The art & science of textbook pricing

The textbook sales explode on Amazon twice a year. Here is everything FBA textbook sellers on needs to know about maximizing your profits.

Textbook season: The twice-annual holiday for FBA booksellers

If you’re selling textbooks on Amazon, mid-August and early January are your Christmas. Students around the country flood back to universities, and you must take action in advance to optimize your FBA book listings for the huge prices students are willing to pay for textbooks.

This is a really important post, and money is slipping through your fingers if you don’t act on this early, so let’s get into it. Here’s what we’re going to cover:

• How to really price textbooks for maximum profits (most people selling textbooks on Amazon get this wrong).
• Why I do not use repricing software with textbooks.
• Why you have to code your SKU’s uniquely for all textbooks.
• How to spot what kind of books students are buying right now (It’s way more than just textbooks).

This is some hardcore tactical advice, for Fulfillment by Amazon (FBA) sellers only.

Textbook season: View from a college town

I live literally across the street from a major university. No kidding, I can see three moving trucks from my window as I write this. School is back in session everywhere.

If you’re selling textbooks on Amazon (or nearly any non-fiction books), you will see a spike in sales starting in mid-August or January 1st. By the time I woke up today (in August), I had already done $300 in sales. (To be fair, I usually wake up at noon). And it’s only going to get crazier from here.

Fundamental textbooks pricing rules (that don’t apply to other books)

You must price textbooks on Amazon in a way that you don’t price any other book. This is where I have to insist you abandon what you think you know, and surrender to what works.

My unorthodox Amazon pricing formula for textbooks is not shared by most who are selling textbooks on Amazon. Which is fine, because I make more money from textbooks than they do. My formula is vindicated by my results. Here is the truth that underlies it:

With textbooks, people will pay way, way more for FBA offers that any other category.

I’ve said it many times: Textbooks are the perfect formula for profit when sold via Fulfillment by Amazon. Here’s why:

1. Urgency. Textbook purchases are usually time-sensitive, and delivery is needed on short notice by a fixed date. This is where  free second-day shipping is a major selling point. And only Prime-eligible / FBA offers can provide this.
2. Amazon Student program. The Amazon Student program offers six months of Amazon Prime for free, making students a disproportionately large percentage of Prime subscribers (and consequently, FBA purchases).

Start repricing just before textbook season

Millions of students are flooding Amazon starting after the first week in August, and Christmas. You must optimize your prices just before this period. Otherwise, your textbooks are probably priced too low, and you’re losing a ton of money.

So what’s the best FBA pricing formula?

Pricing is always a balance of sales rank and type of book. We have our type of book established (textbooks), so we’re going to use Amazon Sales Rank as the basis for our pricing strategy.

My Fulfillment by Amazon textbook pricing formula

In the absence of other FBA competition, here is how I price textbooks on Amazon:

Sales Rank of 1 to 30,000: Price $40 to $75 above the lowest non-FBA offer. Seriously. (I’ve had people pay over $100 more)

Sales Rank of 30,000 to 150,000: Price $35 to $50 above the lowest non-FBA offer.

Sales Rank of 150,000 to 300,000: Price $25 to $40 above lowest non-FBA offer.

Sales Rank of 300,000 to 600,000: Price $20 to $30 above lowest non-FBA offer.

Sales Rank of 600,000 to 900,000: Price $10 to $25 above.

…and if a book has an Amazon Sales Rank of worse than 1 million, use your judgement.

It goes without saying that you should abandon these rules if you are listing a textbook that has an abundance of other sellers competing for the top stop. When your FBA competition is fierce, you want to relax these pricing standards somewhat.

And to state the obvious: This is assuming you’re not pricing higher than Amazon itself. Amazon’s price is always the ceiling.

A note on the fluidity of Sales Rank

I’m very aware that Amazon Sales Rank is a fluid thing, and what’s ranked 100,000 today could be 1 million in just over a week. If you’re selling textbooks on Amazon, Sales Rank should be more of a hedging move then a formula with guaranteed, consistent results.

A textbook with an Amazon Sales Rank of 100,000 right now will probably sell more quickly than a book ranked 1 million. Probably. In the absence of a functioning crystal ball, we’re going to assume this and price based on this assumption.

Note there is a huge amount of subjectivity here. My FBA textbook pricing formula itself is somewhat fluid. This is how I’m pricing as of this moment. And sometimes there are exceptions.

For example, I might see a book with an Amazon Sales Rank of 100,000, and think it seems just a little too weird and esoteric to sell a copy every day. Maybe it probably just sold the only copy it will sell this week (or month). Then I will price conservatively based on this assessment.

How should anyone selling textbooks on Amazon define “textbook”?

(Answer: it’s way more than just typical “textbooks”).

When repricing your FBA offers before textbook season, don’t only look for books that are obviously “textbooks.” You’re looking for any type of scholarly non-fiction that would appear to be used primarily in an academic setting. You’re also looking for fiction packaged specifically for university students.

It takes somewhat of a trained eye to spot these. Its a skill that comes from pricing and processing tens of thousands of books and getting a feel for it.

For example, a regular copy of Frankenstein would seem like an unlikely title to price as a textbook. Generally you would be right. But if it was a Norton Critical Edition, with supplemental material just for college students, you could price much higher than a standard copy. Norton Critical Editions are made for students, and you can command textbook prices as an FBA seller.

Why I will not use repricing software to reprice textbooks

Repricing textbooks as an FBA seller is far too delicate and intuitive for me to trust to repricing software. There’s too much money at stake, and I haven’t found a repricing software that can handle all the granularity of my formula.

For example, let’s say there is a textbook on Amazon ranked 10,000. Lowest merchant fulfilled offer: $10. Under normal conditions, I would price this as an FBA seller at $50 or so, and see what happens. It will probably sell, if it’s textbook season.

But let’s say some bozo priced his Fulfillment by Amazon offer at $13.99. And then some other bozo came in behind him and matched his price. And then another person has their copy at $18. And let’s say yet another has a copy priced at $19.99. That’s four copies priced lower than the price I would like to set. Even if you don’t match the lowest bozo’s FBA offer, with so much competition, you still have to price lower than the price you would like, right?

I won’t. A textbook ranked 10,000 will possibly sell hundreds of copies before textbook season ends. I expect the lowball FBA sellers to sell out quickly, and I’ll be next in line.

This might not happen. But when the profit difference is literally 500% or more, I’m happy to take the risk. Again, I’m hedging my bets. And it usually pays off.

But then let’s say there is a fifth FBA textbook priced lower than I’d like. It’s priced at $45. It’s only $5 below my preferred price, so I’ll probably just match that.

Now, where is the Amazon repricing tool to which you can say: “If the SKU indicates its a textbook, and it’s rank is lower than 30,000, and there are less than 6 offers priced less than $40 below the lowest merchant-fulfilled offer, ignore all of them and price at $40 higher, unless there is an FBA offer within 10% of my desired price, then match that one.”

For now, I’m pricing my textbooks manually.

How to make repricing 1000x easier next textbook season

The answer is: Code your SKUs. If you’re selling textbooks on Amazon, every time you list a textbook, denote that it’s a textbook in the SKU. That way, when you go back and reprice, you can filter by this SKU and see all your textbooks at a glance. Much, much easier.

How do I do it? I put the word “text” at the front of every SKU. Pretty simple.

My FBA pricing formula is vindicated by its results

The first time I priced a $10 at $50, I didn’t really think it would sell. It seemed outrageously irrational for anyone to pay over 6 times more just to get that second-day shipping. But the book sold, and sold fast.

What I learned is: It doesn’t matter what I would do, or even what I think other people would do. All that matters is what works.

As I’ve been repricing my books over this textbook season, I’ve found that I have very, very few textbooks that I had in my inventory 6 months ago. Nearly all of them sold, even at my “outrageous” prices.

People will pay way, way more for your FBA offers, especially with textbooks. You just have to let them.

As soon as textbook season arrives, sound starts pouring through the hourglass. Plan ahead, and let it rain…

-Peter Valley