Interviews with 4 Amazon sellers doing “online book arbitrage”

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Four interviews with people doing online book arbitrage, where I ask: What’s the best trick you’re willing to share?

Update: I’m no longer directly involved in the day-to-day operations of Zen Arbitrage, the book arbitrage tool mentioned in this article.

The latest in my series on “online book arbitrage”

You either love it or you hate it.

Over 450 people showed up for my free webinar recently, on the subject of online book arbitrage. It ran 2.5 hours (including 90 minutes of Q&A and other shenanigans). I’m not posting the recording or doing any replays, but if you missed it, I have some good news. (More on that in a second.)

Previously I “came out” about my journey going into this little-known but emerging practice of buying cheap books online, and selling them at a much higher price with Fulfillment by Amazon (FBA).

And today, I’m going to stop talking and let some other people take over with this post: “Online Book Arbitrage: The Interviews.”

Even though this “buy low online, sell high FBA” thing felt new to me when I started, turns out I’m hardly a pioneer. Quite a few people came out of the woodwork and introduced themselves to me since I began talking about it in recent weeks.

And four of them were generous enough to answer a few questions for this post.

Consider this a brief primer on online book arbitrage

What follows are 4 short interviews with devotees of an emerging practice: People buying cheap books online, and selling them at a higher price via FBA.
Within this framework, there are quite a few models – and I’m learning about more every day.

It seems like every methodology, no matter how crude, is being used with success right now. (And before I had some custom software built for this purpose, my methodology could not have been more crude.)

Of the five people interviewed here, some are newer and have accumulated some cool tricks very quickly. Others, I’ve been told privately, have some seriously advanced tactics that they aren’t willing to divulge fully here, but are still sharing some cool tricks you can get started with.

I’ll let this tool speak for itself. To see a video of how it works (and apply for access), head over here: Preview “Zen Arbitrage”

But really, you don’t need any advanced tools to get started. Check out these interviews to get the gears turning.

Online Book Arbitrage: The Interviews

Interview #1: Sean

How did you get turned on to the idea of buying books on Amazon, and reselling back on Amazon via FBA?

It all started when I found out about Nathan Holmquist from booktothefuture.com. I can’t remember exactly how I heard about him. I believe it was on an episode of the Thrifting for Profit podcast by Debra Conrad. After I heard that he sells books on Amazon I decided to learn more. I couldn’t believe he makes a full time income selling books on Amazon. It’s amazing! I read his blog posts to learn about guidelines he uses to select books.

I was in the dark for a while about Peter Valley, but when I found out about his success and blog I knew I had to read more. Finding more people making a full time income selling books on Amazon encouraged me to keep going. I started spending more money and taking more risks. Additionally, their blogs gave me more knowledge about sourcing and to this day keep me going.

Can you tell us a little about your approach to online book arbitrage? I’ve heard of several methods. What’s yours?

My approach to online book arbitrage is to use eBay to search for books and then go over to Amazon to see if they are profitable and within my sales rank guidelines. I originally tried doing Amazon to Amazon flips but it was very time consuming. For me, using eBay’s search filters helped me target books quickly. For example, you can go to the eBay textbook section and limit the price of the books to $5 or less with free shipping.

That way you can automatically filter through anything you don’t want and only pick the books that meet your criteria.

What’s your personal buying formula, in terms of profit margins, sales rank, etc?

Here’s my personal online book arbitrage buying formula at this moment:

1. I spend no more than $70 daily and aim to purchase books that equal at least $150 profit. My logic is that if I source books worth $150 profit I will sell 70% of those books in two months or less. This gives me an estimated $100/day ($36k annually). I use this estimation to hedge risk. I will alter this methodology as I collect data and hope to scale it quickly to make more profit.
2. I target books with a sales rank of <1 million because I want to flip them as fast as possible. When I’m able to pursue this full time I will test longer investments.

What’s the biggest mistake you made at first, that others could learn from?

My biggest mistake was not using sales rank as a factor in my purchasing decisions.

Now I have books with a 13M sales rank that might not ever leave the warehouse. For beginners I recommend a sales rank of 2M or less (less is always better). That way you can see results quicker and validate the business for yourself. There’s nothing better than opening your Amazon Seller app and seeing sales. That in itself should give you the push to go bigger.

What’s the best online book arbitrage trick that you’re willing to share?

I’ll give two tricks because I feel these are both equal in value:

1. If you find a profitable book using specific filter criteria on eBay, copy and paste the URL of that search and put it in a document somewhere. That way when you source again you can just paste the URL into the web browser and it will take you directly to that search. This saves a ton of time and increases the chance that you’ll find a profitable book quicker.
2. Analyze your previous orders in Amazon Seller Central and see if you can buy more of those books you’ve already sold. This is great because it’s already proven that the books will sell. I’ve done it before and I’ll do it again.

Interview #2: Mike Monticue

How did you get turned on to the idea of buying books on Amazon, and reselling back on Amazon via FBA?

I actually heard an NPR podcast about a guy who had software developed for textbooks. He would buy textbooks during “down” periods when the prices were lower,
store them and sell them Merchant Fulfilled during peak seasons at huge markups. I figured if he could do this Merchant-Fulfilled and be profitable – the potential of selling these books on FBA had to be even higher!

Can you tell us a little about your approach to online book arbitrage? I’ve heard of several methods. What’s yours?

Common sense would tell you to search the top-ranked books on Amazon and try to buy these low. Usually though, the very high ranked books are still very expensive – even when sold merchant-fulfilled. Since I don’t really know any tricks to finding lists of books ranked in the range I’m looking for – I’ll usually double check any textbook that I happen to be listing that fits my criteria and see if there are cheap copies available.

I’ll also pull a spreadsheet from InventoryLab and go through books I have in inventory or sold in the past and that gives me several hundred books to choose from
and search through for lower priced copies.

What’s your personal buying formula, in terms of profit margins, sales rank, etc?

Since I’m not buying a large quantity of books – I like to have huge markups – somewhere around 5x my buying price. As far as sales rank – I love to be in the 100K-300K range but I’ll go higher if the markup is good. I’m not too concerned with sales rank because I figure if a book is ranked 750K in the off season, it’s going to climb way up during peak seasons.

What’s the biggest mistake you made at first, that others could learn from?

I’ve been taking this slow so I haven’t really made any mistakes yet. I also had previous experience flipping other products that I buy online. I would definitely advise to start off slow and develop a system before you pour a ton of cash into it.

Interview #3: Jason

How did you get turned on to the idea of buying books on Amazon, and reselling back on Amazon via FBA?

When I began to notice price discrepancies on books large enough to profit from with a rank low enough that I knew I could sell it. I asked people in a Facebook group and most of them said they wouldn’t pay that much for a book but I looked at it not as a book but as a product with an ROI.

Can you tell us a little about your approach to online book arbitrage? I’ve heard of several methods. What’s yours?

Honestly the same way your research went (Referring to my article: “How I discovered the world’s largest book source (Hint: It’s Amazon)” -PV). Mostly hunting and pecking. Sort order helps and so does searching for books that I know have a high enough value.

What’s your personal buying formula, in terms of profit margins, sales rank, etc?

For me it’s books less than 150,000 when it comes to online arbitrage and I want to make at least a 50% return. This is because I’m looking for a faster return and guaranteed flip.

What’s the biggest mistake you made at first, that others could learn from?

None so far that I can recall.

What’s the best online book arbitrage trick that you’re willing to share?

Some books are worth paying more for. It’s a product not a book. There’s a mindset that we shouldn’t pay much for books but I’ll pay $70 for a 50% return on clothing. Why not similar thinking for a book?

You’ve outsourced a big part of your business. Can you talk about that?

There are many ways to outsource. I’m not a fan of listing books as its too time consuming.

The thrill of the hunt interests me more so I pay a trusted employee to clean, list, and ship my books. You need an intelligent person because they must accurately
grade, describe, and price the book. Most people are against and for good reason – your account is on the line and you must give someone access to your account. I’d
rather spend my time looking for more books to buy than cleaning and describing a book. That’s why trust is crucial but your company can’t grow to its full potential if the owner is the only employee. You’ll easily double your profitability if you do this and what many people don’t know is that you can give an employee access to the account but limit what they can see using settings found in seller central.

Interview #4: Michael

How did you get turned on to the idea of buying books on Amazon, and reselling back on Amazon via FBA?

Shortly after I started to get a hang of being a full time bookseller on Amazon, I would notice while pricing my merchant fulfilled items, that some items would be priced way too low. Already having a merchant fulfilled inventory of over 10K titles, I was well aware of this erroneous pricing strategy, and instead, focused my efforts on achieving premium prices for my items rather than quick sells. This would lead me to buying out merchant offers so my higher price could be lower in the search results. I wasnt always making hefty returns on the items I bought, but I wasn’t losing money and I was also increasing the sales price of my items. This then evolved into trying to search for these opportunities, and buying textbooks in the off season at very low prices, and then pricing them quite high and slow selling them during textbook season. When we eventually switched to being 100% FBA, we started realizing these inflated margins on 50% or
more of our sales.

Often times we were selling $0.01 items for over $35+. I started checking my sales daily (over 100-200 sales a day at this point) and I would look at sales over $20 and check what the merchant price was. If it was profitable I would buy copies. Sometimes lots of copies. Our sales, are still one of the main ways we locate these MFN->FBA flips. Since we price all our inventory only against other FBA offers, they present themselves quite often.

What’s your personal buying formula, in terms of profit margins, sales rank, etc?

It really depends. I use CamelCamelCamel and Keepa to see the sales history of an item. I try not to invest too much into items with ranks closer to a million. If im confident that the copies will sell fairly quick (within 6 months), I will buy as many as I think I can sell. I prefer to stay under 250K rank, but I examine each situation individually.

I usually don’t buy more than 10 copies of a title at a time, however I have purchased as many as 20 from a single seller with poor pricing mechanics.

What’s the biggest mistake you made at first, that others could learn from?

When I first started doing this, I didn;t know what I know now about rank and how it behaves. I didn’t know about CamelCamelCamel or Keepa. On top of that I was scared to invest more than $25 into a book. Dont be scared to invest when you find winners, and know all the tools you have available to you and use them wisely.

What’s the best online book arbitrage trick that you’re willing to share?

Probably recognizing when you’ve made a sale that is repeatable and using that to buy more copies, in conjunction with buying out other peoples offers to raise the price of the lowest offer. Also, buying textbooks in the off season for pennies and selling them in JUL-AUG or DEC-JAN. Remember that if you are selling an item FBA it has many advantages over a merchant fulfilled item, so you shouldn’t be pricing against merchant offers. They are not your competition. I forget where I read it, but I once read a statement that said something like “90% of Amazon customers have never purchased anything that wasnt fulfilled by Amazon”.

Endnote: I created a tool to partially automated online book arbitrage

Update: I’m no longer directly involved in the day-to-day operations of Zen Arbitrage, but the tool is still available here.

Something this serious doesn’t need to be hyped. I consider Zen Arbitrage as the biggest thing to happen to book sourcing since the scanning app.

If you have any interest in sourcing books in your pajamas, click on the banner below, scroll down a little, and watch the 4 minute video. Seriously.

 

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