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 $100? Sounds crazy, but has anyone tried it?
More results from this ongoing textbook pricing experiment forthcoming.
Have some insight? Post in the comments below.
Good info as usual. Is there a link to the webinar or was it private? Thanks.
Peter Valley says
It was a paid webinar I sent out an email about a few months ago. Get on my list for future ones.
i always enjoy when you learn something new! im gonna dabble in this textbook oa, since thats how i get about 95% of what i sell anyway, i may as well give it a shot.
Here is a question from someone who does not sell books. How do you sort textbooks? It seems like when my daughters were going to college that the text books from last year/two years ago no longer were the editions the same professor was requiring… my older daughter had many textbooks that my younger daughter in theory should have been able to use. But we quickly found out that when she took some of the same classes as her older sister, we still had to buy a new book cuz the old one was “no longer valid.” So, is there a “sell by date” or is some college somewhere else still using last year’s textbook? thanks
Peter Valley says
Sales Rank (and sales rank history, via Camelcamelcamel.com) is the only arbiter of a book’s demand. I never know where my textbooks go, or to whom, or why.
Jordan Malik says
Thanks for writing this, I’ve always maintained you can get ridiculously higher margins on textbooks when you sell via FBA vs. Merchant fulfill. When students ‘need it in 2 days’ their price sensitivity plummets. They’re paying for the urgency (and the irony is that via Amazon, they’ll likely still pay less than if they found the book at the college book$tore).
Peter Valley says
You should never underestimate how much value FBA adds, nor fail to price accordingly. PS I’m in a Starbucks right now, looking across the street at a college bookstore with “Closed” sign, which just went out of business after 40 years.
$50 for sure is the right price
Pat G says
Here is a question that I don’t think you ever addressed before
it is a little off task , but also has to do with text books and or all books we sell.
With “text books ” or ” all other books ”
Do you price a hard cover book vs. a paper back book differently ?? ?
Do you attempt to price or track them separately ?
Or track them all the same as just books.
One would think a hardcover book should demand a premium over paperback book ?
You thoughts would be great
As always thanks for all the great information
Peter Valley says
Simple answer: I price them exactly the same.
Quality Pages says
And Peter….what thoughts of book acquisition were going through your head as you considered the closed bookstore? Maybe there’s some way to cash in on it? Also, as to the hardcover vs. paperback issue: Like you, I price the same….however, it seems to me that paperback books often have a higher price than the hardcover, which is the opposite of how they are priced in stores. For textbooks, I assume that students may want something lighter and thus more portable for backpack carrying.(That’s only an assumption) When I am in doubt a price, I stick a $35.00 price on it and forget it. I have been surprised at how often it has paid off. Learned that from reading your articles…..many thanks!
Shawn Searcy says
Since customers receive the free shipping over $35, I’ll definitely price over $35, and personal opinion the Ranking only matters to us Sellers, NOT the customers. So if I have a newer 2011+ Chemistry Book, I’ve sold at $185 and had no problems selling it. Appreciate all the hard work on your Blog, keep up the great work and have a great 4th…
When does the crush of textbook buyers start? for Aug/sept and in January?
Peter Valley says
The peak week is the third week of August. Naturally it starts just before, so mid-month.
thanks buddy. BTW i just sold a VHS that i got because of your book. Sold it for $47.00 cost $1.00 not too shabby. It did take 2.5 months but who cares LOL!
Peter Valley says
I get 10x more excited about a $10 VHS sale than a $40 book sale. Love those obscure items.
Hi Peter, I have a book that has the same ISBN and UPC as the catalog listing and appears to be the same edition but it has a different cover. Do you know if I should sell it under the existing listing and just include my own photo or is a new listing page altogether required?
Peter Valley says
I never worry about it. If the ISBN matches it’s never been an issue for me.
I have a question about pricing regular books, you mention pricing 3.99 over the MF price when the book is at a certain rank. In my encounters so far most books are MF at .01. I don’t think you are pricing your books at $4.00, so I’m a little confused with this strategy. Thanks,
Peter Valley says
It’s pretty simple: I don’t sell penny books with poor ranks.
The open textbook movement.
Good for teachers & students…. bad for amazon sellers?
Us Amazon sellers ripping people off over texbooks are probably part of the reason this initiative got started. What do you reckon?.. Do you think it will have any long term effect?
Really torn on this one – as a 15 year online bookseller, I love to find a new way to make money. But as a parent that just paid for 4 years of college textbooks -I hate to be the one ripping off the kids. Most of them are going into hock for these overpriced useless textbooks (I say useless, because the instructors are required to have a textbook if they offer a class, but 9 times out of 10, the material has an online link, and all the material is online, and the books are re-sold as new because they were never opened, but the kid had to show up with the book at class). When buying daughter’s textbooks, the only acceptable version was the most recent, intact with the online code valid. When selling them, any value past a couple years was bottom of the barrel. The whole industry is tied with colleges and its a huge scam. No idea who’s paying these inflated prices but it isn’t students and parents I know.
the counter argument is that by selling for a high price, you support the resale value for kids who resell their books at the end of the semester, which ultimately lowers the cost to own. sort of like driving a car for more than 100,000 miles.
if a conveniently located (e.g. on campus) physical bookstore stocks the book new, then that is generally the cieling price. If the book is not available, then you are providing a great service by stocking an out of print book.
I have no qualms pricing higher for people who value 2-day professional fulfillment from a highly-rated independent bookstore such as myself.
I agree with those who are aggressive. The reason being is that the market (for textbooks) will bear it.
Some things to keep in mind.
Sales rank for text books is not as reliable as for other books. If a book doesn’t sell between Jan. and August, its rank creeps up, and then might sell 30 copies in a week in August.
Also, there are people who not price sensitive. They’ll pay $350 for a textbook without batting an eyelash.
So what I do is a price based on the new price. If the book new is $100, and is not available prime, then I price at a 50% premium ($150) for books under 1 million rank, and a 25% premium to new for higher ranked books. If the book is available new FBA/prime, then that is my cieling price. If there is more competition, I might use less agressive premiums but realize that there is concentrated demand over a 2-week period and often times competing books offered for less than you are offering are sold first, so at some point you may be the only FBA copy availalble. This is an area where an automatic repricer can be gold. For example, I was shocked a few years ago when I sold an ACT prep guide (ISBN 0768934400) for $330 a week before the exam because I had only paid ten cents for it and it was a few years old already when I sold it. The pricing software did the trick!
To me, its a numbers game. If I buy 10 textbooks for $10 or less aggregate, and I can sell a couple or more for $100+, then I don’t care that it might take a few years and cost me a little in storage. I turn my books over a lot slower than Peter does, and pay more for storage at Amazon, but that is cheap. I’m just more patient.
Also, to the poster above who gets excited about selling a VHS tape for $10, yeah, I get your point about how rare that it and I appreciate that success. But financially, making an extra $50 on a textbook, or several, if many times the reward even if many times less rare. Its a numbers game, and its more efficient and profitable to patiently make a lot on a book than to quickly make a few bucks.
Good way to market zen arbitrage!!! It’s great I have been using it for about a month now and now starting to see great results.Your empire set books,dvds,webinars,blogs,have helped me tremendously I found the holy grail of sources out of state I wish my wife would move:( thanks Pete
The million dollar sellers don’t make them GOOD sellers they just have lots of cheap inventory. So higher sales don’t make them smart.
One that you mentioned doesn’t use a repricer, so are they really THAT good?
They use off the shelf software, nothing custom. Hiring coders is easier than getting 10 illegals at home depot to landscape your house.
They also 90% or more MF than FBA. FBA to them is just a toy, if they get the sale or not, they most likely don’t care. 90% of their revenue is set.
As a million dollar seller I agree with you Biff, it certainly doesn’t make one smart but it does mean they tend to have more money on the line. That being said a smaller book seller will most often have a completely different buying and selling strategy. When large sellers buy truckloads of books they now have a sunk cost and list every single book possible to maximize profits. The alternative to listing is recycling for a very small amount of return (only in large volume).Only a select assortment go to FBA. The complexity seems to be formulating a pricing strategy which matches your buying strategy. These two elements must be in sync or your going to run into trouble.