Prompted in part by's decision to sell used trade books in 2004, the Book Industry Study Group commissioned a report in 2005 to determine the size and composition of the used book market. Those findings, released in fall 2005, confirmed the fears of publishers—that used trade books had grown into a significant market, with sales estimated at $589 million in 2004—while providing proof to retailers about the opportunity afforded by used books. But what has happened in the market since that study?

Despite their concerns, publishers have found few ways to stop used sales; in fact, while no new figures are available, the used book market for trade titles appears to have grown by double digits in 2006. The good news for publishers, however, is that the increase in used book sales has not resulted in the collapse of sales of new trade titles. Preliminary sales figures from the AAP show sales of adult titles in 2006 up slightly, consistent with gains of recent years. That's cold comfort for some publishers who speculated that sales could have been higher if not for the siphoning of sales by used books.

Abebooks and Alibris, two of the largest online marketplaces for used books, reported strong sales again in 2006, although Abebooks CEO Hannes Blum said growth had slowed from 30% in 2004 and 2005 to the 20%—25% range last year. Alibris COO Brian Elliott said growth there held steady at 25%. Both companies are privately owned, and no total sales figures are available. Amazon, the largest seller of used trade titles, declined to comment on the performance of used books, but a few numbers from its financial filings indicate that growth of used books may have slowed somewhat. Amazon reported that sales from third-party sellers, who sell a wide range of products, represented about 28% of unit sales in 2006, the same percentage as in 2005. The company also noted that revenue in its retail business grew faster than revenue from third-party sellers last year.

Blum speculated that the reason for the slowing growth rate at Abe was because the number of new people buying books online has slowed a bit. That was the only blemish either Blum or Elliott could find on prospects for used sales online. Both men agreed that consumers have become very comfortable buying used titles via the Web. Alibris commissioned a study, completed last November, that found 49% of book buyers who bought a book online within the year had bought a used book. Alibris's most active buyers fall into two camps, Elliott said—heavy buyers who appreciate the price and selection offered by Alibris, and bargain buyers who make price the top priority. Elliott insisted that selection is a crucial factor in Alibris's success, noting that its top 100 titles represent less than 3% of Alibris's sales, about the same percentage that B&N says bestsellers represent of its total revenue. Selection is indeed incredible. Elliott said that as of March 1, Alibris sellers had listed 496 million copies of books, representing tens of millions of both ISBN and pre-ISBN titles. Abebooks lists more than 100 million titles.

While online sales of used trade titles are growing, the picture is mixed for physical stores. Susan Siegel of Book Hunter Press, a publisher of guides to used bookstores who conducted a study of used books in 2003, said that while a number of used stores have closed, others have opened. "The situation is very fluid," she said. "People are looking at different business models."

One of those models is for bricks-and-mortar stores to use Amazon, Abe, Alibris and other sites to help sell their used titles online. McIntyre & Moore Booksellers of Somerville, Mass., has used various sites to sell online for several years. Dan Moore, co-owner of M&M, said that the increase in online sales had offset declines in store sales, until 2006. "Last year was pretty tough," he said. "Most people I know don't feel the Internet is a source of growth. Selling online is really only about comparative prices." And competition online is brutal. Chris Catchick, general manager of Encore! Books in West Lebanon, N.H., said that after flat online sales last year, Web sales are off a few points this year. "I'm seeing books out there for a penny that I'm trying to get $5.95 for," Catchick noted. But having no online presence can be fatal in the used book market. Jackie Smith is co-owner of Acres of Books in Long Beach, Calif., which her husband's grandfather opened in 1934. Though the company stocks 800,000 titles, it does not sell online and sales have been soft. Between competition from the Web and high rent, Smith said, she is watching the traditional used book business die.

The future is much different for the online marketplaces, however. Elliott believes that a number of new initiatives can keep Alibris growing at rates topping 20%. The company will expand overseas and also plans to upgrade the offerings and merchandising of the movie and music items it offers for sale. Blum sees Abebooks growing at about a 15%—20% clip in 2007. Abe, which already has a presence in many international markets, will open in Italy this summer. The company will also work to increase the profile of its site in North America. One strategy is to build clusters around different segments, such as cookbooks and science fiction.

Some brick-and-mortar stores are also doing well with used books. Hastings Entertainment, which began selling used books 18 months ago in selected outlets, cited the category as a bright spot in a lackluster 2006. According to used product manager Joey Middendorf, Hastings's stocks used and new titles side by side, adding that whenever a new book is put into the system, it automatically generates a listing for the used equivalent. Middendorf buys product for the stores in the chain that carry used books, and managers can buy used books for their stores. Used books represent about 15% of sales at Changing Hands in Tempe, Ariz. In addition to creating greater sales, one advantage of used and remaindered titles is that they allow stores to experiment in new areas without investing a lot of money, explained co-owner Gayle Shanks.

So what does all this mean to publishers? HarperCollins CEO Jane Friedman said that while used books is an issue that needs to be monitored, "it's not the most pressing issue of the day." The head of another large publisher was more concerned. "As long as Amazon has that button on their site, I'm worried," he said.