Books and FBA: The Perfect Combination

One of my favorite aspects about selling books on Amazon is the reactions from people when I tell them what I do.

A typical conversation:  

“So… what do you do?”

“Well, I’m a medical device sales consultant and sell hip and knee replacements.  Oh – and I also run a small business dabbling in books.”

“Wait… did you say books?  Like actual books with paper and stuff?  There surely can’t be any money in that… seems like everything is going digital these days!”

And that’s usually the extent of the conversation.  A few people grasp that there could be some money in selling used books, but the majority turn up their noses, laugh a little bit, and change the subject to something, well, more modern.

Maybe that’s still your mindset when it comes to selling books on Amazon.  Today’s post will aim to clear up some of those common misconceptions..  Before we go into detail on topics such as sales rank and the ideal technology setup for sourcing books, it’s important to understand two fundamental principles about this business:  namely, why are we selling books, and why are we selling them FBA (Fulfilled By Amazon).

Why sell books:  There is so much chatter online about getting rich quickly through Retail Arbitrage (RA), Online Arbitrage (OA), and Private Labeling (PL).  While there is some great money to be made on each of the above topics, they all involve a significant amount of risk to get started.  I may someday look at some of the above business models, but for now I’m having too much fun selling books.  Here’s why I focus on books:

  • Books are plentiful.  Seriously.  They’re seemingly EVERYWHERE.  I challenge you to find a thrift store or a garage sale that doesn’t have at least a few books for sale.  Most people view books as a liability, since they are heavy and they don’t think anyone will want them.  They usually end up donating them to a thrift store or listing them for free on Craigslist or a similar site.  Don’t believe me?  Jump on your local Craigslist site and type in “free books”.  You might be surprised at what you find!  (You’re welcome.)  Now, just because they’re free doesn’t mean that they are worth anything… we’ll cover how to spot value in a later post.  Once you start opening your eyes to potential book sources, you will start to see books all over the place.
  • Books are inexpensive (usually).  It’s not uncommon to find books for sale for 50 cents or a dollar apiece.  In fact, my average buy cost is just a hair over a dollar, and I’ve purchased thousands of books this past year.  A few thrift stores are starting to figure it out and charge $2, $5, or even closer to $10 for some select titles, but the majority of books are still relatively cheap.  When the average book in your inventory is selling for $15-$20, you suddenly don’t mind spending a dollar or two to acquire the book in the first place.  I challenge you to find another industry with margins as good as these!
  • Books are (still) in demand.  With all the items for sale on Amazon, books are still the number one category for overall unit sales  (it’s been estimated that 1 out of 6 items sold on Amazon is a book).  Whether it’s students looking to save a few dollars on textbooks, travelers looking for that bestseller to read while on vacation, or a gray-haired individual looking for that book that reminds them of their younger years, there’s something for everyone on Amazon.  There are over 50 million book listings on Amazon right now, with hundreds more being added every hour!  In the past hour, roughly 100,000 individual book titles sold at least one copy, and several thousand of those titles sold multiple copies (these figures are based on sales rank alone – I’ll explain this in more detail in a future post).  What are you waiting for?  There’s unparalleled demand for books out there this very minute.
  • Books are easy to research.  Forget about looking up brand names and model numbers on historical sales on eBay to try to judge the value.  A book’s ISBN (International Standard Book Number) gives you all the information you need, including the correct edition of the book and even if it has a softcover or a hardcover.  Nearly every book published after 1970 has an ISBN, and most recent books have the ISBN in a barcode form on the back of the book.  This allows for easy arbitrage opportunities, where you can know the value of the book BEFORE you purchase it.  It’s almost not fair, especially when you invest in some technology to speed up the research process (more on that later).
  • Books are easy to ship.  Sure, they’re heavy, but you don’t have to do any additional prep to them before shipping.  If you are shipping them individually, simply throw them in a padded mailer and off they go.  If you are sending them to Amazon’s warehouses (which you SHOULD be doing), they are relatively easy to package up into a larger box.  If they’re used, don’t even worry about a few dents and dings along the way.  By the time they make it through Amazon’s warehouse and through the FedEx delivery process, they will end up with a few additional dings along the way.  Don’t stress about packing your books with extreme caution… books are fairly durable.

Why sell via FBA:  Enough about books.  Hopefully I’ve convinced you that they are out there just waiting to be discovered and listed online for someone to purchase.  The next list will look at why you should sell your books via FBA.  Many people (myself included) are leery of sending their inventory to some massive warehouse where they could get lost or damaged, and then there’s all the other fees related to selling them FBA versus MF (Merchant Fulfilled).  Up until about nine months ago, I sold all of my books MF.  I was limited by the space available in my house and when I traveled for work (around 40% of the time), I had to put my entire business on vacation mode until I got back so I would be able to meet the shipping deadlines for each order.  I finally made the decision to switch everything over to FBA, and I haven’t regretted it for one second.  I wish I had made the switch years earlier!  Here’s why you should sell via FBA:

  • You can charge more for your books.  Sure, the fees may be higher for FBA (an $8 book will net you around $4 after FBA fees), but you can also charge more for your books.  A lot more.  Here’s an example from a book I sold yesterday:
Screen Shot 2015-08-21 at 9.25.54 AM


I sold the book for $24.95 when the lowest MF offer (in Very Good condition) was $4.03 with shipping included.  Someone paid an extra $20 to purchase the book via Prime and get it with free two-day shipping.  This happens more often than you think.  Oh, and I only paid 10 cents for the book.

  • You will have less competition.  In the above example, I was the only Prime seller among more than a dozen other sellers.  Rather than join them in their race to the bottom on price, I was able to maintain my price at a much higher rate than theirs and I still got the sale.  With FBA, you are not competing against the MF sellers.  This is a HUGE advantage when it comes to selling books.
  • You will open your business up to more customers.  Amazon keeps their facts and figures about their Prime customers close to the vest, but it’s estimated that nearly half of Amazon’s customers will ONLY purchase Prime items.  Why is this?  Part of it is due to the fact that they will get the item quickly with free two-day shipping.  Part of it is because they will deal directly with Amazon’s customer service department and receive no-hassle returns.  Part of it is they paid $99 per year to be part of the Prime program and they feel that they need to justify that cost by taking advantage of the Prime offers.  Whatever the reason, know that you now have access to more customers who are willing to pay a higher price.  It’s a win-win scenario (for you!).
  • You can sell your items worldwide with just a few clicks.  If you’re not taking advantage of the FBA Export program already, you’re missing out on some additional sales.  It’s not often for me, but probably around 2% of my items get shipped outside of the US.  Those are sales that I wouldn’t have made without this program.  You can sign up for it (it’s free!) by clicking here.
  • Your business can scale easily.  When I was selling MF, I ran into space and time limitations.  My inventory was at most around 500 items, and I had to package and ship out a few orders each night and also deal with customer service.  That was precious time that I could have spent hanging out with my family and friends. With FBA, Amazon is now your warehouse, your shipping department, and your customer service department all wrapped into one!  And you get all of these benefits for roughly 2 cents per book per month in storage fees.  It’s the best deal out there!  Now you can focus on sourcing and listing your books, and let Amazon deal with everything else.  I now have nearly 5,000 books in inventory and am steadily adding more every week.  This scale would have been nearly impossible if I were still operating the business out of my basement.
  • You have flexibility and freedom with FBA.  This is by far the greatest advantage of FBA.  Forget higher prices, more customers, and no warehouse leasing costs.  Every time I go on vacation, my business is still operating and Amazon is still depositing money into my bank account every two weeks.  I went on a family vacation last month that was more than 1,300 miles from home, and I sold enough books while away to more than cover the entire cost of the vacation.  Even when you’re not working your business can still be working for you.  Earlier this week I took the morning off to play a round of golf with a friend.  While I was playing, my business was running in the background and generating more than enough income to cover all the costs of my round of golf.  Here was my “view from the office” that morning:

Not a bad way to spend a morning!

Conclusion:  So there you have it.  A closer look at why I believe books and FBA are the perfect combination to create a business model that can fit anyone’s lifestyle.  My next few posts will go more into detail on understanding sales rank and also showing you the sourcing setup that I use to find books every week.  Stay tuned, and in the meantime go flip some books!

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