Online Book Arbitrage: Why Amazon itself is the best source of used books to resell in the world
Can you source cheap books directly on Amazon?
Everyone has their favorite Amazon or eBay niche. Mine is books.
Books have higher margins. They’re everywhere. And they’re cheap.
Most Amazon sellers source books the “normal” way: Library sales, garage sales, etc. For years I practiced that model exclusively. And I did well, with Amazon sales into the six-figures.
It was hard. It was dirty. It was physically taxing. And, after several years, I learned: It was totally unnecessary.
The system you’re about to learn
In this article, I’m providing a step-by-step system to find cheap books on Amazon that you can resell back on Amazon for a profit – without leaving your computer.
This can be a side hustle you do while watching TV, or it can be a serious business (my biggest student did $99,000 in a month. See a screenshot of his sales here).
When you finish this article, you’ll be able put these steps into practice immediately.
Why you don’t have to leave your house to run an Amazon business
A couple years ago, I developed a system I call “online book arbitrage.” The premise is this:
Buying cheap “merchant fulfilled” books, shipping them into Amazon at a higher Fulfillment by Amazon (FBA) price, and profiting the difference.”
Here’s an example:
A book you can buy for $13.99:
And resell FBA for $49.99:
There are hundreds of thousands of books like this on Amazon right now.
It sounds totally insane to buy something on one site, then relist on the same site and profit, but it works.
How is this possible? Let’s break it down…
The magic of FBA “pricing leverage”
The premise of this weird profit loophole is something I call “pricing leverage” (you also hear this referred to online as the “FBA price bump”).
In simple terms, Amazon Prime subscribers (and many non-Prime subscribers) are willing to pay FAR above merchant fulfilled prices to get the benefits of an FBA offer.
Sometimes insanely more. Like $30, $50, or $100 more. Seriously.
This allows you to buy the cheap non-Prime offer, then relist at a higher FBA offer and profit the difference.
Yes this works.
Top 5 reasons you can resell a merchant fulfilled (MF) book FBA at a profit:
- Prime loyalty: There are over 100 million Prime subscribers: Each of them feels a need to justify that subscription by buying Prime-only offers.
- Free shipping: That Free second day shipping is a huge driver of sales.
- The “Buy Box”: FBA sellers get priority, and many buyers don’t look further than the Buy Box.
- Hassle-free returns: Customers choose Prime offers because they know they know returns are easy.
- Trust: Amazon has spent years building trust with customers, and all that trust gets transferred onto FBA sellers, leading to more sales at higher prices.
Here’s the biggest factor of all:
“The majority of Amazon customers have never purchased a non-Prime-eligible offer.”
Most Amazon customers – Prime subscribers or not – simply won’t buy non-FBA offers. This is big.
The cumulative effects of all these Prime perks are that FBA sellers can charge way, way more for our offers.
Forget if this “makes sense” – it works.
Let’s make some money…
Here are the steps
The entire process is simple: Comb Amazon looking for books with big gaps between the merchant fulfilled price (the “cheap” price) and the FBA price (the price you can sell it for). The entire hunt for profit is based around that concept.
Here are the abridged steps:
- Choose a narrow search category that points to textbooks (Not required, but I recommend starting with textbooks).
- Start scanning the results.
- Analyze the sales rank: confirm it’s a fast selling title.
- Analyze the price: Look at the price you can pay vs the price you can sell it for.
- Buy the book.
- Relist at the higher FBA price.
Let’s go more in-depth…
Step #1: Go to Amazon’s “advanced search” page
From the Books category, go to the Advanced Search page (below the search bar, on the left).
Step #2: Set your title keyword
Pick a word or term that would only appear in the title of a textbook (e.g. “surgical nursing”). Online book arbitrage works for all books (not just textbooks), but it works best with textbooks, and I want you to get quick momentum.
Step #3: Set publication date
Set to 2010 or more recent.
Step #4: Set the book format
Chose paperback or hardcover. It doesn’t matter which – we’re just trying to eliminate Kindle from the search results.
Step #5: Hit search
Step #6: Sift through the results
There is certain data we can see in the Amazon search results, and certain data we can’t see. Since we can’t click over and investigate every book, so we need to examine the data we can see for books that meet the following standards:
- A high Amazon price. You can’t price higher than Amazon and expect to get a sale, so the higher the Amazon price the better.
- In your price range. The more you’re willing to pay, the easier it will be to find profitable books.
- A low number of offers for sale. The lower this number, the more likely it is to have profitable FBA offers. I like to see this number at 75 or less.
Step #7: Start clicking
For every book that meets all three criteria, click over to investigate the book further.
Step #8: Look at the Amazon sales rank (aka “best seller’s rank”)
When you’re starting, keep to books ranked 500,000 or better. 500,000 is considered a terrible rank in all other categories, but in Books it’s actually a great sales rank.
Step #9: Click to view FBA offers only
On the Offers page, you’ll see a “Prime” filter. Click that to view FBA offers. This is where we learn what we can sell the book for.
If buying at the cheap “merchant fulfilled” price and reselling at the FBA price leaves room for profit, we have a winner.
Step #9.5: Look for cheaper copies on other sites (optional)
Run the book through a price comparison site link Bookfinder.com. This scans over 40 other bookselling sites for the cheapest copy anywhere on the internet.
This will save you money almost half the time.
Step #10: Buy the book
Have the book shipped to you, relist it, ship it into Amazon at the higher FBA price, and profit the difference.
Simple as that.
Not every book is going to have profit. Not every 20 books is going to have profit. But there are hundreds of thousands of books that will. And you can to do all of this without leaving your computer.
(I go into more detail with screenshots of a real search in my free book, Online Book Arbitrage)
How to analyze your books
How do you know what books to buy? This part is simple. The book just needs to pass this three-part test:
- The Amazon sales rank test: To start, I recommend keeping your purchases to a rank of 500,000 or better (a lower number). Anything in that strata is a fast-selling title.
- The condition test: Ideally you’ll buy a book in Good condition or better. Buying Acceptable condition books can be fine, just scrutinize the condition description closely and avoid anything with water damage or broken binding. (A lot of the time Acceptable condition books arrive in Good condition or better, which is a nice bonus).
- The profits test: Look at the price you’re going to pay, then the price you plan to list it for, then run those numbers through Amazon’s revenue calculator (link). (There are several free browser extensions that will do this for you as well).
If all these factors check out, you have a winner.
Online Book Arbitrage is a not a “trick” or a “hack”
There’s a lot of weird unsustainable gimmicks being taught online, but this is not one of them.
When you’re selling a book for $80 that you paid $40 on the same website, at first it will feel like you’re exploiting some weird loophole. But this is not a “trick” or “hack.” Online book arbitrage relies on sustainable principles.
As explained above, you’re adding tons of value for your higher FBA price. You’re taking a cheap book with lots of downsides, repackaging it with Prime benefits, and charging a premium for your efforts.
You are adding value to low value books.
Remember: First thing you’re doing is buying a merchant fulfilled book. From the Amazon customer’s perspective, merchant fulfilled has tons of downsides:
- Slow shipping.
- Uncertain return policy.
- Risk of no tracking number and the book never arriving.
- Fulfilled by a seller you have no reason to trust.
Then you’re turning around, and “repackaging” that book with tons of perks:
- Free second day shipping.
- Amazon’s no-hassle return policy.
- Guaranteed tracking number.
- Amazon’s built-in customer service.
- Amazon’s built-in trust.
…and more. These perks are worth a LOT to many millions of Amazon customers. And they’re willing to pay a premium for them.
So you’re not “exploiting” a “loophole.” As an FBA seller, you’re simply adding value.
But isn’t this against Amazon’s rules?
Let’s discard a pervasive myth: That buying on Amazon and reselling back on Amazon violates Amazon’s terms.
100% not true.
This rumor stems from a rule Amazon does have: It’s technically against the rules to buy a Prime-eligible offer and resell FBA. But that doesn’t affect us, since the entire premise is buying non-Prime offers, and reselling FBA.
Online book arbitrage is 100% compliant with Amazon’s rules.
You may be wondering: Why are we limiting ourselves to books? Why not grocery or CDs or something else?
Simply put: There are more cheap copies of individual books on Amazon than any other category.
Intra-Amazon arbitrage can work in other categories, but the most opportunity is with books. With other categories, you’ll notice the FBA and merchant fulfilled prices tend to be much closer together.
The market is flooded with cheap non-FBA books. And that’s great news: It means there’s lots of cheap books from third party sellers, which keep prices down and create these MF/FBA profit gaps that we can profit from.
Your online book arbitrage toolbox
There are millions of widgets, extensions, and tools to aid with online arbitrage. I’m going to keep this simple for you. Install these two:
- Keepa: Free pricing history charts. (browser extension).
- FBA fees calculator widget: Calculate your profits without leaving the page (browser extensions: there are several free ones)
Profit hacks: How to boost your profits
Once you get the basics down, here’s how to optimize:
#1: Be willing to pay more
Bottom line: The more you’re willing to pay per book, the easier it will be to find profit.
If you’re a bookseller shifting from offline sourcing where you’re paying $1 per book, this will take a mental adjustment. Profitable books priced below $10 do exist, but plan on spending an average of $25 and up per book.
Higher cost per book, but higher returns.
#2: Know how to spot textbooks
Online book arbitrage works for all books, but textbooks tend to be the most profitable. If you know how to pick search keywords that point to textbooks, and know how to spot a textbook based on its cover image, you have a big advantage.
#3: Don’t go for the most well-ranked books
Everyone wants the book with an Amazon sales rank they of 1,000 can sell for $100 profit. Those books exist, but even a book ranked 700,000 isn’t a slow-selling book. Relax your sales rank parameters outside just the most high-demand books.
#4: Accept lower margins
When I first began sourcing online, this was the hardest one for me to accept. With offline sourcing, I was used to getting 300% returns all day long. With online book arbitrage, you’re going to spend most of your time in the 50% range.
I call this the “source in your pajamas luxury tax.” I’m willing to give up some of my profits for not having to leave my computer, and having a virtually limitless supply. Are you?
#5: Don’t be deterred by the presence of low-ball FBA offers
Often that lowest FBA offer will sell out, and your higher priced offer will be next in line.
#6: Search for cheaper offers on other sites.
Use a site like BookFinder.com to automatically scan over 40 other bookselling sites. You’ll find a cheaper copy than what’s on Amazon almost half the time.
How to profit without every seeing or touching a book
There is a way to make this an entirely virtual business, where you buy books online, have them shipped to Amazon for you and the money shows up in your bank account – all without having to see or touch inventory.
The secret to making this business 100% virtual is what are called prep services.
Prep services receive books on your behalf, inspect them, and ship them to Amazon for you.
The bad news: Prep services who will work with booksellers are hard to find. Most prep services simply don’t like dealing with used books, and the ones who do are often closed to new clients.
Prep services allow you to source inventory from anywhere: A cruise ship, Starbucks, or any country in the world. They are the “missing link” to a bookselling business you can run from anywhere.
Taking action: How to get started with online book arbitrage
I packed as much I could here in the space I had, and I want to leave you with a tool I created that partially automates the process of online book arbitrage. It’s the world’s first online book arbitrage tool that partially automates the process of finding cheap books to resell for big profits.
I built Zen Arbitrage for myself after months “hunting and pecking” through Amazon. This took my search for profitable books from two or three an hour to 10 or more.