How I sold a $15 book for $130 with Fulfillment by Amazon.
The American Sniper film – based on a book – came out this week. I don’t really watch movies, but I do know it’s the #1 film right now. And it reminded me of a major coup I pulled almost exactly two years ago.
Two days later, something happened that has never happened before and will probably never happen again: I was out sourcing, and got American Sniper – a book that was #1 on Amazon- used, for $1.
A glance at the scanning app showed Amazon was selling the book for roughly $15, with no Fulfillment by Amazon (FBA) offers. The natural move would be to list the book at 25 cents below Amazon’s price, ship it in, and watch it sell the moment it hit the Amazon warehouse.
The $100 detail I almost didn’t notice
Then I spotted one detail: The merchant-fulfilled offers on Amazon were all for $30 and up. I knew what this meant….
Anytime you see merchant-fulfilled offers for more than Amazon’s offer, that’s a clear sign of one thing only: Amazon itself is all sold out. Meaning if you want it, you have to get it from a third party Amazon seller.
You’ll see this often when there is an unexpected surge in demand for a book that the publisher didn’t anticipate, and the book simply isn’t available.
This is a great situation for Fulfillment by Amazon sellers, when it happens. For one, it drives the prices for all offers up. And two, it eliminates the one Fulfillment by Amazon (FBA) competition you can never compete with: Amazon itself. That means there is literally no price ceiling, and the better the book is ranked, the higher you can price the book above the lowest merchant-fulfilled offer. And an Amazon sales rank doesn’t get higher than #1.
Pricing a #1 ranked book on Amazon: How high of a price could I get away with?
When Amazon sells out, it doesn’t sell out for long. Amazon knows it’s losing out on a ton of money, and it’s doing whatever it can to get that book back in print. So I knew the window of Amazon being sold out was a small one.
The question was: How high could I price a #1 bestselling book and expect it to still sell? If I didn’t have to fear Amazon getting copies back in stock, I would price it at $250, knowing that someone would (eventually) pay that much to get the next-day or second-day shipping. Don’t ask me why anyone needs a book from Amazon that urgently, but it happens all the time. Especially with books ranked this well.
A book ranked #1 on Amazon is selling thousands and thousands of copies a day. At that volume, it is a virtual certainty that there is at least one person a day who is so desperate to get the book next-day that they’ll pay $100+ dollars more for it. Or, someone for whom money is literally no object and can pay $100+ more just to get it a little sooner. I could probably get away with anything when pricing a #1 book.
I didn’t have to examine the question too closely. There were several Fulfillment by Amazon (FBA) offers, and they were all at $130. Ironically, they were all from apex_media, possibly the biggest FBA mega-seller, who foolishly price everything at a flat $3.99 above merchant fulfilled offers.
In this instance, either by a fluke or a rare and conscious effort to capitalize on the pricing leverage Fulfillment by Amazon offers, they ignored the $30 MF offers and priced $100 higher, at $130.
So I matched the $130 price.
The clock starts ticking…
…then I ran to the UPS store.
Once there, I sent it overnight, next-day shipping to the Amazon warehouse. I think it cost $30. The reason I did this should be obvious: I needed to get it up on Amazon before Amazon itself got more copies back in stock.
And my copy sold for $130 that day.
There’s no way to systematize the identification and sourcing of sold-out Amazon offers. But you can be prepared when they happen.
First – and this is a long shot – but if an item enjoys a sudden surge in media attention, and you have it in stock, you should run to your computer and check the price (and rank) immediately. There’s a good chance you should raise the price.
Second, if you notice Amazon is sold out of a book, and you don’t have a copy yourself, that’s a cue you should immediately start combing the internet for other copies you can flip on Amazon for a huge profit.
Third – and this is a more regularly relevant scenario – take note when listing if the merchant fulfilled offers are higher than Amazon’s price. That usually means Amazon is sold out. Clicking over to the product page will confirm (It will read “Temporarily out of stock” in Amazon’s listing). Price accordingly.
Above and beyond all else, learn to develop a feel for the relationship between Amazon sales rank and how high of a price you can get away with. With this book, it should have been obvious. A rank of #1 means you can get away with anything.
And I have $100 extra dollars to prove it.