Introducing “Price Proximity”: How to exploit Amazon trade-in credit arbitrage to identify underpriced books you can sell for quick cash (and skip trade-in credit altogether)
Part III in a 5-part series on Amazon trade-in credit arbitrage
The biggest question I got after last week’s (huge) article on Amazon trade in was:
Why would you trade a book in for credit when you can sell it for even more cash?
I did address this point, but not very well. So let’s make this totally clear:
Amazon trade-in credit arbitrage appeals to a certain kind of risk-averse seller who wants quick results and minimal risk.
That may not be you (it’s definitely not me), but I’ve been talking about trade-in because I realize there’s a ton of Amazon sellers who simply can’t stand the uncertainty of Amazon price volatility and often long turnaround times. They want quick results.
What’s more, there are tons of people who don’t want to bother with being Amazon sellers at all: They want something fast without the infrastructure of a Amazon seller’s account.
This article is about how Amazon trade-in can work for both types. This is another trick (one of many) I’m talking about this week that I haven’t talked about anywhere before.
Do you roll your eyes at the prospect of hunting for Amazon trade-in? This trick is for you.
Price Proximity: How to use trade-in credit to get quick cash (and skip trade-in altogether)
Let’s get into a simple formula for using trade in credit tactics to identify severely underpriced books, and sell them for quick cash (either FBA or merchant fulfilled). This involves what I call “Price Proximity.”
Here’s the general formula (we’ll get more specific in a moment):
- Hunt for trade-in credit opportunity just like you would if you wanted trade-in credit.
- But instead, use the trade-in amount as baseline value which indicates you sell the book at a significantly higher number than the trade in amount.
- Sell the book and get paid in cash.
We have to re-establish an important point:
Trade-in value is always less than the true market value of the book. Otherwise, the amount Amazon is offering for a book would be lower.
So here’s how “Price Proximity” works:
Anytime you find a book in the trade in store that you can buy on Amazon or 3rd party site for close to the trade in value (say, within 20%), that’s a very strong indication it can be sold at a much higher value for quick cash.
In other words, a selling price that is within close proximity to Amazon’s trade-in price is strong indicator that book significantly underpriced. I.e. artificially low.
So as someone who wants to sell books for cash, what you’re doing here is using the tactics of the Amazon trade-in hunter to find these underpriced books, and convert them into extremely low-risk cash transactions.
The Amazon trade in value is generally more than 30% below the average selling price
I did a quick search in Zen Arbitrage for books with trade in value. Here’s a screenshot to illustrate the point (trade in value is the far right column, used prices on the left):
How do we know historically what a book’s “real” value is? A: Keepa
Of course, no one can predict the ultimate selling price. But we can look at historical data to make a calculated estimation about the lowest amount that book is ever likely to sell for, and hedge our bets using that as a baseline.
The answer to the question of a book’s “real” value is the Keepa browser extension. Keepa shows historical pricing data, including six and twelve month averages.
Let’s do a quick example to illustrate. What follows took me about 5 minutes to find (I cheated a little and used Zen Arbitrage to find this book. You don’t need fancy tools to do this. You can do it manually in the Amazon trade-in store.)
Step One: I skimmed books with Amazon trade-in value and looked for books that are selling for “close” to the trade in amount.
Let’s define “close” as within 20%.
I quickly found this book (screenshot from Zen Arbitrage):
Here’s the book on Amazon:
Trade-In Value: $125.
Lowest priced used copy: $109.63
Yes, this is lower than the trade in amount, and would be a prime candidate for old-fashioned trade-in credit arbitrage, except the $109 copy is described as having highlighting, and would likely be rejected by Amazon’s trade in criteria.
But this is absolutely a book we can sell for cash.
Step Two: I confirmed its price history
Here is the price chart from Keepa:
From this 12-month chart, we can confirm this book spends virtually 100% of its time above the price we can currently buy it for, and the vast majority of its time above $130.
Step three: Decide whether to sell Merchant Fulfilled or FBA
I don’t sell anything merchant fulfilled, so I already know my answer. But if this were you, you’d have to run the numbers and decide for yourself.
Obvious pros and cons are: MF has lower fees, FBA allows you to sell at a higher price.
Either way, with this book you’re making money no matter what. As we’re about to see…
So just to cover all our bases, let’s examine what our profits would be selling merchant fulfilled, and Fulfillment by Amazon (FBA).
Pricing option #1: Price at the six-month merchant fulfilled average.
Keepa delivers again. We can see the six-month average price for this book is $147.97.
Sales price: $147.97
Net profit: $13.79
Super-low returns here, but again, this is a move for people who want extremely low risk and quick turnover. I would say quickly selling this book for at least $147 is pretty close to a certainty. Not the option I would choose, but I’m just giving you all your options.
Pricing option #2: Price-match the current lowest merchant fulfilled offer.
This would be the most sensible move: Pricing the book at $154.95. The price may go down (or up), but it makes it a strong possibility you’ll be among the next few sales (even if the book does have some highlighting).
Sales price: $154.95
Net profit: $19.73
The average rank for the this book is about 260,000, which means this book averages a little less than one sale a day. This should mean a quick sale and quick $20 profit.
Pricing option #3: Match the lowest FBA price.
Sales price: $164.98
Net profit: $20.36
So you see here the FBA fees make the net profit roughly the same. Should still result in a quick sale.
There you go. By utilizing trade-in arbitrage search tactics, I was able to get some quick and low risk cash.
What just happened?
Very quickly, I used trade-in as a baseline figure, then looked for books selling within range of that figure (either a little more or a little less), knowing that anything priced close to the trade-in amount is severely undervalued.
So I used used “price proximity” and trade-in arbitrage tactics to find books to sell for cash – skipping trade-in altogether.
The lesson: Amazon trade-in value has two values – one explicit and one implicit
Explicit value: “The amount Amazon will give you in trade-in credit for this item.”
Implicit value: “An amount that is significantly below the true market value for this item.”
So again, for those who want to skip trade-in and go for cash, the trade-in value still functions as a an anchor price, allowing us to know that any book selling for close to that amount is artificially low and significantly underpriced.
The process, step-by-step
For people who love bullet points, here’s the process:
- Mine Amazon’s trade in store.
- Find underpriced books (or anything) by looking for a sales price close to the trade-in value.
- Optional: Search for even cheaper copies using BookFinder.com.
- Determine the historical average price for the item using Keepa, confirm the book is underpriced.
- Determine your potential net profits.
- Buy the book and sell for quick cash.
The tools and tactics of trade-in credit arbitrage is not just for trade-credit – they work for low-risk cash sales too.
Fun for the whole Amazon family.
PS: If you missed the announcement in the last article, here it is again…
My new trade-in credit arbitrage tool (which also works for cash, as we just saw) comes out next week. It’s called ZenTrade: A trade in credit mining tool that will blow existing $1,000 tools away…. for less than 1/20th of the price. (Get some free videos by getting on the early bird list here.)
One of the features I haven’t revealed yet:
“Price proximity” alerts. We embed trade in data (including historical data and more) on the page in the Amazon trade-in store, and alert you for all items where the sales price is within 30% of the trade-in value. This is a way to dramatically streamline the exact process we covered in this article.
So ZenTrade isn’t just for trade-in, you can use ZenTrade and Price Proximity alerts to find underpriced books and resell for quick cash.
How Zen Trade works:
- Install in your browser (one click).
- Go to the Amazon Trade In Store (any category).
- Surf the trade in store for opportunity (find trade in opportunity on Amazon or 3rd party sites). ZenTrade embeds trade in value (+ more) on the Amazon page.
- Find books cheaper than their trade in value.
- Alternately: ZenTrade alerts you to books with a price close to the trade in value, so you can sell for quick cash.
- Lock in the trade in value on Amazon.
- Buy the cheap book.
- Ship it to Amazon.
- Profit the difference in Amazon trade in credit.
- Current trade-in value
- Current Amazon price.
- Instant Amazon-to-Amazon trade alerts.
- Historical highest trade in value + date.
- Historical lowest trade in value + date.
- 12-month average trade in value.
- Percentage deviation from average (is it higher or lower than average?)
- One-click scan of over 40 other bookselling sites for cheapest copy.
- One-click scan of over 10 sites for highest instant trade-in value.
- “Cash Sale Probability Alerts”: see if Amazon price is close to trade in value (to find severely undervalued books to sell for cash)
- No-scroll trade-in mining: Profit totals displayed at top of every page.
- Video library with every trick for profiting off trade-in (with trade-in and cash).
Stay tuned for announcement in a few days and get on the early bird list.
PPS: There’s more trade-in articles coming:
- How To Profit Off Trade In Price Fluctuations: Exactly when trade in prices are highest, and lowest (I poured over the data, and I’ll give you the exclusive).
- How To Turn Trade Credit Into Cash: I’ll give a simple formula for Turning $100 in Amazon trade in credit into $500 (or $1,000). I know this sounds ridiculous, but I will deliver.
PPPS: Here’s are the first two articles in this series, again: