The weird story of karma and revenge behind my Amazon trade-In & book buyback arbitrage tool.
In this article: how a competitor copying us inspired us to copy them, the 4 rules I set before releasing my new Amazon trade-in Arbitrage tool, how I set out to be an expert in trade-in & buy back sites, and what I learned…
Here’s the story…
Flashback: Zen Arbitrage gets hacked
By now, you’ve heard the story/scandal around Zen Arbitrage getting hacked by a competing “book arbitrage” tool, how we caught them, etc.
In the midst of sorting out how much data the culprits had stole from us, we got a look at a Chrome extension they were selling, purportedly to mine Amazon for “trade in arbitrage” opportunities. It cost a staggering $1,000, plus $97 a month. What does a $1,000 + $97/month piece of software look like?
It was kind of staggering. As in, staggeringly bad. Staggering simplistic. Staggeringly unimpressive.
What is “trade in arbitrage”?
The tool basically scanned Amazon one page at a time, looking for books that had fallen below their Amazon trade-in value, so you could buy a book at one price, and instantly trade it in to Amazon at a higher price, and profit the difference (in Amazon credit).
(Repeat: Amazon has suspended their trade in program as of 2020)
The trade-in data was incomplete. The profit estimation figures were completely insane. And the links were weird. Why would you link to Craisglist in an online arbitrage tool?
My developer said: “They charge $1,000 for this? This unbelievably simple. It would be really easy to make this, and make it better.”
This got my attention. Imagine the poetry of making a better version of a tool a competitor who stole data from us, then selling it for a fraction of the cost. The story would look like this:
- We get our data stolen & our book arbitrage software copied.
- We copy them, and do it 10x better.
Sometimes, you have to create your own karma.
The Karma Begins: Copying The Book Arbitrage Copycats
Again, the concept behind this tool was very simple:
Create a tool that scans the Amazon page, then alerts you for products that can be purchased for less than their Amazon trade-in or cash buyback site value.
This lets you lock in the trade-in or buyback price, buy the cheaper item, and profit the difference. And all you really have to do is surf Amazon.
Conceptually it’s pretty cool, but before I created just another software tool I wanted to set some ground rules…
The 4 things I told my developer before building this Amazon trade-in arbitrage tool
I told my developer there were four rules before we would begin building a clone of our competitor’s tool:
- Has to be better than them.
- Has to be cheaper than them.
- Has to be a 100% hands-off system.
- Has to work for credit & cash.
#1 was a programming problem, which was up to him. However the last three were 100% up to me.
Why I set these rules for the new Amazon trade-in arbitrage tool
The reason for #1 and #2 was obvious.
The reason for #3 was that I knew from reading emails from ex-members of his competitor that approximately half of them were overseas & needed a prep service to receive their orders.
I also knew people that trade-in and buyback arbitrage people were at the extreme end of the “run a business in my pajamas” spectrum. Many of them wouldn’t want to ever touch a book, and I needed the entire system to be virtual. This means I needed to find a prep service that would accept books for trade-in, which I knew was almost impossible.
The reason for #4 was because even if I threw my hat in the trade-in arbitrage game, I was not a trade-in person at heart. Turning $100 cash into $500 credit would do wonders for my record collection (yes Amazon sells vinyl), but it went against everything I’ve done and taught over many years. I’m a cash person (aren’t we all).
A good percentage of the ex-competitor’s members said the same thing: “I invested thousands of dollars and all I’m left with is useless Amazon credit.”
This means I needed a tool to mine Amazon for both trade-in and cash opportunities, and offer detailed training how to both turn credit into cash, and bypass trade-in altogether by using Amazon’s trade-in store to directly make cash.
How I became an expert in the Amazon trade-in and book buyback game
Once my developer got to work, I had my own work to do.
I set out to learn everything I could about the trade-in & book buy back sites. I wasn’t going to promote anything I wasn’t 100% enthusiastic about. And it goes without saying I wasn’t going to promote a business model that simply didn’t work.
What I learned was encouraging, even as an old-school bookseller. I learned things like:
- Just how often prices on Amazon actually drop below their trade-in value (its not insanely common, but it happens a lot more than I thought).
- The existence of book buy back sites (I barely knew these existed before, but I learned they will often pay more in cash than a book costs on Amazon, and they lock in a price – you don’t even have to wait for a sale.)
- How often book buy back sites will pay more in cash than you can buy it for on Amazon (This is where it gets even better: Instant cash opportunity, and skipping trade-in altogether. This happens WAY more than I thought.)
- Using trade-in values to detect severely underpriced offers on Amazon (so you can skip trade-in altogether, identify underpriced books, and make quick cash sales on Amazon for a profit.)
After digging into the data and spending months practicing it myself, I knew two things:
- This was a legitimate and profitable business model.
- The people teaching this material already didn’t realize its full potential.
Back to my four rules: Here’s how I accomplished each one
When I finished my research phase, I got back to my developer with the plan:
#1: How we made it better than the competitor’s $1,000 tool
- Historical trade-in data: Display dates of highest and lowest book trade in values from each semester, so you can time your trades to get the highest amount.
- Historical pricing data: Display dates of highest and lowest prices, so you can time your purchases to pay the lowest amount.
- Price differential figures: In terms of a percentage, how much higher or lower is the trade-in value or book price than average?
- Expanded book buyback site data: Display book buy back offers from more sites than any other tool.
- 12-month average sales rank: For those who want to skip trade-in and sell books, display a book’s true demand.
- Make it for not just books, but all categories: Display arbitrage opportunity for DVDs, video games, and everything.
- No-scroll searching: Display profit totals at the top of each page, then enable keyboard shortcuts to advance ahead pages and skip scrolling.
- No phony profit totals: Display real, locked-in profit totals; not speculative numbers backed by fuzzy math.
- Underpriced item detection: Alert to cash opportunities by buying underpriced items and selling them for quick cash back on Amazon.
#2: How we made it cheaper than the competitor’s Amazon trade-in arbitrage tool
(I’ll get to this in a second.)
#3: How we made the Amazon trade-in arbitrage tool 100% hands off
This one was hard. I had almost given up hope, but at the last minute I arranged a deal with an existing prep company: They would bend their rules, just for ZenTrade members, and accept books for Amazon’s trade-in & book buy back sites. As far as I know, they are the only prep service in the country to do this.
#4: How we made the Amazon trade-in arbitrage tool work for trade-in and cash.
This was the monster project, and the one that I was most passionate about. After weeks of scribbling in my notepad and coma-levels of caffeine, here was my “make cash with trade in” system in three parts:
- Complete credit-to-cash training. Let’s say someone goes for racking up Amazon trade-in credit. I created detailed step-by-step training videos for every way you can turn that credit into cash.
- Expanded book buy back data. I made sure people had the option of going straight for the cash by displaying more book buy back site offers than any other tool – cash offers that are often more than Amazon’s trade-in value AND more than what a book costs on Amazon.
- Underpriced offer detection. Using trade-in values to detect underpriced Amazon offers that can be purchased and then quickly sold on Amazon for a profit (i.e. “The Underpriced Book Hack”).
Last step: Time the release perfectly
ZenTrade was 95% completed for awhile. The decision to wait and release it when we did was very deliberate.
The last two weeks of December is the best time to get into the trade-in and buy back game.
- Textbook prices are historically at their lowest in December.
- Trade-values surge in late-December.
- ZenTrade is the perfect way to avoid your family during the holidays: Hide behind your computer and tell them you have to “work.”
We released Zen Trade in mid-December, and the final stage of our revenge was complete.
The hammer of justice falls
And that’s the story about how a competitor copied us, and inspired us to copy them right back.
Sometimes you have to make your own karma.
John H says
Sounds real good, congrats! When you say, “sell it back to Amazon for a profit, do you mean that AZ automatically buys it back?” IOW, we don’t have to ‘find’ a buyer that wants it? (I guess I’m asking whether we have to market the books we find, or is there a buyer already waiting.)
Peter Valley says
Yes, Amazon automatically takes the item and gives credit, or a book buy back site takes the books automatically and pay cash. Either way, no more waiting for a buyer.
If the price will double soon, then if we subscribe now, won’t the price go up for everyone?
Peter Valley says
No, current users will be gradfathered in.
Is there or will there soon be a phone app so we can do this at work till it allows us to leave our job, not sure what kind of money we are talking here so that may not be possible but a phone (Android) app would still be nice.
Peter Valley says
Chrome extensions unfortunately don’t work on mobile devices, but if you have a computer at work you can use it on any desktop.
Jerry Mungle says
Can I cancel anytime and stop the $47 per month payment?
Peter Valley says
Yes of course. I don’t play around with trying to lock people into contracts. Month to month.
When will the subscription price double?
Frequently, we can find really cheap books to trade in or re-sell, however, many of them are counterfeits as there are many counterfeits sellers out there now. How do you deal with this problem?
Also, how do you deal with books that are NOT as described by sellers? Wouldn’t this also be a problem?
I wish i would have known a tad sooner. Looks like I missed out on the special pricing
wow so it was $47? mmmmmm… hope will be discount lol