Every trick to profiting from Amazon trade-in credit arbitrage

Everything there is to know about trade-in book arbitrage, Amazon’s trade-in program, and how to profit from it.

What is Amazon trade-in arbitrage?

About a year ago, a buzz in the Amazon selling world erupted seemingly out of nowhere: Amazon trade-in credit “arbitrage” was the new gold rush.

The idea was very enticing, and it went like this:

There are hundreds of thousands of books (and around half a million items total) that Amazon will offer instant trade in credit for.

If you find a copy (book, CD, video game, etc) for sale on literally any site in the world that costs less than than the trade in value, you get to profit the difference (in Amazon trade-in credit, which can be traded up to cash, as we’ll discuss).

And not “profit” in the speculative sense the way you’re used to when selling books: Amazon actually locks in the trade-in amount, and as soon as the item is shipped and received, you receive the credit.

No more wondering about prices dropping, dealing with seller feedback, repricing, or virtually any headache we’re used to dealing with selling products on Amazon.

(This is not a puff piece on Amazon trade credit. I’ll get to the myths and downsides, including hard numbers, in a moment.)

The hype is understandable. But is it overblown?

The lazy-person’s way to make money on Amazon

It appeals to the secret (or not so secret) lazy person in all of us: Get paid (credit) to click around the internet, and the outcome is guaranteed (only marginal risk – Amazon locks in that price and guarantees it).

It almost seems too good to be true. Is there such a thing as easy, risk-free money on the internet?

Yes and no.

“Yes,” if you avoid the most basic mistakes, the risks are minimal (basically a shady seller sending an incorrect / damaged book).

“No,” in that it’s not as easy as the “get rich quick” hucksters make you think (a lot of the trade in credit hype was spread by “get rich quick” marketers like Luke Lambo and “Textbook Money,” who carpet-bombed the internet with webinars for their high priced Amazon trade in arbitrage tools).

The people who do well at trade in credit arbitrage are willing to dedicate serious time to scouring the Amazon trade in store, hunting opportunity across the internet like a laser-focused predator. They accept the trade-off: In exchange for the elegance and simplicity of near-risk-free, totally online sourcing, they’re willing to dedicate significant time to hunting down the profit.

(If you’re one of those people with a short attention span who tends to give up if you don’t achieve results in 5 minutes, don’t even try this. It does work, but its not that simple.)

How I got intimate with Amazon trade in data

Over at my book arbitrage tool, we’ve built a massive data harvesting system that is processing tens of millions of products daily. Among this, trade in value not just for books, but everything. As far as the trade in data, I never really paid attention to it. But after the buzz over Amazon trade in became a deafening roar, I started to look at the data more closely.

With access to this data, I know exactly what the numbers look like. Exactly what the opportunity is, the price fluctuations, and more. Over the past few months, I’ve gotten to know these numbers intimately.

From looking at this numbers, I can give a more sober take on exactly what the opportunities are in trade in credit arbitrage (fancy term for buying low and selling high), and I’ll be sharing some of those numbers with you both in this article and more over the next week.

There are two parts to this article

1. The basics of Amazon’s trade in program.
2. How to profit from trade in.

How Amazon’s Trade In Store Works

To submit a trade-in:

• Go to the Trade-In Store and search for eligible items
• Click Trade in to add items to your trade-in submission.
• Select the condition of your item(s) based on the criteria listed, then click Continue.
• Click Submit your trade-in to print your prepaid UPS shipping label.
• Ship your items within 7 days.

Four facts about Amazon’s trade in program

The price is locked in for 7 days

As long as the book is shipped by then, you’re guaranteed this amount. To those whose biggest frustration about selling on Amazon is price volatility, you’ll love this.

Amazon pays for shipping

They issue you a pre-paid shipping label, so just get it to UPS and the rest is taken care of.

Amazon only offers trade in value for high-demand books

Their whole business model here is offering a smaller amount than they expect to sell this for, and only for high-demand books. In the Books category, it is rare to see something ranked worse than 300,000, and most books are better than 100,000 (i.e. high demand)

The trade in value is inherently a fraction of its expected sales price

The higher the demand for the book, the higher the percentage of its average sales price Amazon will offer in trade in value, but naturally the trade in value is always less than Amazon expects to sell it for. Buy low, sell high. Amazon is just doing a smarter version of what we’re doing already.

Downsides To Trade In Credit Arbitrage

Anyone someone touts “Make instant internet profits with no risk and without leaving your computer!!!” get very suspicious. They’re leaving something out.

Other “gurus” online have spread a lot of hype (and made a lot of enemies) over trade in credit arbitrage, so let’s give a more sober take.

Here’s the other side of trade in credit arbitrage:

1. It’s hard.
2. It’s volatile.
3. You’re inherently not getting the full value for your books.

It’s hard: By hard, I don’t mean “digging ditches” hard. You are in your pajamas on your computer, after all. You have to spend a lot of time scouring Amazon and Bookfinder.com links to make serious trade credit. There are tools that will greatly streamline this, but it is not “fast easy and instant results.”

It’s volatile: I’ve seen the numbers. When there is a product on Amazon whose price drops below the trade in price, it is usually gone in under a couple hours.

You’re not getting the full value for your books: By the nature of the fact Amazon is offering “X” for a book, that book has a cash market value of more than “X.” Amazon will always pay you in trade less than what they can sell it for. That means you can always get more selling that book for cash.

So why do trade in credit at all? It appeals to a certain type of risk-averse seller who doesn’t want to deal with volatility – they want something guaranteed.

Upsides to Trade In Credit Arbitrage

1. The prices are locked in: You no longer have to worry about price fluctuations and dropping prices.
2. You don’t have to wait for a sale: Once Amazon receives the book, payment is instant.
3. Shipping is free – Amazon pays for it: Just print a shipping label and you’re good to go.
4. You don’t have to leave your computer.

Amazon Trade In Credit – By The Numbers

Total number of offers in each category of Amazon’s trade in store (on average):

• Books: 125,000 to 350,000
• Music: 125,000
• DVDs: 100,000
• Video games: 10,000

Total in Amazon’s trade-in store right now: 400,000 (approx)

That’s the trade in program in a nutshell.

Now the fun part…

How does one find trade in opportunity?

Before we go into more detail, he’s the basic trade In credit mining formula:

1. Search Amazon.
2. Assess if current lowest price is lower than trade in value (yes this actually happens, as I’ll cover in a moment).
3. Run book through Bookfinder.com (or other book price comparison tools) to find the cheapest copy anyone on the internet. Find copies cheaper than the trade-in amount.
4. Order it.
5. Lock in the price, ship in the book, and get paid.

The three ways to profit off trade in arbitrage

1. Amazon-to-Amazon trades.
2. Bookfinder-to-Amazon trades.
3. Hacking price fluctuations (kind of advanced).

Profit method #1: Amazon-to-Amazon Trades

Is it possible to actually buy a book on Amazon for less than the trade in value? And why would that even be possible?

Yes, you can do that. At any given moment, there are thousands of products on Amazon whose prices have fallen below the trade in value (I’ll give you some specific numbers in a second).

This means (almost) risk-free Amazon spending money – without even leaving Amazon.

This seems too good to be true, so how does this happen?

To illustrate how and why, let’s take the Books category. On average are 250,000 books in Amazon’s trade in store (give or take) at any given time. That’s 250,000 opportunities for price anomalies, 250,000 products in constant price fluctuation, and 250,000 opportunities for the selling price to temporarily drop below the trade in value. Prices for products are fluctuating like crazy all the time, usually multiple times a day, so there’s nothing surprising about this.

Then consider that trade in books are inherently high-demand. The average trade in book is selling dozens of copies daily. Let’s just pick a lowball average figure and say the average across the trade in store is 5 copies sold per day. (No one knows what the average is, but this feels like a safe number).

So we know that the price is changing at least 5 times a day (barring sales coming from a seller with multiple copies for sale). With copies so rapidly getting listed, sold, and repriced, there creates incredible price volatility (again, dramatically more than Amazon as a whole).

With these numbers, this means that to one degree or another, there are over one million price changes and one million small opportunities for the price to drop below the trade value. And that’s just within the books category.

(I realize this is extremely flawed math, and I’m not trying give serious estimates here, just a general sense of price volatility).

And this doesn’t even factor in new listings at weird prices, repricers doing the weird things they do often multiple times a day, and sellers manually pricing like crazy people and under-pricing the trade in value.

All of this comes down to one thing: There are 1+ million price fluctuations daily within the Amazon book trade in store, and over a million small potential opportunities for prices to drop below the trade in value.

Specific trade-in statistics

How often does this happen? I have specific numbers for you.

How often does the lowest price on Amazon actually drop below the Amazon trade in value?

Because we’ve got a monster data-harvesting machine working 24-7 over at Zen Arbitrage, I have some numbers for you.

I just checked a moment ago, looking at just Books and DVDs (excluding all other categories), and got the real-time numbers.

At this moment there are 1,257 products you can purchase for prices below their trade in amount.

That’s over 1,000 instant trade in arbitrage opportunity, without leaving Amazon, in just two categories, right now.

That’s just at this moment (we don’t store the numbers that would indicate how much lower or higher than average this is 1,257 figure is on a given day, but I asked our developer to store that over the next few days so I may have some super-specific numbers for you next week).

Consider also that these opportunities come and go extremely fast. On any given day, its totally possible there are 10,000+ products appearing (and quickly disappearing) that can be bought and instantly traded in for a profit – all within Amazon.

And then consider I just looked at two categories (the only two we store data on right now). Across the entire Amazon trade in store, this is likely to be much higher.

What do these numbers translate to in terms of a percentage? How often will you see opportunities like this if you were just cruising around Amazon’s trade-in store?

Right now there are 140,000 books in Amazon’s trade in store, and 80,000 DVDs. The figure fluctuates a lot, and 140,000 for books is unusually low.

For Books & DVDs, when you add 140,000 + 80.000, then divide by 1,257, it basically means this:

Approximately 1 out of every 175 products has a price lower than its trade in value.

That’s not cause for a complete lottery-winner freak out, but pretty incredible.

Quite a weird (and cool) glitch in the Amazon Matrix.

Profit method #2: Third-party-site-to-Amazon-trades

This is where it gets much easier.

Amazon prices tend to stay pretty stable relative to their trade in value (174 out of 175 times, as we just established). But there are dozens of other bookselling sites across the internet. This is where it becomes a complete wildcard. Prices on other sites can be all over the place, and vary wildly.

A book can be $100 on Amazon, $70 on Powells, and $60 on eBay. Like I said, its just a complete wildcard.

So if you take any book with trade in value and run it through these other sites, there’s a significant chance of finding a copy not just cheaper than Amazon, but cheaper than its trade in value.

Hopefully this is getting exciting for you.

To make this easier, the way we can do this with one click is BookFinder.com: BF scans over 40 bookselling sites, and sorts them lowest price to highest.

It is true that Amazon is the lowest price most of the time. But new Amazon fees have made the potential for trade in arbitrage using Bookfinder.com a lot more interesting…

Prior to the the new Amazon fees for books ( which went into effect earlier this year), I would estimate that Amazon had the lowest priced book of any site on the internet about 90% of the time (just an estimate).

After the new fees, selling books on other sites became a lot more interesting to a lot of sellers, and based on my unscientific observations, Amazon is now the lowest price copy on the internet a lot less. I would estimate Amazon only has the cheapest copy about 80% of the time (again, an estimation).

Even compared to just a year ago, the potential for finding cheaper copies of books on sites other than Amazon has doubled (third disclaimer: just my estimation).

How to scan several sites automatically as you search Amazon?

Let’s say you don’t want to copy-and-paste ISBNs into BookFinder painstakingly one book at a time (who does). Are there shortcuts?

There are several online arbitrage browser extensions that embed book price comparison data directly onto the Amazon product page. Search the Chrome store and you’ll find them.

Profit method #3: Timing for historical price fluctuations

This is where it gets even more interesting.

All I’m going to do right now is tease next week’s article that goes deeper into this (with specific dates for highest and lowest trade in values), but here’s the idea:

Trade in values are fluctuating all the time. Going up, going down, going sideways. Amazon is one giant algorithm, and that algorithm is constantly adjusting trade in values based on numerous factors.

And these aren’t always trends that apply to every book, or every textbook, or any other broad category. They algorithm will adjust based on trends of specific books.

As a random example: Trade in value of certain law books tends to go up around the time of bar exams.

There is a little-known pattern to trade in values – both when they tend to go up, and when they tend to go down. If you know what these dates are, you can time both your purchases and trades to buy low and then trade in when the prices peak.

(Again, we’re locking in that price with one click of a button).

Let’s take a hypothetical example: You’re looking at a medical textbook with a trade in value of $100. You know historically it reaches its peak trade in value in 3 months. There’s a copy for $115. Not enough to profit now, but you know trade in prices are about to surge, so you’re confident this $115 purchase will yield a profit.

S/he with the best data wins.

Recovering gambling addicts beware: This will trigger a relapse.

And now it gets even more interesting

What if you also knew when purchasing prices were cheapest? Instead of just timing your trades for the highest trade in value, what if you timed your purchases to get the lowest price?

(There is a way to get all this data. We’ll get to this next).

Top 5 Tricks For Profiting Off Amazon Trade In Credit

Let’s get even deeper.

#1: Speed-searching: Increase efficiency 10x by analyzing prices

… so you know when to know when you should click over to BooksFinder.com

We talked about how the best opportunity is in using BooksFinder.com to scan over 40 bookselling sites. But should you click over every for every single book? How do you know what books to click on and which will almost certainly have no opportunity?

There’s a couple of tricks.

First, I have to reiterate there is potential for any book to have room for profit. Literally any book. But if you want to increase efficiency, here’s is what you do:

One, only click over on the highest priced books (we’ll talk about this next).

Two, focus on any book for which the sales price is close to the trade in price. Prices on other sites tend to stay within range of the prices on Amazon. That doesn’t mean they match to the penny, it means they stay “close.” (Again, generally). Part of this is just general “efficient market” phenomenon, part of it is repricing software that sets prices on 3^rd party sites to match Amazon’s. It’s just how things work.

So let’s hypothetically say you’re skimming through the Amazon trade in store and see 19 books with $100 trade in value each selling for $200. Then let’s say the 20^th has $100 trade in value but it is selling for $130. There is a much better chance of finding that $130 book cheaper than $100 on a 3^rd party site than those other 19 books combined.

When the sales price is close (I measure “close” by within 1/3) to the trade in value, there’s a dramatically higher likelihood of profit.

#2: Don’t ignore razor thin margins, because the profit is guaranteed

Let’s assume you’re currently in the business of selling books. You probably have rigid profit margin standards (expecting to double your investment, triple, etc).

Do not apply those to trade in arbitrage. This is a different game, with different rules.

Remember the reasons you have those ROI standards to begin with: To buffer against prices dropping, to buffer against Amazon commission, to buffer against long term storage fees, and more.

None of those apply with Amazon’s trade in program: The price is set in stone, there are no commissions, and there are no fees.

Would you pay $50 for a book you would only make $5 if you sold it on Amazon? No chance. The margins are too thin.

But with trade in, most potential for uncertainty is accounted for, and that $5 is virtually guaranteed.

It’s an entirely different way of thinking. Whereas your usual formula goes:

“Will this allow me room for profit when all the smoke clears and buffer me against the potential for a loss.”

…it shifts entirely to this one:

“Is this fixed, guaranteed amount worth my time?”

As an example, the total time cost for that $5 profit book is the time it takes you to checkout, then put it in an envelope and affix the Amazon shipping label. Assuming you’re already going to the UPS store to drop off other books, the time cost is only a few minutes.

Those $3 and $5 profit books can really add up.

#3: Profit off timing your trades

Timing your trades is a big part of this game. There are two sides to this: Knowing when prices to buy books are lowest, and knowing when trade in values are highest.

(I’ll be revealing numbers on both next week).

#4: The best opportunity is in the more expensive books

The biggest opportunities are with books in the $100+ range. It’s infinitely easier to find a book with $125 trade in value you can find on another site for $110 than a book with $30 trade in value you can find elsewhere for $15.

#5: Know how to turn Amazon trade-in credit into cash

If you can master online book arbitrage, and know how to turn $100 in trade credit into $1,000 (or more), you basically rule the world.

The only two major ways to screw up trade in credit arbitrage

1. Buying international / incorrect editions.
2. Buying damaged books.

So I mentioned several times this is a mostly risk free way to profit on Amazon. If I said “mostly,” what is the limited risk?

Number one, when you’re buying books outside of Amazon (less so on Amazon), there’s a ton of unscrupulous sellers selling the dreaded “international editions.” Without going into the details, these can’t be sold on Amazon, and can’t be traded into Amazon. Anytime you find a book for sale that is cheaper than the trade in value, you have to scrutinize closely to insure it is not an international edition.

Related to this, similarly unscrupulous sellers will list older editions or custom editions under the ISBN for the current edition. This can be determined in a couple ways: One, the cover will look different (older edition) or will mention the name of a specific school. Two, if there’s no photo, check the description to be sure the edition number matches with the one Amazon is offering trade in credit for, and that there is no mention of it being a “custom edition.”.

Both of these can usually be assessed at a 1.5 second glance.

Second is shipping Amazon a damaged book. Amazon will not accept a book for which any of the following applies:

• Library copy
• Custom edition textbooks (typically has a school name listed)
• Water damaged (wavy, swollen or discolored, crinkled, stains, rings)
• Broken spine or binding
• Books with torn or taped cover
• Missing, torn, or loose pages
• Burns, fire, or smoke damage
• Strong odor of any kind (including musty odor, cigar or cigarette odor)
• Marked “Not for Resale” (or is otherwise marked not for sale) anywhere on the cover or inside

You can’t protect against every seller who may not grade their books accurately. But this risk can be significantly mitigated by scrutinizing conditions descriptions closely and avoiding any that look ambiguous or outright sketchy.

Next-level: The ultimate hands-off trade in arbitrage formula

We talked about how trade in arbitrage works, and how to find it. A (mostly) risk-free business with online sourced inventory is pretty elegant. How could this get better?

You may have had heard of “prep services.” These are companies who receive inventory on behalf of Amazon sellers, inspect it, and ship to Amazon for you. As a Fulfillment by Amazon seller who sources inventory online, you can run that business without ever seeing or touching inventory. An entirely virtual business.

Only one problem: Its almost impossible to find a prep service who will take books for Amazon trade in. The reason is that so many sellers are careless about ignoring the two most common mistakes (described above), that rejection rates by Amazon are high. Prep services decide its more trouble than its worth, and refuse to deal with trade in books.

(I’ve scoured the earth and only found one who will take books for trade in.)

But if you can find one (and avoid common mistakes), you have an entirely virtual, and (virtually) risk-free business.

Here are the takeaways so far

• Amazon trade in credit arbitrage is laborious, but extremely low-risk.
• Prices within Amazon’s trade in store fluctuate one-million-plus times daily.
• These price fluctuations create opportunity to buy on Amazon and trade in on Amazon (perhaps 10,000+ opportunities daily)
• Opportunities are more abundant using BookFinder.com to scour 40+ other bookselling sites.
• Timing your trades to coincide with historical data and peak values is a big part of this game.
• Best opportunities are in the $75+ trade in value range.
• Chances of finding cheaper copies on non-Amazon sites go way up when lowest Amazon price is within 30% of trade in value.

Are the gears turning right now? They should be.

It’s about to get better…

Trade-In Arbitrage: How To Turn Amazon Credit Into Cash

Now we’re going into the fun part: What happens after you’ve racked up credit? Go on a spending spree for bathrobes, slippers, and pool toys; or turn it into cash?

(That wasn’t a trick question. Option #1 is totally legitimate.)

Three ways to turn Amazon trade-in credit into cash, and I’m about to explain each (in detail).

Warning: I’m aware trade-in sounds insane

I want to (again) address a question that comes up often:

Why would you trade a book in for credit (or instant cash buyback sites, which we haven’t even talked about yet) when you can sell it for even more cash?

I’m with you. I personally think its WAY better to sell books (and more) for cash. Two things about that:

1. Trade-in mining tactics work for credit AND cash.
2. Trade-in appeals to a certain type of person.

About #2, the trade-in game & instant buyback site game appeals to three types of people:

1. Someone who is extremely risk-averse and wants a nearly-guaranteed outcome.
2. Someone who wants quick results.
3. Some who doesn’t want to bother with the infrastructure of a “real business” (inventory, a seller account, etc)

Amazon trade-in credit arbitrage appeals to a certain kind of risk-averse seller who wants quick results and minimal risk.

Before we tell you how to turn it into cash, there’s another decision you have to make…

Should you compound trade-in credit, or cash out?

So let’s say you follow the formula I outlined in my first article in this series, took $100 in cash and turned it into $120 in Amazon credit. Here are your two options:

1. Cash out: Turn that credit into cash as quickly as possible.
2. Credit compounding: “Trade up” to turn $120 into $150, and on and on.

Trade-in Credit compounding: How it works

You should be able to extrapolate from the name alone how this works. Credit compounding goes like this:

• Taking a small amount of seed money (say, $100).
• Finding products online cheaper than their trade-in value, buying them, and trading them in.
• Then repeating the process and turning that into even more Amazon trade-in credit.
• And onwards and onwards…

…until you’re ready to cash out.

How far can you take it? Sky is the limit. Remember that margins are small with Amazon trade in credit arbitrage, and hunting down opportunity takes time. But the opportunities are out there and there’s no limit to how far you can “trade up.”

Credit compounding: A simple, conservative math equation

Let’s say for steadily receive only 5% returns for your trade-in credit investments. So for every $100 you invest, you get $105 back.

Here’s how those numbers work:

• Initial investment: $100
• 1st book: $105
• 10th book: 162.89
• 20^th book: 265.33

Again, I went for extremely conservative numbers here, assuming only 5% returns per transaction. Hopefully it will work out a lot for you a lot better than that.

So with 20 trades, you took $100 and turned it into $265 in Amazon credit. It took some time to get there of course, but through the miracle of this kind of “compounded interest,” and using some very conservative math, you got there.

And to make this extra cool, the risk was slim to none. As covered earlier in this article, Amazon guarantees the price and locks it in, so short of shipping them a damaged or incorrect book, that amount is guaranteed.

Taking this further: A second example, at 10% returns

• Initial investment: $100
• 1st book: $110
• 10th book: 259.37
• 20^th book: 672.75

Those numbers are even better. Much better.

So you’re ready to cash out

At some point, you’re going to decide to stop racking up trade in credit and cash out. How do you do it?

The answer is in one of three forms of online arbitrage – two I’ve talked about before, and one I haven’t.

Credit-to-cash formula #1: Old fashioned “online book arbitrage”

This is the formula I’ve been teaching for over two years. Don’t worry, I’m not going to explain it again. If you’ve read my book Online Book Arbitrage or been on my webinars, you know how this works. The premise is this:

“Buying cheap ‘merchant fulfilled’ (non-Prime-eligible) books, and reselling at a higher FBA (Prime-eligible) price.

Step #1: Set your buying criteria

If you’re doing trade-in credit arbitrage, we already know you’re someone who likes low risk and quick results (in exchange for lower returns), so let’s build our criteria around that assumption.

We’ll be looking for:

1. Textbooks.
2. Higher priced ($20+)
3. High demand (<100,000 rank)
4. Lower ROI: (50%)

It’s very easy to find well-ranked books with 50% returns when we’re willing to spend $20+ per book.

Step #2: Start compounding the cash

• Start: $100 in trade credit.
• Purchase: Four textbooks.
• Expected returns: 50%
• Turnaround time: 30 days.
• Result: $150 cash.

Now I never tell people to expect all their books to sell within 30 days with online book arbitrage. However in this case, we’re focusing on high demand books with low returns. And we’re pricing pretty conservatively, so all that should result in fast turnover.

So we just took $100 in Amazon trade credit (or cash, for that matter) and turned it into $150 in cash in 30 days. Consistent 50% returns are virtually unheard of in any investment anywhere (that I’m aware of), so this is pretty amazing in and of itself. But of course, it gets better…

Let’s roll our proceeds back into more books

• Start: $150 in cash.
• Purchase: Six textbooks.
• Expected returns: 50%
• Turnaround time: 30 days.
• Result: $225 cash

Same (simple) online book arbitrage formula. Now we’re up to $225 in 60 days. Yes, it won’t always work out exactly like this (sometimes better, sometimes worse), but I think this math leans towards conservative.

Let’s do this two more times:

• Start: $225 in cash.
• Purchase: Nine textbooks.
• Expected returns: 50%
• Turnaround time: 30 days.
• Result: $340 cash.

And then:

• Start: $340 in cash.
• Purchase: 12 textbooks.
• Expected returns: 50%
• Turnaround time: 30 days.
• Result: $510 cash.

What just happened?

A: We turned $100 in Amazon trade in credit into $500 in cash in 120 days.

That’s not overnight. But getting a 5x return on investment this quickly is almost unheard of in any other business.

In ancient times you would be burned at the stake for this kind of Merlin-level sorcery. But this isn’t magic.

Credit-to-cash formula #2: The “Underpriced Book Hack”

AKA selling severely mispriced books for quick cash.

The “Underpriced Book Hack” goes like this:

Anytime you can find a book on Amazon that is selling for “close” to the trade in value, that is a strong indicator that book is significantly underpriced by the seller (probably by accident).

Which means it is a strong indicator that book can be purchased at its cheap price, and immediately resold at its “true market price.” And of course, you get to profit the difference.

The premise of this hack is simple: 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 your only mission becomes:

1. Cruise around Amazon’s trade in store.
2. Look for items selling for close to their trade in amount (say, within 30%)
3. Confirm the item is underpriced by reviewing the item’s price history in Keepa.
4. Buy the underpriced item.
5. Sell immediately on Amazon for a cash profit.

By all angles, this is quick, low-risk cash.

Running The Numbers On “The Underpriced Book Hack”

Let’s say you take a mere $100 in credit (or cash, doesn’t matter). Using the Underpriced Book Hack, with enough hunting, let’s say you find enough underpriced books to safely turn that into $150, after all Amazon commissions. Possibly leaning towards optimistic here, but these opportunities are not uncommon.

(Each “round” below represents each time you invest the proceeds into books and convert those books into cash).

Initial investment $100 (credit)

• 1^st round: $150 (cash)
• 2^nd round: $225
• 3^rd round: 337.50
• 4^th round: $506.25
• 5^th round: $759.38

In just 5 cycles (buy, list, sell, repeat), you turned $100 in credit into $759

Again, I think these numbers are pretty reasonable. I’m not getting crazy with the unrealistic optimism here. And the only thing this cost you was the time hunting for opportunity on Amazon.

What if we started with $250?

These numbers get crazy, and I don’t blame you if you read this in disbelief. But here’s how the math works:

Initial investment $250 (credit or cash)

• 1^st round: $375 (cash)
• 2^nd round: $562.50
• 3^rd round: $843.75
• 4^th round: $1,265.63
• 5^th round: $1,898.44

Just for fun, let’s do that same math with $500 credit:

Initial investment $500 (credit or cash)

• 1^st round: $750 (cash)
• 2^nd round: $1,125
• 3^rd round: $1,687.50
• 4^th round: $2,531.25
• 5^th round: $3,796.88

That’s the miracle of “compounded arbitrage interest.”

Credit-to-cash formula #3: Book buyback site arbitrage

I’ve never talked about book buy back sites before, mostly for the same reason I rarely talked about Amazon’s trade-in program before last week:

The buy back amount is always going to be less than what you can get for the book by selling it on Amazon.

That said, this is a great formula for the aforementioned “risk averse” person, because just like Amazon’s trade-in program, book buyback programs lock in a price and guarantee it for a set number of days.

Few facts about book buyback sites:

1. There are over 35 of them.
2. They lock in the price and (most) pay in cash.
3. There is huge variation in how they pay, conditions standards, etc etc.
4. They often pay more in cash than Amazon will in credit.

The last one is interesting.

Where do you find book buyback site offers? The best source is BookScouter.com

Enter an ISBN into BookScouter, and it scans over 35 different book buyback sites, and puts the highest offer at the top.

So, you have $100 in Amazon trade in credit. How do you utilize book buyback sites to “trade up” and walk away with significant cash?

By applying the same formula I outlined earlier in this article. Here’s the general outline again:

• Go to Amazon’s trade-in store.
• Look for books with a minimum $25 Amazon trade-in value (the higher the number the more likelihood of the the big price spreads across other sites that we’re looking for).
• Run ISBNs through BookScouter, look for the highest cash buy back offer.
• Run ISBNs through BookFinder.com, and find copies online that are cheaper than the buyback offer.
• Buy at the low price and sell instantly at the high price.

And that’s how you turn Amazon credit (or cash) into more cash, and on and on until you end up as Scrooge McDuck in a top hat sitting on a giant pile of gold coins.

Next: how to exploit Amazon trade-in credit arbitrage to identify underpriced books you can sell for quick cash (and skip trade-in credit altogether)

Does Amazon trade-in arbitrage even make sense?

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

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):

1. Hunt for trade-in credit opportunity just like you would if you wanted trade-in credit.
2. 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.
3. 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.

How “Price Proximity” works with trade-in arbitrage

Anytime you find a book in the trade in store that you can buy on Amazon or 3^rd 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: Look for trade-in prices close to purchase price

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: Confirm the book’s 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.

Recapping these steps: 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 simple “price proximity” arbitrage process, step-by-step

For people who love bullet points, here’s the process:

1. Mine Amazon’s trade in store.
2. Find underpriced books (or anything) by looking for a sales price close to the trade-in value.
3. Optional: Search for even cheaper copies using BookFinder.com.
4. Determine the historical average price for the item using Keepa, confirm the book is underpriced.
5. Determine your potential net profits.
6. Buy the book and sell for quick cash.

How To Profit By Analyzing Amazon Trade-In Values

Now we’re exploring yet another angle to profit from trade-in arbitrage: Analyzing high and low historical pricing data, and how to profit from it.

Up to this point in the article, we’ve covered a lot of ground:

• How Amazon’s trade in program works.
• Upsides and downsides to mining Amazon for trade in opportunity.
• The three ways to profit from Amazon trade-in credit.
• Top 5 tricks to profit.
• Only two major mistakes you can make.
• Using a prep service to streamline trade-in mining.
• How to make cash off trade-in by using trade-in values to identify underpriced books.

Analyzing price fluctuations for Amazon trade-in book arbitrage: The basics

In this article, I’m going to reveal something I’ve never seen talked about before

The premise is a simple one, in two parts:

Premise #1: Trade in values are fluctuating all the time. Amazon is one giant algorithm, and that algorithm is constantly adjusting trade in values based on numerous factors.

If you can hold your books and trade them in when you know historically trade-in value is highest, you can get the highest return.

Premise #2: Prices of third party offers on Amazon are fluctuating just the same. Going up, going down. Not because of Amazon algorithm, because of normal buying and selling activity.

If you buy your books when you know historically they are lowest, you can pay the least.

What if you knew when trade-in values were about to rise?

What if you could both buy books when they’re cheapest and “sell” when trade-in value is highest? What if you could increase the gap between the buying price and the trade-in price to the widest possible spread, by knowing historical pricing data?

There is a little-known pattern to trade in values – both when they tend to go up, and when they tend to go down. If you know what these dates are, you can time both your purchases and trades to buy low and then trade in when the prices peak.

Yes, this can be done.

How awesome would be it be if we knew the exact date books were cheapest, and the exact date trade in values are highest? Then we could do all our buying on one day, all our trading on another day, and make a killing?

It’s almost that simple, but not quite. Because pricing trends affect various books differently, we can’t just memorize a couple dates and exploit this trick to the fullest.

While textbooks tend to have peaks of trade in value and valleys (no pun intended) of price in the same windows of time, there are many textbooks that don’t follow these rules. Certain textbooks have different peak sales and low sales windows, and naturally that affects their trade in value and price.

One example to illustrate the complexity: Test study guides for the “Multistate Bar Exam” (MBE). At a glance these appear to be regular textbooks, but they peak (and valley) at totally different times than other textbooks. This exam only happens at the end of July and January, which affects their pricing fluctuations. Trade in values tend to peak a little before the test, and prices tend to plummet after.

Every book has its own pricing history. So there’s way more than can be shared in one article (or one book).

The best you can hope to memorize is the broad strokes. Which I’m about to reveal…

How I got deep into Amazon pricing and trade in history

I mentioned this previously, but over at my online arbitrage tool, we have a massive data harvesting system churning through tens of millions of products on Amazon daily. Among it all is trade in data for virtually every book in Amazon’s trade in store, not just at the moment but going back over two years.

When a certain scandal hit involving a certain competitor who sold an over-hyped trade-in tool (some of you know what I’m talking about), I began looking more closely at the data to assess just how profitable (or not) Amazon trade-in arbitrage could be.

A year later, here we are – with some cool data to share to help you get the highest returns on your Amazon trade in mining (should you choose to venture into this world.)

Historical pricing history gold #1: When Amazon trade-in value are highest.

The dates for the highest trade-in values for textbooks are:

First 12 days of August.

Analysis: The numbers here are sightly weird in that there is no single “big date” within the first two weeks that is far and away the one where trade in values spike to a crazy degree. It’s mostly even across the beginning of the month.

Second place: December 26th.

Analysis: Trade in prices the day after Christmas surge to levels 70% above normal. As far as single days of the year, December 26th is THE day to submit books to Amazon’s trade-in program.

Both of these windows / dates makes sense, because textbook sales peak shortly after each of these ranges, and Amazon wants to stock up just before (not during) the sales rush.

Sidenote: As a quick example of how wildly this varies depending on the type of book, I noticed with “Gift”-type books (box sets, etc) trade-in values are highest the first week of December

Historical pricing history gold #2: When Amazon textbook prices are lowest

Trade-in credit mining and arbitrage is not just for textbooks. But the Amazon trade-in store leans heavily towards textbooks, so historical textbook pricing data is of chief relevance to trade-in.

In our database, we store pricing data a little differently than trade in, so I pulled up the top 30 dates where textbook prices were lowest.

Lowest textbook prices: 11 of the 30 lowest days of the year were in December.

Before pulling these numbers, I suspected December had the lowest prices (sales of textbooks are also lowest in early-to-mid December) but I didn’t know it was so severe that 1/3 of the examples of a book’s lowest price were in a single month.

What do these stats mean for trade-in arbitrage?

Two actionable (and profitable) takeaways here:

If you’re buying textbooks, the time to buy is:

Mid-december

If you have a textbook, the times to trade it in are (usually):

 Early-August.

December 26th. (More generally, late-December).

If its not obvious already, I timed this series of articles on Amazon trade in around these dates, because they point to one thing:

December is the best time to hunt for Amazon trade in arbitrage opportunity: Prices on textbooks are lowest right now, and trade in values are highest at the end of the month.

So there you go, you can make a lot of money with that one.

S/he with the best data wins.

This is the longest guide I’ve ever written

I’ve written about various tactics of online arbitrage before, but nothing this extensive.

We covered everything from what trade-in arbitrage is, to how to turn credit into cash, to how to analyze trade-in values to find opportunity, to the dates trade-in values are highest. You now have a PhD in trade-in arbitrage.

I suggest you print this out and study it closely. I put a lot of work into this (and probably could have made this a paid course).

Please put this into practice and enjoy what is perhaps the weirdest method to make money on Amazon that I’ve ever discovered.

-Peter Valley

 

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