What’s the story with “Amazon Warehouse Deals”?

We’re in the middle of textbook season, when nearly everything used in a classroom flies out the door. This is my second year in a row making more in the two weeks after Christmas, than the two weeks before. How is this possible? As covered in the last post, I credit this to taking penny textbooks and pricing them at a flat $25. But I already covered that.

If you’re selling textbooks, you’re noticing this year that your biggest competitor is probably Amazon itself. “Amazon Warehouse Deals”, Amazon‘s used-book arm, dumped a TON of textbooks on the market this year, making it very difficult to compete on some titles. Often they will have a dozen or more of the same title, meaning that unless the book is very well ranked, you either need to match their price or “hold out until they sell out.”

What is “Amazon Warehouse Deals”?

To state the obvious, this is the seller name for Amazon when it sells used books. But why does Amazon have used books?

The prevailing theory is that Amazon Warehouse Deals titles are the castaways for Amazon‘s textbook rental program, which is handled by an outside company called Noram International. Whatever excess falls into Amazon‘s possession is liquidated through Amazon Warehouse Deals.

How to compete

Like I said, they dumped a ton of textbooks on the market this year. In my opinion, they price their books far lower than is necessary. One would think that with all the sales data and algorithims at their disposal, they would price optimally for the FBA (Fulfillment by Amazon) environment, and always price at the highest amount the market can bear. I don’t really see them doing that.

However, all FBA (Fulfillment by Amazon) sellers in the short-sighted “always price only $3.99 higher” school should take note that Amazon doesn’t even need the money as badly as you do, and they still aren’t this foolish. While Amazon Warehouse Deals doesn’t price as high as they could, they don’t always price for the bargain basement either. That should be a sign for some of you.