After 8 years of selling books on Amazon, I realize I was totally wrong about how to price textbooks.
How I learned I was pricing textbooks all wrong
Recently I co-hosted a webinar on sourcing books to resell on Amazon. During the Q&A, an attendee posed a question:
“If you had a textbook ranked 500,000, selling for a penny in used condition, with no Fulfillment by Amazon offers, how would you price it as an FBA seller?”
There were two other notable people on the webinar: Two huge booksellers each doing over a million dollars in Amazon sales.
I couldn’t wait to chime in on this. I wanted to hear their responses, and share my own.
I wanted to hear their responses because pricing is both where you stand to make (or lose) a huge amount of money. It is also the easiest thing to get totally wrong. I was extremely interested to hear how two Amazon mega-sellers price their textbooks (remember, textbooks follow totally different pricing laws than all other books, as I’ll recap below).
I couldn’t wait to chime in because I was arrogantly confident that I was one of the few FBA sellers who “gets it” when it comes to FBA textbook pricing, and that I was about to teach these Amazon mega-sellers how to really price textbooks.
I wasn’t prepared for their response. More on that in a second, but let’s just say my arrogance was about to take a huge hit….
Recapping my aggressive FBA textbook pricing strategy
You’ve read my aggressive textbook pricing strategy a million times.
If you’ve been reading my articles, you’ve heard me pontificate on what I consider an extremely aggressive textbook pricing formula. In the absence of any FBA competition, I have always said: price high. Really high.
How high? Up until last month, this was roughly my formula (excerpted from my article last August on FBA textbook pricing):
“Sales Rank of 1 to 30,000: Price $35 to $50 above the lowest non-FBA offer. Seriously. (I’ve had people pay over $100 more)
Sales Rank of 30,000 to 150,000: Price $30 to $40 above the lowest non-FBA offer.
Sales Rank of 150,000 to 300,000: Price $25 to $35 above lowest non-FBA offer.
Sales Rank of 300,000 to 600,000: Price $15 to $25 above lowest non-FBA offer.
Sales Rank of 600,000 to 900,000: Price $10 to $15 above.”
Like a lot of counter-intuitive advice I advocate, I got a lot of pushback on this from Amazon sellers who cried out that pricing this high “doesn’t work.” I like to advocate unpopular approaches to Amazon selling, and let the numbers and results speak for themselves.
Of course none of the naysayers had ever actually tried pricing their textbooks this high with Fulfillment by Amazon. Because if they had, they would know it works.
Recapping why pricing textbooks this way works
If you’re new to how to price textbooks, or the concept that textbooks follow totally different pricing laws than other books, I have to recap.
There are three reasons that, as a Fulfillment by Amazon seller, you can price textbooks insanely higher than non-FBA offers and still get sales. They are:
- Urgency (people need their second-day shipping),
- Amazon Student program (Amazon Prime for college students at a discounted rate), and
- Some mystical factors that none of us understand.
There are other reasons, but these are the big ones.
Take my word for it when I say:
“With textbooks, people will pay way, way more for FBA offers than in any other category.”
How did the 7-figure booksellers respond to the textbook pricing question?
Back to the webinar.
Before I answered the attendee’s question (“As an FBA seller, how would you price a textbook ranked 500,000 with no FBA competition?“), two things flashed through my mind:
1. “I’m going to show everyone how to really price textbooks.”
2. “Get ready to defend yourself Peter, because even the mega-seller experts are going to fight you on this.”
“I would price it at $25.”
<Pause. Wait for pushback.>
Million-dollar mega-seller #1 response
“Probably $35, maybe more.”
Million-dollar mega-seller #2 response
That’s when I realized I’d been pricing textbooks all wrong
As much as I thought my textbook pricing formula was “aggressive” and “unorthodox,” when it comes to Amazon sellers who really knew what they’re doing, and who really make money on Amazon, I looked like a cowardly hobo begging for change on a street corner.
Ever smugly thought you were an “expert” and had it all figured out, then the real experts swooped in and put you in your place?
Just like that, the textbook pricing formula I’d practiced (and advocated) for years was obliterated.
Imagine making an extra 50% per sale on Amazon
What would it mean for your Amazon business if you were making 40% to 100% more per sale?
Few of us are exclusively selling textbooks. What about me? A very large percentage of my revenue is from textbooks. I also know my biggest Amazon sales don’t come at Christmas, they come in the August & January textbook rush.
So knowing I can consistently price textbooks on Amazon at $35 or $50 above non-FBA offers and still get sales has massive (massive) implications.
For years I had limited my really outrageous pricing (more than $25 higher than the lowest “merchant fulfilled” / non-FBA price) to textbooks with an Amazon sales rank of 30,000 or better. Maybe as far up as 150,000, but I felt even that was a stretch.
Pricing a textbook ranked 500,000 this way? I didn’t think it would work. And I never had the courage to try.
Testing this textbook pricing formula
Of course, it worked.
Since launching this textbook pricing test, I’ve sent in one large-ish shipment of textbooks. And yes, I’ve been getting sales at $40 and $50 above the lowest non-FBA offer.
I now consider all bets off with textbooks
Right now, I’ve wiped the slate clean of all my past assumptions on textbook pricing and am considering anything possible. If people will pay $50 more for FBA offers, why not $100? Sounds crazy, but has anyone tried it?
More results from this ongoing textbook pricing experiment forthcoming.
Have some insight? Post in the comments below.