books on will cost you. Some, like Amazon, can swallow a considerable portion of the profit. I will detail these costs when I cover the various websites available.
  4. Incidental Costs: Did you have to drive somewhere special to get the book? Does it require buying a peculiarly shaped box? These are important incidental costs.

This gives you a rough estimate of how much you must ask to simply break even on the book and does not include payment for your time.

These factors may seem a bit overwhelming at first, but with time you learn to judge. As a rough guide I begin my thinking like this:

Base Value of a hardcover
Published before WWII (1939)
Published before WWI (1914)
Beautiful appearance (e.g. full color, glossy images)
Each condition category below New
Online Costs
Shipping Costs for a <1 pound book

This means that for a book published in the last few years with the condition “New” (Quality $8 - $0 Condition - $6.5 Costs), has a potential profit of $1.50 before the cost to purchase it. I would not spend more than 50 cents on a book like this. Now, this is meant to be a rough estimate and it is very possible that you will make more on this book, but this guide gives you a way of guessing the profitability of the book while on a purchasing expedition and limit your losses until you get a handle on how much your books are worth.

Obviously, your profit margins are quite slim for many of these books—I am very happy to make $5 on a book. Of course, there are always gems to find, books that surprise (and disappoint) you. I have bought a book I estimated was worth $12 and come home to find it auctioning for $40.

Given experience and a larger cushion of profit in the bank, you can begin to take more risks and turn over more valuable books. However, even with highly rare books the basic calculation (Profit = Quality – Condition – Cost) remains fixed.

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