Is It Worth Buying an E-Reader to Save Money on Books?

The e-book market has evolved since its early days in the late 2000s. Not only are pricing models substantially different, but some titles are now available only in e-book format. E-books tend to be cheaper than their print counterpoints, but e-books need a reader. Many readers are free—for example, Amazon offers a multiplatform Kindle app—but a dedicated e-reader device works for many people, if they're willing to pay for the up-front hardware cost.

2007 and the Best Seller E-Book

When the Kindle was first released on November 19, 2007, it retailed for $399 and Amazon set the price for e-book versions of its best sellers at $9.99. If we were to take $29.99 as the typical price for a non-fiction, new release best seller in 2007, then the math in favor of buying an e-reader is that you saved all-in costs after the 21st purchased book.

Using those economics, it's easy to see why many people, especially heavy readers, were excited about the growing potential of e-readers. Not only could they cart a library around with them, but they could save a ton of money while doing so. Then again, things aren't quite so simple.

The Price Gap Between Books and E-Books Narrows

Things have changed considerably since 2007. Amazon and other e-book retailers lost a battle with major publishers over that $9.99 new-release price and publishers now set their own rates for e-books. Offsetting the higher price for e-books, the price of e-readers has dropped substantially and you can now buy a Kindle for $79.99 if you don't mind advertising. So how does the math work out today?

Look at the first 10 titles on the New York Times Bestsellers non-fiction list, check the price for both e-book and traditional print versions on Amazon.com, and average them. For e-books, the average price was $12.17, compared to $17.80 for the average selling price of a paper version. The difference is $5.63, which is significantly lower than it was using the averages from 2007. However, the e-reader price is also substantially lower these days than in 2007. At $79.99, you'd need to buy 14 non-fiction best sellers in order to recoup your hardware investment, after which you are saving yourself over $5 each time you buy a book. While not as compelling a case as a few years ago, the math means buying an e-reader is still a pretty good investment for a heavy reader. 

However, the price of trade paperbacks tends to have a narrower price difference between the e-book and traditional book versions. Sometimes, the price for the paperback version might actually be lower than the e-book version, so it may take considerably longer for your e-reader to pay for itself. For example, using Amazon's pricing on the New York Times Bestseller list for fiction titles, the first ten average out to $13.59 for e-book versions versus $15.31 for printed copies, a difference of under two bucks a book. The payback period is much longer if these are the titles you usually buy.

Garage Sales vs. Free Classics 

Because most e-books can't be resold, e-reader owners miss out on things like garage sales, rummage sales and library sales; places where a box of paperbacks could be picked up for ten bucks. On the other hand, e-book retailers like Amazon.com offer a huge number of free, classic titles and they often offer heavily discounted titles from new authors to draw readers into a series. The difference is, those used books could be former best sellers and you're not likely to find many such titles on the $1 e-book list.

Free Reading Software

Complexifying the situation, Amazon offers free Kindle software for computers and tablets. Thus, a person can enjoy the entire e-book ecosystem without buying hardware at all. This approach may work for people with, e.g., an iPad or a Surface and who don't wish to buy yet another device.

Upgrading Your E-Reader Hardware

Finally, there is upgrading to factor in. Many people who bought an e-reader three or four years ago still use their device. However, as is the case with any electronics, every subsequent iteration brings new features and improvements, so some people end up buying new hardware. Whether they sell their old e-reader or pass it along to someone else, that does change the equation. If you upgrade before you've bought enough e-books to recoup the cost of your original e-reader, then you're in the hole and not saving money by going electronic.

But no matter how the math works in your case, you still have the satisfaction of books on demand in your pocket.