How To Turn Amazon Trade In Credit Into Cash

Three ways to turn Amazon trade-in credit into cash (or turn cash into more cash)

Last in a 5-part series on Amazon trade in credit arbitrage

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 Amazon trade-in credit arbitrage:

1. Exactly how Amazon’s trade in program works.
2. Exactly why trade in credit arbitrage works (and what its limitations are).
3. Specific numbers about the level of opportunity
4. The 3 ways to profit off Amazon credit abitrage
5. Top 5 tricks to find Amazon trade in credit
6. Profiting off price fluctuations
7. How to use trade-in credit to find underpriced books you can sell for cash.
8. 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:

1. Trade-in mining tactics work for credit AND cash.
2. 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:

1. Someone who is extremely risk-averse and wants a nearly-guaranteed outcome.
2. Someone who wants quick results.
3. Some who doesn’t want to bother with the infrastructure of a “real business” (inventory, a seller account, etc)

Amazon trade-in credit arbitrage appeals to a certain kind of risk-averse seller who wants quick results and minimal risk.

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 Amazon credit. Here are your two options:

1. Cash out: Turn that credit into cash as quickly as possible.
2. 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 Amazon trade in credit arbitrage, and hunting down opportunity takes time. But the opportunities are out there and there’s no limit to how far you can “trade up.”

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
• 20^th 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 Amazon credit. It took some time to get there of course, but through the miracle of this kind of “compounded interest,” and using some very conservative math, you got there.

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, Amazon guarantees the price and locks it in, so short of shipping them a damaged or incorrect book, that amount is guaranteed.

Taking this further: A second example, at 10% returns

• Initial investment: $100
• 1st book: $110
• 10th book: 259.37
• 20^th 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:

1. Textbooks.
2. Higher priced ($20+)
3. High demand (<100,000 rank)
4. 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 Amazon trade credit (or cash, for that matter) and turned it into $150 in cash in 30 days. Consistent 50% returns are virtually unheard of in any investment anywhere (that I’m aware of), so this is pretty amazing in and of itself. But of course, it gets better…

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 Amazon trade in credit into $500 in cash in 120 days.

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 Amazon that is selling for “close” to the trade in value, that is a strong indicator that book is significantly underpriced by the seller (probably by accident).

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 Amazon is offering for a book would be lower.

So your only mission becomes:

1. Cruise around Amazon‘s trade in store.
2. Look for items selling for close to their trade in amount (say, within 30%)
3. Confirm the item is underpriced by reviewing the item’s price history in Keepa.
4. Buy the underpriced item.
5. 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 Amazon commissions. Possibly leaning towards optimistic here, but these opportunities are not uncommon.

(Each “round” below represents each time you invest the proceeds into books and convert those books into cash).

Initial investment $100 (credit)

• 1^st round: $150 (cash)
• 2^nd round: $225
• 3^rd round: 337.50
• 4^th round: $506.25
• 5^th 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 Amazon.

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)

• 1^st round: $375 (cash)
• 2^nd round: $562.50
• 3^rd round: $843.75
• 4^th round: $1,265.63
• 5^th round: $1,898.44

Just for fun, let’s do that same math with $500 credit:

Initial investment $500 (credit or cash)

• 1^st round: $750 (cash)
• 2^nd round: $1,125
• 3^rd round: $1,687.50
• 4^th round: $2,531.25
• 5^th 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 Amazon‘s trade-in program before last week:

The buy back amount is always going to be less than what you can get for the book by selling it on Amazon.

That said, this is a great formula for the aforementioned “risk averse” person, because just like Amazon‘s trade-in program, book buyback programs lock in a price and guarantee it for a set number of days.

Few facts about book buyback sites:

1. There are over 35 of them.
2. They lock in the price and (most) pay in cash.
3. There is huge variation in how they pay, conditions standards, etc etc.
4. 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 Amazon trade in credit. How do you utilize book buyback sites to “trade up” and walk away with significant cash?

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 Amazon credit (or cash) into more cash, and on and on until you end up as Scrooge McDuck in a top hat sitting on a giant pile of gold coins.

-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 Amazon‘s trade in store (within the ZenTrade interface).

What’s better, ZenTrade alerts you instantly when there’s an offer on Amazon for sale for less than a buyback site – i.e. instant arbitrage opportunity.

Newly announced feature #2: Price-fluctuation email alerts

Want to know when Amazon‘s trade-in price rises to the amount you’re looking for? ZenTrade lets you set an email alert, and we’ll let you know instantly when any book reaches that amount.

Want to know if you submit an item for Amazon‘s trade in program, and the trade-in value rises before you ship – allowing you to cancel and then resubmit at the higher price? With one click, ZenTrade will alert you when the trade in value of any book you buy goes up in the first 7 days.

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:

1. Install in your browser (one click).
2. Go to the Amazon Trade In Store (any category).
3. 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 the Amazon page.
4. Find books cheaper than their trade in or cash buyback value.
5. Lock in the trade-in (or buyback site) value on Amazon.
6. Buy the cheap book.
7. Ship it to Amazon (or the third party book buy back site).
8. Profit the difference in Amazon trade in credit (or cash)

ZenTrade Features

1. Current trade-in value
2. Current Amazon price.
3. Instant Amazon-to-Amazon trade alerts.
4. Instant Amazon-to-book-buyback-site trade alerts.
5. Historical highest trade in value + date.
6. Historical lowest trade in value + date.
7. 12-month average trade in value.
8. 12-month average sales rank.
9. Percentage deviation from average (is it higher or lower than average?)
10. One-click scan of over 40 other bookselling sites for cheapest copy.
11. One-click scan of over 30 sites for highest instant buy back value.
12. “Price Proximity Alerts”: see if Amazon price is close to trade in value (to find severely undervalued books to sell for cash)
13. No-scroll trade-in mining: Profit totals displayed at top of every page.
14. Email alerts: Find out instantly when the trade-in value of any book goes up.
15. 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

The Underpriced Book Hack

Profiting Off Timed Trades

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.