The current state of
In this article:
- Why
Amazon bookselling is a bad business to be in now. - Why
Amazon bookselling is a good business to be in now. - What the Coronavirus means for booksellers in the near and long term.
- Why
Amazon sellers are positioned perfectly for this new world. - A key reason book sales are about to go way up.
- Lots more…
Everyone wants to know: What does Coronavirus mean for
It’s a weird time, and I’m about to cover
Here’s what I’m not going to do: Talk about “What will happen to our revenue over the next 30 days.” (at least not very much).
It’s key to keep in mind that (unless you’re running a grocery store) – nearly every business is down this month. And possibly next.
So the question is not “are book sales up?” They may or may not be, but that’s not the question.
It’s possible we are entering a recession, and the next 6 to 24 months is what matters, not the next 3 weeks.
The more intelligent question to ask is: “Is selling books on
Spoiler alert: In much of what follows, I will make the case that the answer is “yes”:
Sidebar #1: A note on resilience
Any business needs to be able to weather some temporary turbulence. If it can’t, you’re not in the correct mindset to run a real business.
You simply have to be buffered against a little disruption. If you can’t handle uncertainty, the best options are a 9 to 5 job (or at least that was the case until this month), or bank robbery. Everything else with money is inconsistent.
Sidebar #2: The Coronavirus is very temporary
I’m not going to get into macroeconomic forecasting or some weird lecture about virology. I’m not an expert on either, and even the experts give so much conflicting advice that the only conclusion is that no one knows anything.
But here’s some facts we can agree on:
- Viruses come and go.
- The worst-hit countries are past the worst of it, and are now putting this behind them.
Cases in China and Italy have peaked, and they are coming out of this.
It’s hard to remember there will be an “after” when you’re in the middle of something. It’s also hard to remember that it will likely be sooner rather than later. But keep in mind: This will be behind us.
So let’s get into the state of
Why Amazon Bookselling Is A Bad Business To Be In Now
Bad Thing #1: Sources are closed.
Chances are that all of your sources are now closed.
This is a very double-edge sword: If booksellers can’t buy in brick and mortar, either can book buyers. (More on that in “Why
But unless you’re also doing the “online book arbitrage” model (which I do recommend), you’re likely finding you have nowhere to source right now.
Bad Thing #2:
This could be behind us in a matter of days, but as of this moment
So not only is it harder to source inventory now, even if you can get new inventory, you can’t ship it in.
The backstory: The total shutdown of retail sent the whole country onto
What can you ship in now? The official word is as follows: “household staples, medical supplies, and other high-demand products.” You’ll notice books are not on that list.
How do you know what you can ship in? Your Restock Inventory page on
After announcing that date, they pushed it back to an undetermined date while they continue to struggle to meet demand.
Will the FBA shipment freeze go on for a long time? Pretty close to zero chance.
First,
Personally, I have full faith the shipment freeze won’t last a second longer than needed.
Sidebar: It's a big internet myth that “Amazon has shut down Prime.” There are the usual clickbait headlines about "the end of FBA," but its all fake hype from unscrupulous bloggers and YouTubers. FBA orders are seeing delays, but a lot of orders are still shipping second-day. Fulfillment byAmazon isn't going anywhere. Prime benefits are at the core ofAmazon ’s value proposition, and they will fight to maintain it at all costs.
Bad Thing #3: Are
There’s conflicting evidence.
First, there’s actually some anecdotal evidence that book sales are up right now. In a recent thread in my private Facebook group, about 2/3 of people were saying their sales have gone up this month.
I didn’t want to be unethical and put this under this in the “Good” column, because the evidence is anecdotal (personally, my sales are down a little).
There’s no hard data on whether book sales have gone up or down. And a lot of people are seeing their sales down.
Hard to know which is correct. On one hand, people are at home and buying online exclusively.
On the other hand, people are cutting any spending right now that is perceived as discretionary or non-essential. Economic uncertainty = reduced discretionary spending
So are sales up or down? We don’t know.
One thing we do know: March is historically slow for book sales. Unreleated to Covid-19, but this is a slow month in general.
Why Amazon Bookselling Is A Great Business To Be In Now
Now the fun part….
Good Thing #1: All non-online options for buying books are closed.
This is the big, obvious one.
You’re in an online business… when no one can go outside. How cool is that?
I don’t want to celebrate the shutdown of all brick and mortar. Most small business are suffering a lot right now, and its pretty sad.
Yet the unfortunate state of the world does have a accidental side effect that benefits
Good Thing #2: Feeble
I love it when this happens: Any disturbance in the Force, and
In my (almost) 15 years of selling on
Between the shipping freeze, sales (maybe) being down, and general economic uncertainty, I expect a similar purge is underway now. (We saw this exodus when
One of the side-effects of
This
Good Thing #3: FBA prices went way down… then way up.
This one is hard to measure beyond the anecdotal, but three weeks ago it seemed like everyone was freaking out and doing reckless things to raise cash. Part of that was dropping FBA prices like crazy.
Over the last week (again, unscientific observation), it seemed like the lowball inventory sold through, and prices feel unusually high right now.
(Comment below if you have personal observations on this).
Good Thing #4: Books Are Insulated Against Obsolescence
There very few “safe” moves right now. Even fewer safer businesses.
In a time when everything is uncertain, the last business you want to be in is one that capitalizes on trends. This is a bad time to be in a “trendy” shiny-object business. (E.g. CBD oil, “house hacking,” etc.)
The only businesses that are safe right now are those that are (nearly) timeless. So what is second only to being in the food business now? Anything that is proven, sustainable, timeless, and will expand as we exit bunker-mode.
If you’re going to be in a business right now, it should be something either
- Totally innovative.
- Totally timeless.
Nothing in between.
To drive this home: Picture a house in 1920.
There are only a handfull of things in your home now that someone in 1920 would recognize. They wouldn’t recognize your appliances, your Alexa, your computer, or probably even your shower.
Books are one of the few common denominators between a home 100 years ago and today.
Books aren’t going anywhere.
(PS: Don’t say “ebooks.” People have been saying this for years. And ebook sales have been down year after year for a long time).
Good Thing #5: College Enrollment Is About To Explode
This is big.
After “trauma” or times of extreme uncertainty, people historically flee towards what’s safe (not what’s risky).
What this means is: Tough economic times send people running towards college.
“The recession saw a 33 percent increase in enrollment in two-year colleges from 2006 to 2011.”
That statistic is worth reading twice.
No one knows if we are head for (or in) a full blown recession, but I think a lot of people believe we’re headed that way.
I’ve been saying for a long time that a hugely disproportionate percentage of any booksellers business come from college students. I’m not just talking about the obvious sales of textbooks. I’m talking about all books.
The average post-college adult doesn’t read at all (sad but true), and I believe that WAY more of our books are going to students than we realize. I don’t think we can rule out that over 50% of our sales could be to customers in academia to one degree or another.
That means when college enrollment goes up, our sales go up across the board.
Again, not just sales of textbooks – all books.
A quick search for “Does college enrollment increase during a recession?” brought up these results on the first page of Google:
Institutions or businesses that will thrive are those that sell safety. And “safety” is at the center of the value proposition offered by colleges. Enrollment is going to go way, way up.
No one likes a recession, however…
It is paving the way for a virtually guaranteed increase in book sales over the next several years.
Good Thing #6: The World Is Not Going Back To Normal, It Is Going Online
Right now, every college in the country has shifted their classes to online.
Now that online classes are normalized, many will never return to a real classroom. The spell of a classroom has been broken, and the marginal utility of going into an actual classroom has been revealed.
And people who only go to school online, only buy online.
If we can accept my previous premise that a hugely disproportionate percentage of all book sales (not just textbooks) are from academia, moving all book sales online (vs a college bookstore) will mean a significant boost to our sales over the years to come.
The Verdict
If there’s a recession after this, you’re positioned perfectly:
- You’re in an online business.
- You’re in a (nearly) timeless business.
- You’re in a rare business that is poised to be stable or even grow in a recession.
The Takeaways
- People who plant seeds now for a post-virus world are ones who reap the harvest.
- Viruses come and go, and its already peaked in the hardest-hit countries.
- Feeble sellers are self-purging.
- All sales have moved online.
- Many customers will never return to offline purchasing.
- College enrollment is about to explode.
- As
Amazon FBA booksellers, we are positioned perfectly for the future.
And that concludes the 2020 “State Of The Union Bookselling Address.”
-Peter Valley
PS: Did I miss anything? Post your comments below.
PPS: Been laying low because there’s big things in the works. Every online arbitrage tool is going to have to shut down after our our new invention is unveiled. Get on the email list for the announcement.
Also, claim your free book:
Very interesting. This reminds me of Newton’s First Law, “An object put into motion stays in motion until acted on by another force.” Covid-19 is another force. We have moved into a new direction. We can’t see it as a dualistic thought. It is neither good or bad. Just another direction. Recognize the new direction and go with it.
Thank you, Peter! Most helpful and encouraging! BTW, my sales went up, way up in March!!
Awesome, that’s encouraging!
Hi Peter, very interesting article! As a brick and mortar store in Seattle that’s closed to foot traffic, and also selling FBA, I am seeing both sides. We’re doing pick up and delivery and it’s maybe about half as busy as when we are actually open, driven by customers with are inadvertently home schooling their kids now. My FBA sales are a little up for March, but for the first time I did the evil ‘one penny lower’ move. I do think we are going into a prolonged recession, so I’m preparing to increase my bargain sections, etc. I think the virus will be back in the fall, just in time for the election.. joy…
Very interesting to get both sides of this. (I’ll forgive you for the evil pricing move given the current state of things).
I haven’t been able to source for weeks (and it will be a few more weeks before I can) due to a knee injury, surgery, and now recovery. Honestly, I’ve thought about transitioning to a different online venture where I wouldn’t have to ever again have to get out and drive a ton in order to find heavy books to lug up my stairs to my apartment. I’ve been in the game for about 4.5 years, and this video/article has renewed my enthusiasm to try to stay in the business and not spend money trying to start something else.
Yes, booksellers are going to be ok but this situation is the reason why we should all diversify. In February after doing my taxes and taking a very good look at my FBA fees, I started transitioning away from FBA to MF and it’s payed off big time right now. My sales are great and I’m keeping more of the profits. Also, I’ve spent more time building my 20 year EBay business. Those of us they sell on multiple platforms are much better off right now. Do not trust any one platform because you never know what the future brings.
My sales are about the same but the orders aren’t being filled. Hopefully Amazon can get some help fast.
Sue, I’m a newbie. What is MF?