How I sold a cheap bestselling book for $130 using a weird Amazon pricing loophole.
The day the American Sniper book shot to #1
One day, I saw on Twitter that the author of the book American Sniper died. That day the book shot to #1 on Amazon. And it stayed there.
Two days later, something happened that has never happened before and will probably never happen again: I was out sourcing, and found a copy of American Sniper – a book that was #1 on Amazon – used, for $1.
A glance at my 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 in my scanning app: The merchant fulfilled offers on Amazon were all for $30 and up. For an Amazon seller, this was a big, big clue…
Anytime you see merchant fulfilled offers for more than Amazon’s offer, that’s a clear sign of one thing only: Amazon itself is sold out. Meaning if you want the book, 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 on Amazon
This is a great situation for FBA 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 Amazon Sales Rank, the higher you can price the book above the lowest merchant-fulfilled offer. And an Amazon sales rank doesn’t get higher than #1.
How much can you charge for the #1 selling book in the world?
When Amazon sells out of a book, 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 stock. So I knew the window of Amazon being sold out was small.
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 this book 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 that have an Amazon sales rank this good.
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. You could probably get away with any price when pricing a #1 bestselling book.
I didn’t have to examine the question too closely. There were several FBA offers, and they were all at $130.
So I matched their $130 price. I wanted to take the money and run…
The race to get the book to Amazon before it’s back in stock
I ran to the UPS store.
Once there, I paid for overnight 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.
My offer was live on Amazon less than 48 hours later. Amazon was still sold out. And the book was still #1.
And my copy sold for $130 that day.
Three lessons from this victory
There’s no way to systematize the identification and sourcing of sold-out Amazon offers. But you can be prepared when they happen.
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 sales rank) immediately. There’s a good chance you should raise the price.
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.
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.
The #1 takeaway
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. An Amazon sales rank of #1 means you can get away with anything.
And I have $100 extra dollars to prove it.
Good story and I learned something I did not know before
I wasn’t planning on learning anything today.
My first mistake was when I clicked on this page.
Now I’m curious what else Peter has to say…
In the beginning you say that there were no FBA offers but then you say that apex_media was selling it as FBA. I’m confused.
Peter Valley says
Amazon changed their API in 2013 so apps no longer show all FBA offers. Only if they are (roughly) in the bottom five, price-wise.