Sunday, October 14, 2007

Popular Fiction: The Worst Depreciating Asset of All Time

So we've all heard the old line that a new car loses about 20% (this figure varies) of its value when you drive it off the lot. If you're like me, you think that's a terrible value proposition and you would never buy a new car. I have a used car that has been running very well for about 4 years now and I paid half of what I would have paid for a comparable new car.

If you think an item losing 20% of its value is bad, how about one that loses 99% of its value when you take it out of a store?

"WOW! What kind of an item is that?" you might be asking yourself.

Answer: a book, in particular a work of popular fiction.

Let's take an example. Check out the amazon page for Stephen King's Cujo.

Side note: Stephen King is on my short list of favorite authors.

If you were to buy Cujo new in a store, or on Amazon, it would cost you about $8. You take it home, devour it in two nights because it is that good, and then say to yourself "hey, what do I need this book laying around for? I hardly have enough room as it is. Let me try to sell it."

So you go online to determine what price you'd have to list it at in order to sell it. Look back on that amazon page I linked above. There are over 200 copies waiting to be sold by other people. The lowest price listed is ONE CENT, and there are dozens of copies listed for sale at that price (another side note, the way people make money off of those sales is on the shipping allowance amazon gives them. You'll pay them like $3.99 for shipping, but it might only cost them $2 to ship it to you so they can make like $1 profit if they got the book for free or paid very little for a batch of them. I think they also get a break on amazon's seller fee if they have an amazon store open).

So anyway, when you buy a book new, chances are as long as its not a new title, an out-of-print title, or something like that, it's going to lose 99% of its value when you leave the store with it.

You might argue that the value lies in the reading of the book, but I would argue back that you can get that value for free at the library. As much as I like Stephen King, I don't see the value in buying Cujo unless you have no other choice (for example, if you're stranded in an airport for a night with nothing to read). Just get it from your local library! Trust me, they have at least one copy of that book waiting there for you right now.

Some books don't face this effect, and therefore are probably worth buying. If you're really into a particular author or subject and you want to get a new release, chances are it won't be available in your library for a while and you might want to buy it. If it's some kind of a reference book that you plan to use for years, you might also want to buy it (I have some auto and home repair books like this). Finally, if it's going to be a family heirloom you might also want to buy it.

Otherwise, I highly recommend that you don't buy the worst depreciating asset of all time and instead just go to the library for your books. You won't regret it (unless the person who previously read your copy of cujo left some food on p. 83) and when moving day invariably comes, you will be thankful that you don't have to carry those two huge boxes of yellowing paperbacks that you haven't read in years.


Anonymous said...

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This site allows you to trade books with other people for free. The site is awesome and ADDICTING posting all those useless books you have and being able to pick from over 1.5 million other books!

Anonymous said...

What a dumb argument, how can you compare a book to a car?

If a book cost you 5 dollars and provided a few hours (or weeks as in stephen kings case) worth of reading entertainment then it was worth every penny.

Give it to a friend when done or to a charity shop!

Maybe you should compare a book with a starbucks cup of coffee - both can cost similar but one only last 5 minutes and cannot be given away when done!