When the Book Market Turns - Lessons from Three Recessions

Sometimes "all kinds of books and a lot of them" is not the best strategy

[Caitlin Kiernan, Joe Hill, and other Subterranean Press titles just hit my website. Take a look.]

Danger Ahead?

We haven’t gone through a real recession in a long time. Seventeen years have passed since the last one, when the housing bubble burst in 2008. Five years ago this month, the steep COVID downturn looked scary at first but was quickly reversed by stimulus spending. In fact, most of us in the book trade did surprisingly well during the pandemic.

I’ve been thinking lately about what might happen if (when?) we next face a significant economic contraction.

I have a few talents, including a knack for making major career changes at precisely the wrong economic moment. I quit my good-paying government job to become a full-time bookseller in January 2001, just as the dot-com bubble was about to burst.

That recession technically ended in late 2001. The stock market didn’t get the memo and continued its downward plunge, eventually hitting bottom a year later. My business focused on institutional sales, so my personal downturn lagged the broader economy. Universities work on annual budgets, and the dramatic decline in stock prices (the NASDAQ fell an astounding 77% from its peak) devastated endowments and acquisition budgets for several years. By the time the economy was beginning to recover, library spending and my business along with it cratered. In 2003, I worked full-time and didn’t make a penny.

In another impressive display of economic tone-deafness, I purchased Eureka Books in December 2007, literally as the housing bubble was about to pop. I like to think I’d learned something because this recession worked out differently for me. We retooled and refocused the business and actually increased sales during the heart of the crash. The investments and improvements we made then positioned us for growth after the economy turned around.

When COVID hit, I had relocated to Portland, Oregon, from Eureka, California, and was finalizing negotiations to sell Eureka Books. When the deal closed, the store and every business around it in Eureka’s Old Town was shuttered. As a practical matter, I couldn’t have run the store remotely during the pandemic but it wasn’t a great time to sell a business. I had to start over in Portland with almost no inventory and no local customers. Thanks to all of you, dear readers, the last five years have been the best ones I’ve had since I started selling books in the early 1990s. No one is more surprised than I am.

My experience of these recessions had parallels in the broader rare-book market.

The 2001 crash exacerbated a massive structural realignment in the trade. For decades, the bread-and-butter of the specialty book business was the “fifty-dollar book.” These weren’t all exactly $50—some sold for more and some for less—but they were books that were always in demand and could be found in used bookstores for a few dollars. All competent antiquarian booksellers carried long lists of these books in their heads. You could buy them cheaply and mark them up 500% or 1000% in a catalog.

Book scouts and dealers who were willing to travel could support themselves finding these titles. A classic example was Charles Frazier’s 1997 novel Cold Mountain. It became a hot commodity in the first edition market. PBA Galleries sold a signed copy for $1,000 in 2002, and Sotheby’s got $1,400 for one in 2005. But in most used bookstores, it was just another recent hardcover, priced accordingly. If you knew to look for it, Cold Mountain wasn’t hard to find.

In addition to hypermodern first editions, lots of out-of-print nonfiction titles were easy to source and easy to sell for substantial profits. When the first online marketplaces like AbeBooks launched in 1996, it seemed like any book you listed would sell. Online orders poured in and consequently foot traffic at brick-and-mortar shops dried up. A lot of my colleagues, tired of sitting in shops six days a week, were happy for an excuse to close their stores and moved operations home.

During the 1990s boom, booksellers began aggressively buying for online sales and for a while did extremely well. Alibris, now an afterthought in the book market, was then the most ambitious site for used and rare books. Its marching orders for its head book buyer, funded with practically unlimited venture capital funds, was emblematic of the times: We want “all kinds of books and a lot of them, and we need them now.”¹

After a few years of buying, Alibris filled a warehouse in Sparks, Nevada, with books; like so many other booksellers at the time, they found themselves with more books than customers. The declining economy pushed dealers to catalog their stock for online sale, thereby worsening the problem.

The 2001 recession forced a painful reckoning. As dealers posted more inventory on the web, it became apparent there were far more books than anyone had realized. Those reliable $50 books became $40 books, then $30, and so on until many became virtually unsellable, even for a few dollars. Today, signed firsts of Cold Mountain sit online for $50.²

The recession forced booksellers to rethink their business models, and in many ways, the book trade never fully recovered. A lot of booksellers had to write off their inventories of $50 books. Open shops continued to decline, first by choice, then by economic necessity. Shops that stayed open shed employees and never returned to their old staffing levels. There are many fewer jobs in the rare book trade now than there were in 2001; most new dealers learn the business by doing rather than by working for a more experienced bookseller.

The 2008 housing bubble recession continued the trends, although with the dot-com bust so fresh in everyone’s mind, that recession wasn’t as scary. We all knew what to expect. That doesn’t mean it was a cakewalk, however. According to Rare Book Hub, auction prices fell 20% during 2008 and declined further in 2009 before beginning a long recovery. One dealer at the time neatly summed up the state of the book trade, “I was off by 25 percent and anyone who tells you it was different is a liar.”

The next recession during COVID actually worked out fine for booksellers. People were staying home and turned to books for entertainment and comfort. Antiquarian book dealers, despite booming business, received substantial stimulus money. As an example, the William Reese Company, one of the highest grossing dealers in the US, received $352.000 in PPP funds.³ The first Trump administration sent my wife and I nearly $60,000 tax free.

Collectively, antiquarian booksellers and their private clients received hundreds of millions in stimulus dollars, much of which wasn’t actually needed to keep doors open. By 2021, we were partying like it was 1999 again, when booksellers seemed like geniuses, able to sell most anything.

Then came another boost: the social justice movement following George Floyd’s killing prompted institutions to address gaps in their collections. Millions more dollars flowed into the book trade as libraries sought to diversify their holdings of African American, women’s, and LGBTQ materials. Add to this powerful mixture a stock market that has doubled in the last five years, and you have a market full of dealers and collectors with plenty of money to spend.

So far in 2025, the book market remains strong from my vantage point, but there are warning signs. Institutions are planning budgets for 2025–26, and universities are grappling with significant reductions in federal contracts and reduced overhead rates for scientific research. I’m hearing rumblings that acquisitions budgets will be tightened next year, as universities adapt to the loss of government funding.

Many of the federal programs currently being eliminated bought goods and services from small American businesses, the sort of companies whose owners are collectors. Those effects could ripple through the economy and eventually impact the disposable income that drives our market. One of my customers sold products to USAID for distribution overseas, but not anymore.

The biggest risk we face in the book trade is that we’ve largely forgotten how to navigate economic downturns. A whole generation of booksellers and collectors has never experienced a real recession, and those of us with longer memories have grown accustomed to relatively easy times. We’re out of shape, economically speaking.

If a recession does come, I’d offer these basic lessons from the past (as best I can recall them):

Collectors: Don’t sell unless you absolutely have to. For buyers, opportunities will present themselves from time to time, and those with acquisitions budgets will have the advantage over people needing to unload books in a declining auction market.

Don’t be surprised if dealers won’t lower prices on existing inventory. There’s a adage in the trade, “Sales go down; prices don’t.”⁴ Holding out for a higher price is a business strategy that has worked in the rare-book trade for centuries; a trough in the business cycle is no reason to change course. If a recession stretches on, booksellers may become more open to cutting deals, particularly on older stock.

Dealers: Cash is king, but those who buy well during difficult economic times recover fastest when easy money returns. Dealers with too much debt, excessive overhead, and thin profit margins will feel the squeeze most acutely.

As someone with an economics degree, I know that just talking about the possibility of a recession can contribute to causing one, so I want to be clear I’m not making any predictions. If my propensity to make major changes just before a downturn is real and not just coincidence, we’re all fine because things at Downtown Brown Books are the same as they ever were. And if I could predict economic trends with any certainty, I’d be trading stocks or commodity futures instead of old books!

But I do think it’s worth spending a little time to consider how we might navigate choppier economic waters if they arrive. A little preparation for a temporary reset of the economy can be useful, even if book collecting and bookselling has always been about taking the long view.

—Scott Brown, Downtown Brown Books

1. Taylor Bowie, a Seattle antiquarian bookseller, recounts his time as Alibris’s head bookbuyer beginning about minute 23 of this interview.

2. Permalink.

3. I don’t want to put any of my colleagues on the spot so I picked the Reese Company as an example. It has new owners and managers since 2020, so even if the firm has the same name, it’s a different business. In the original version of this newsletter, I only including one forgiven PPP loan. There were two, one for $170,700 and another for $181,428.

4. Our customers, particularly those who sell things for a living, find this hard to understand. Most businesses with inventories would rather sell with smaller profit margins than hold out for a hypothetical future sale at a higher price. I periodically check the business literature for an actual study on this question. I have yet to find one, so the following explanation is anecdotal.

First, booksellers make most of their money from things they buy that sell quickly. In our minds, those profits “pay” for the items that don’t sell right away. So even if our account books show money tied up in inventory, most of us don’t really think of it that way, and we’re in no hurry to recoup those funds.

Second, if a book fits our specialties, selling a copy only creates a need to find another one so why not hold out for a good price on the one we currently have?

Third, training collectors to expect a discount is not a good long-term strategy. Many buyers, having once received a discount, will expect them forever; and some of those people will stop buying from you completely if you stop giving a discount. This leads to dealers inflating prices to give discounts and that all gets ridiculous.