The 4 Laws of Value: The Science of Finding Books To Resell

How I figured out “the missing link” of Amazon bookselling, and the REAL secret of how to find profitable books to resell

The secret science of finding profitable books to resell on Amazon

Sometimes I get emails that express general despair. They go something like this:

“Peter

I read your articles. I do what you say. And I’ve made a little money. But I’m not getting the results you and other Amazon sellers get and I want to know what I’m doing wrong.”

Sometimes, the answer is simple. (They’re keying in ISBNs manually into their 2009 TracFone, they’re buying tons of “valuable” books without regard for Amazon sales rank).

Often, it’s harder to troubleshoot. And believe me, I try.

Their sourcing equipment? Looks good. Their ability to interpret FBA scanning app data? Checks out.

Believe it or not, “number of book sources” isn’t usually in the top 3 culprits. While it’s true your profits are in direct proportion to your number of sources, more often than not scarcity is not the problem.

It became apparent there was a mystery factor at work. Something not quantifiable. Some weird blindspot I couldn’t identify that held the secret of how to find profitable books to resell on Amazon.

There was something that separated those who found a lot of profitable books, and those who didn’t.

And it troubled me.

How spying revealed the secret to finding profitable books to resell

Then I began spying on my friends

After sitting on this for a year or more, I started to turn a few friends on to FBA and Amazon selling. And after going out sourcing with them, the pattern became clear.

They had the right “equipment” and “skills,” but I’d come out of every source with 3 times more than them.

In the past I called this weird missing ingredient “the Zen of bookselling.” As though it was some cosmic force at work. I was only half right.

Today, I call this “The Missing Link” of Amazon bookselling

The Missing Link is why…

• You look across the room at a library book sale, and there’s a guy with 8 bags full while you’re still on your first.
• 10 people can go through a video course on selling with Fulfillment by Amazon, and the spectrum of results will range from bankrupt to seven-figures.
• Everyone knows what you’re supposed to do, and everyone gets different results.

It took me so long to understand what was going on. But I finally figured it out.

Before I tell you what “it” is, a few words about how I made this discovery…

How I discovered this “Missing Link” of Amazon bookselling

Some months ago, I was preparing to write a book on specifically how to find profitable books to resell. Basically, “what to look for” when book sourcing. I thought of it as sort of a niche title for a few diehard Amazon sellers – worth doing, but only relevant to an “advanced’ audience. Maybe I’d give it away, or throw it in as a bonus for some other book in the future.

Since most of what people “know” they can’t really access until they’re somewhere the information is relevant, I went to an inventory source with tons of books and started taking notes.

They looked like this:

• “Sage Publications, niche textbook co, high likelihood of value.”
• “Anything on music genres you’ve never heard of.”
• “Harvard Business Press – worth $ often.”

And so on. I took dozens of pages of notes like this.

Then I started recording myself while hunting for books to resell

Taking notes quickly grew tedious, so I had another idea: Go out book sourcing, and record myself on my phone as I narrated all my thought processes: why I was picking up certain books, why I was leaving behind others, talking about patterns of Amazon value I’ve noticed among books, etc etc.

The idea was to do this for a few days, then take all the audio recordings to a transcriptionist and edit the result into book form.

45 minutes into my first filming session, I’d gotten about two tiers down on one bookshelf. 15 minutes after that, I was still on the same shelf. Then my phone died.

Apparently I had a lot to say about how to find books to resell, and what to look for.

Translation: Knowing what books to look for was a lot more complicated than I consciously realized. Contrary to what I’d thought, it turns out book sourcing was infinitely more about “inner game” – i.e. what’s going on in your head – than blind reliance on an FBA scanning app.

To put it another way: The science of finding books to resell was way, way less about “data” than I had ever realized.

Scanner Dependence Syndrome

This shattered how most people look at Amazon sourcing.

Most Amazon sellers have a completely robotic approach to sourcing. They defer to their scanning app as the first, only, and final word.

We’ll call this “Scanner Dependence Syndrome.”

They don’t “know” books. As they advance in their Amazon selling, they aren’t observing patterns. They aren’t filing away lessons as they find items of value. Quite simply they aren’t learning.

(At best, they’re memorizing valuable titles they find – essentially worthless information, because what’s worth $10 today is probably worth $3 in six months).

They’re scanning every book, or almost every book, and outsourcing their brain entirely to their scanning app.

And why shouldn’t they? They have a magic screen telling them everything they need to know. To them, their app is God.

I didn’t figure out how crazy this was until I started recording myself sourcing books

…and talking about what I was thinking while I was doing sourcing.

It was then I realized there were more patterns to book value than I realized, and I had more knowledge of those patterns than I realized.

And slowly I began to accept one giant lesson:

Here it is: The Missing Link to book sourcing success

Spotting value before picking up a scanner is the single biggest “missing link” to Amazon selling success.

The secret wasn’t in the scanning. It was in the pre-scanning.

That’s when it hit me:There are three levels to this…

The three levels of book sourcing mastery

Level #1: Scan everything

Level #2: Scan what “looks valuable”

Level #3: Scan based on principles that drive value

These bear some elaboration…

Level One Sourcing: Amazon booksellers who scan everything

Scanning everything. Completely scattershot. To the Level One Sourcer, book value is assigned by the capriciousness of the Gods, and value is determined by completely random factors.

To Level One Sourcers, any book is just as likely to have value as any other. It’s just random.

Alternately, the Level One sourcer might understand there is some science to value, but don’t care to learn what it is. Consequently, they must scan everything.

Either way, the result is the same: They must scan everything.

(Of course, scanning everything is rarely possible, so the Level One Sourcer misses out on a lot of books. And in return they get something else: A lot of wasted time).

Level Two Sourcing: Amazon booksellers who scan what “looks valuable”

Selective scanning informed by guessing.

They don’t scan everything because they think they “get it” when it comes to value, but merely guessing without having principles that underlie their guesses results in an approach barely less random than Level One.

At this level, the book sourcer understands not all books are just as likely to have value as any other book, but they’re applying a mostly scattershot selection process based on a few clues they’ve picked up.

Every Level Two Sourcer thinks they “get it,” and they just know how to tell what categories and titles are profitable. But that’s just the problem: They’re focused on categories and titles, not principles.

Level Three Sourcing: Amazon booksellers who scan based on principles of value

Principle-driven sourcing. An understanding that there are forces that drive value, what those forces are, and how to spot them.

Why Amazon booksellers who scan everything always fail

Here is the inherent problem with Level One & Two book sourcing, explained with some hard math.

Let’s pick a generic source. Say, an estate sale. Someone dies and leaves behind 10,000 books.

Now let’s assume for a moment you’re one of the rare people who truly has an unlimited amount of time, and the sale lasts forever. I won’t even handicap this example by making the estate sale only four hours or anything like that.

Now let’s assume every time you scan a book, it takes an average of 3 seconds. That’s factoring in picking up the book scanning it, putting it back, and moving to the next book. This is a very conservative number, and it will be longer if you’re using a cell-service-based app.

Now let’s say you are afflicted with a bad case of “Scanner Dependence Syndrome.” You don’t know or care about books, they’re just widgets to “flip” for a buck, and your app is the sole arbiter of value. This probably describes most people who sell books on Amazon.

Level One Book Sourcing: The numbers

• 10,000 books
• 3 seconds per book
• 30,000 seconds
• 500 minutes
• 8 hours.

If you took no breaks, and kept up this pace, you would be done scanning every book in just over 8 hours.

Now let’s say you’ve achieved the status of a Level Two Sourcer. You have a slightly deeper understanding of how to find profitable books to resell on Amazon. You understand there are certain patterns to spotting value, and that it’s naïve to scan everything, but you don’t really know what those patterns are so you just kind of guess.

Let’s say with this un-evolved approach, you’re scanning every 5^th book.

Level Two Book Sourcing: The numbers

• 10,000 books
• 3 seconds per book
• 2,000 books scanned
• 6,000 seconds
• 100 minutes
• 1 hour, 40 minutes.

This remains a conservative estimate, because remember we’re assuming zero breaks, and a rather brisk scanning pace.

Keeping your book sourcing to under 2 hours isn’t bad, or time-probitive for most sellers. It could be a lot more efficient (as we’ll cover), but isn’t as unthinkable of a task as the 8 hour example above.

Remember that most Amazon sellers are Level Two sourcers. They know they shouldn’t scan everything, but ultimately they’re just kind of taking random shots in the dark, and what books they think are worth money on Amazon is pretty far off the mark.

Consequently, their batting average is pretty low. Because their approach is very scattershot, they’re leaving a lot of valuable books behind. Among those 4 out of 5 books they don’t scan is a lot of profit

Why Level Two book sourcing decreases the rate you find profitable books to resell vs Level One

Consider that, in one important way, the above scenario is worse than Level One sourcing. At least when you’re scanning everything, you’re getting every book that’s profitable (to the extent you’re properly interpreting their scanning app data, which, honestly, most people don’t.)

So Level Two Sourcers dramatically decrease their time spent sourcing, at the cost of leaving behind a lot of profitable books. Mind you, this is not a bad trade-off, depending on how much profit we’re talking about. But there’s a better way.

Level Three Book Sourcing: The numbers

Remember, Level Three sourcing comes with a deep understanding of the factors that drive value – something totally different than a database of Amazon price values stored in your head.

At this level, we’re scanning about one out of 50 books (super-rough estimate and subject to wide variation depending on quality). Let’s run those numbers:

• 10,000 books
• 3 seconds per book
• 200 books scanned
• 600 seconds
• 10 minutes

Now, because there’s a lot of time spent moving between books and (subconsciously) analyzing, we’re talking about more than 10 minutes. But if you’re good, it’s not much more.

Are you leaving behind profitable books? Of course. And are you picking up books that aren’t worth money? Also of course. No one is doing Level Three sourcing with 100% accuracy.

But here’s the catch (the good kind):

Level Three sourcers are making more money than Level Two, in 1/10 the time.

Knowing the principles that drive value on Amazon will always outperform scattershot guessing.

Knowing the principles that drive value on Amazon is the missing link.

Principles-Driven Book Sourcing Is The Missing Link To Find Profitable Books To Resell

The Missing Link is in understanding principles that drive value among books, making it vastly easier to find profitable books to resell.

This isn’t a sexy answer. It’s not a hot new app or magic-bullet online trick.

But that’s good news: Because the few people who take the time to really get this will be in that top 5% of elite Amazon sellers who outperform the other 95%.

Introducing: Pre-scanning

What this comes to is mastering the science of “pre-scanning.” No one in the bookselling world is talking about this right now.

Pre-scanning is the science of filtering your options before picking up a book to scan.

Ignoring this layer of book sourcing is like going on a date with every single person on Tinder (actually this is a bad example: A lot of people do this and think it’s a good idea. Nonetheless…).

In all areas of life you need a “pre-scanning” process. Especially with how to find profitable books to resell on Amazon.

How Level Three book sourcing improves your ability to find profitable books to resell

• You can hit 8 sources in a day instead of one.
• When there’s a book that must be looked up manually, you know the 1% to dedicate time to and the 99% to avoid.
• When you find a book that has no listing on Amazon, you can isolate the books that will have a demand from the ones that are simply obsolete.
• You can clean out a book sale while your competition is still on the first table.
• You are a more motivated FBA seller, because your batting average is 100x higher than Level One sourcers.
• You can see value everywhere.

Don’t be mistaken, no matter how good you get at this, you’re never right more than a low-double-digit percentage of the time. But it remains far, far superior to Levels One and Two book sourcing.

Five facts that make pre-scanning mastery crucial

1. You can almost never scan every book.
2. You almost never should scan every book.
3. Over 99% of books cannot be sold on Amazon for $10 or more on Amazon.
4. Profits are directly tied into speed and quality of your scanning.
5. Value is not accidental – there are patterns.

If you’re not there yet, your goal as an Amazon seller should be to get to Level Three as quickly as possible.

#1 Priority: Learning the principles of Amazon value

With all this in mind, the question becomes: How can we strike the right balance between speed (of sourcing) and quality (aka your batting average, increasing the percentage of profitable books you pick up)?

The answer is in getting very clear about the principles that drive value.

Again, this isn’t sexy and this isn’t popular. But it is a fact. And mastering it will make you a lot of money.

So here is my years of experience on this subject in a short, four-part list.

The Top Four Principles that Drive Value Among Books

This is some next-level stuff. But everything you’re read to this point has been leading up to this.

The list that follows is not all-exhaustive. But here four biggest drivers of value.

If all you did was focus on these and learned how to identify them in a split-second and on a subconscious level, you would see a dramatic improvement in your “sourcing game,” a rapid rise to Level Three Sourcing, and a massive increase in your ability to find profitable books to resell.

Here they are:

#1 Principle of book value: The rule of recency

Books published in recent years.

The more time that elapses since a book is published, the more time for people to lose interest, and the more time for the used market to be saturated with increasingly cheaper used copies – to penny-book status, and lower (sub-$4 FBA offers).

#2 Principle of book value: The rule of relevance

Books providing value that have not diminished over time.

Very, very few books remain relevant long. Very few subjects do not evolve over time, making past books on the subject irrelevant.

Examples on one end of the spectrum: Virtually all computer books, becoming obsolete within 3 years; any book with a year in its title (“2011 RV Park Directory”).

On the other end: Advanced math books, which often remain as relevant 50 years later as the day they were published.

#3 Principle of book value: The rule of necessity

Books for which there is no substitute, for which no (or few) other books in the world are written.

These are the books that are so specialized, it’s likely (or impossible) that no other book on this subject exists anywhere. If someone wants to know about this subject (and they will), they have to buy this book. They simply have no other option.

#4 Principle of book value: The rule of micro-passion

Books for a small and irrationally passionate audience.

These are books on the secret reptilian race controlling the planet, and the history of collectible Garbage Pail Kids cards.

Note the key element of “small.” Practitioners of yoga are often irrationally passionate, but they also comprise every third person on the street… and every fourth book at any book sale.

How categories are different than principles

The Level Two Sourcer thinks in terms of categories:

“Travel is a bad book category. Textbooks are a good category.”

This is very lower-order thinking. No Amazon book category is “bad” or “good” in and of itself. (Think you have an exception? Some would say “Romance is always bad!!!” Well try this: Learn how to identify “Christian romance” or “urban romance” at a glance and scan a few of those. You’ll [often] be pleasantly surprised.)

Level Three Sourcing is where you identify what underlies value on Amazon – principles that don’t discriminate by “category.” Value is free-range and equal-opportunity across lines of “category”. It can show itself anywhere (even romance novels).

It’s not about titles or genres. It’s about the hidden forces that underlie it all.

If all you did was read this article….

You’ll start to get it really quick.

Study those 4 principles and apply them in the field, and you’ll see your batting average (and Amazon profits) increase dramatically.

The takeaway

Most of us are living under a false dichotomy: Believing we either must (impossibly) memorize the 50-million+ books in Amazon’s catalog, or turn into robots that scan everything randomly.

But there is another level. And you see it every time you hear about a seller pulling $5,000 worth of books from a sale in 90 minutes, or look across the room and see someone with the same tools who has filled a shopping cart, while you’ve barely lined the bottom of a basket.

Principle-driven pre-scanning: This is the secret of the top 1%.

-Peter Valley

PS: Have more questions, or just want to tell me I’m wrong? Leave a comment below.