Three ways to turn
Last in a 5-part series on
In this article:
- Introducing “credit compounding”
- The three ways to turn
Amazon trade-in credit into cash - The Snowball Effect: How quickly will the cash add up?
- More revelations about ZenTrade (Update: ZenTrade is live. See all the details here.)
In the last week, we’ve covered a lot of ground related to
- Exactly how
Amazon ’s trade in program works. - Exactly why trade in credit arbitrage works (and what its limitations are).
- Specific numbers about the level of opportunity
- The 3 ways to profit off
Amazon credit abitrage - Top 5 tricks to find
Amazon trade in credit - Profiting off price fluctuations
- How to use trade-in credit to find underpriced books you can sell for cash.
- And more…
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.)
Warning: I’m aware trade-in sounds insane
I want to (again) address a question that inspired some outrage in my inbox after my first article in this series:
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:
- Trade-in mining tactics work for credit AND cash.
- 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:
- Someone who is extremely risk-averse and wants a nearly-guaranteed outcome.
- Someone who wants quick results.
- Some who doesn’t want to bother with the infrastructure of a “real business” (inventory, a seller account, etc)
Before we tell you how to turn it into cash, there’s another decision you have to make…
Credit compounding 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
- Cash out: Turn that credit into cash as quickly as possible.
- Credit compounding: “Trade up” to turn $120 into $150, and on and on.
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
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
- 20th 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
And to make this extra cool, the risk was slim to none. As covered in my “How To Profit From Amazon Trade-In Credit Arbitrage” article last week,
Taking this further: A second example, at 10% returns
- Initial investment: $100
- 1st book: $110
- 10th book: 259.37
- 20th 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.”
I’m assuming you’re already schooled on the basic formula (and if not, read the book – it’s free + shipping). I’m here to look at the numbers and how much money you can make with this.
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:
- Textbooks.
- Higher priced ($20+)
- High demand (<100,000 rank)
- 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
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
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” – Selling severely mispriced books for quick cash
As covered in last week’s article, the “Underpriced Book Hack” goes like this:
Anytime you can find a book on
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
So your only mission becomes:
- Cruise around
Amazon ‘s trade in store. - Look for items selling for close to their trade in amount (say, within 30%)
- Confirm the item is underpriced by reviewing the item’s price history in Keepa.
- Buy the underpriced item.
- Sell immediately on
Amazon for a cash profit.
By all angles, this is quick, low-risk cash.
(If you missed last week’s debut of this trick, read the article)
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
(Each “round” below represents each time you invest the proceeds into books and convert those books into cash).
Initial investment $100 (credit)
- 1st round: $150 (cash)
- 2nd round: $225
- 3rd round: 337.50
- 4th round: $506.25
- 5th 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
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)
- 1st round: $375 (cash)
- 2nd round: $562.50
- 3rd round: $843.75
- 4th round: $1,265.63
- 5th round: $1,898.44
Just for fun, let’s do that same math with $500 credit:
Initial investment $500 (credit or cash)
- 1st round: $750 (cash)
- 2nd round: $1,125
- 3rd round: $1,687.50
- 4th round: $2,531.25
- 5th 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
The buy back amount is always going to be less than what you can get for the book by selling it on
That said, this is a great formula for the aforementioned “risk averse” person, because just like
Few facts about book buyback sites:
- There are over 35 of them.
- They lock in the price and (most) pay in cash.
- There is huge variation in how they pay, conditions standards, etc etc.
- 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
By applying the same formula I outlined in last week’s “How To Profit Off Amazon’s Trade-In Program” article. Here’s the general outline:
- 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.
That’s the formula.
And that’s how you turn
-Peter Valley
PS: Any questions? Post in the comments below.
PPS: More announcements about ZenTrade
Before I proceed, I want to be clear: You do not need fancy tools to do anything I’ve discussed here.
I don’t pull that sleazy move where someone gives you a bunch of cool info and then tells you you have to buy something to make it work. I hate that.
With that said, if anything I’ve talked about over the last week sounds cool, I’m going to reveal some new details about ZenTrade, a new trade-in credit & book buyback arbitrage tool being released in a couple days.
- New features.
- Recapping exactly how it works.
Newly announced feature #1: ZenTrades scans the top buyback sites
Then we publish the top result directly below every book in
What’s better, ZenTrade alerts you instantly when there’s an offer on
Newly announced feature #2: Price-fluctuation email alerts
Want to know when
Want to know if you submit an item for
There are so many tricks that can be employed with all the data dispalyed in ZenTrade, I swear there’s probably 5 ways to profit I haven’t even thought of yet.
Recap: How Zen Trade works:
- Install in your browser (one click).
- Go to the
Amazon Trade In Store (any category). - Surf the trade in store for opportunity (find trade in opportunity on
Amazon or 3rd party sites). ZenTrade embeds trade in value (+ more) & cash buyback site offers on theAmazon page. - Find books cheaper than their trade in or cash buyback value.
- Lock in the trade-in (or buyback site) value on
Amazon . - Buy the cheap book.
- Ship it to
Amazon (or the third party book buy back site). - Profit the difference in
Amazon trade in credit (or cash)
ZenTrade Features
- Current trade-in value
- Current
Amazon price. - Instant
Amazon -to-Amazon trade alerts. - Instant
Amazon -to-book-buyback-site trade alerts. - Historical highest trade in value + date.
- Historical lowest trade in value + date.
- 12-month average trade in value.
- 12-month average sales rank.
- Percentage deviation from average (is it higher or lower than average?)
- One-click scan of over 40 other bookselling sites for cheapest copy.
- One-click scan of over 30 sites for highest instant buy back value.
- “Price Proximity Alerts”: see if
Amazon price is close to trade in value (to find severely undervalued books to sell for cash) - No-scroll trade-in mining: Profit totals displayed at top of every page.
- Email alerts: Find out instantly when the trade-in value of any book goes up.
- A video library on every trick for trade-in credit arbitrage.
Stay tuned for announcement any minute…
Update: ZenTrade is live. Get everything here.
PPPS: I want to make sure you caught every article this last week (they all compliment each other, and if you read one its worth the time to read them all)
How To Profit From Amazon Trade In Credit Arbitrage
“Textbook Money” Program Implodes
PPPPS: Remember, there’s a reason I’m releasing ZenTrade now: According to the historical data, textbook prices are lowest in mid-December, and trade-in values are highest at the end of December.
Also, claim your free book:
I’ve been doing some experimenting with this and I found that AZ can give you the option to either lock in your price, or you can actually get paid right away as long as you ship it in within a week. They’ll deduct it from your credit card if you don’t.
I’ve also found that it can you can sometimes do multiples for each transaction if they’re worthwhile.
Wasn’t aware of the multiples option. How do you confirm if they’ll accept multiples? I’m interested in this.
With the particular book I experimented with it just appeared on the Order Summary page where it says ” Your Trade In- List”. A “Quantity” amount bar appeared right underneath the title, above the payment amount. There was an option for 2, but no more.
I’m not sure how many titles this will work for. Maybe someone else can chime in?
I’d like to make sure I understand…. Trading in to “Amazon” will only generate an Amazon credit not Cash? If you had an Amazon “Sellers” (FBA) account then you could Cash out instead of having to take a “Credit” ?? TY, Mike
There’s a lot more to it and you can turn credit into cash, but that’s the basic idea. Also, cash buy back sites are abundant and those pay cash.
If l’m a FBA seller can I just ship the book from Amazon to my Amazon FBA? So I don’t have have to touch the book? Can I use FBA in the trade in process at all? Thanks, Alex