Q&A: Should I ignore books that sell online for less than $10?
QUESTION: My business model is simply to avoid buying books that sell for less than $10. Though this has worked well for me and I'm bringing in a steady income, I wonder if I'm missing out on some profit.I've considered lowering my minimum price to $5 or $6. But even assuming I'm only paying about $1 per book, I wonder if this is worth the time and effort. I don't want to invest hundreds of dollars only to make a small return. However, I have plenty of storage space and time to work on my business.
ANSWER: I agree in principle with your notion of ignoring books worth less than $10, but I think you've set the bar a bit too high. Lots of people would probably disagree with me, but...
I think you should experiment with making your cutoff $6 or $7 instead of $10.
Here's the way I look at it: Say I'm at a library sale, and I spend 30 minutes there. I find five books worth an average of $20 apiece. All of the books are priced at around $1 or $2, so of course I snap up those gems in a heartbeat. Assuming I sell them all for about $20 apiece, I've earned a profit of about $100. Not bad.
And, let's say, at the same sale I come across another 10 books worth an average of $6 apiece. Let's say I'm buying those for $1 apiece, so assuming I sell them all, my profit margin (before listing fees or commissions) is $5 apiece. So, I've picked up an additional $50 worth of stock. I'm going to end up with 50 percent more profit without much more time or expense -- my time spent traveling to the sale and the transportation costs were spent already.
So I'm willing to snag those "commodity" books when that's the best option I see. And this gets to the real weakness of selling used books online as a business: The supply is finite -- there's only a certain amount of opportunity. Online bookselling is not something to get rich at, but the other side of the coin is, it's extremely low-risk and easy to start on a dime.
If you were willing to go to the trouble, you could analyze exactly how profitable this part of your business (lower priced commodity books) is for you. I've done this several times myself to judge how profitable certain inventory sources were for me, although I've never done it to analyze the effects of selling price alone. My tracking mechanism is to assign an SKU suffix to all the books in the category I'm considering. For example, I'll add an X to the end of all the SKUs for the category of books I want to track, so their SKUs are 1X, 2X, 3X, etc. Then when I want to run the numbers, I search for sales containing that SKU suffix and compare the sum of the sales to how much cash I've spent acquiring those books. How do I determine success or failure? Generally, I want to double my cash within a certain number of weeks.
Having said all this, these days I am ruthless about getting rid of low-value books that don't sell after a couple of years, and that adds considerably to the labor involved in this. Also, I've raised my bar considerably since I started selling six years ago. I remember when I'd be tickled to death to sell a book for $6.
posted by Steve Weber at 2/13/2007
6 Comments:
The Amazon sales rank is a factor to consider. I have no problem at all listing a $5.00 book when I know, because of the sales rank, that the book will sell in hours or days. If the sales rank is well into the six figures or over a million then a book less than $10.00 isn't worth the bother because it will sit too long on the shelves.
Another consideration is that if you have a lot of books in the $6 range you can quickly end up with shelves of deadwood when the price starts dropping. Then the time involved for handling the $6 books is frustratingly high and the return investment very low. Of course for me, once I've hauled a book home and then looked it up I've all ready invested time & money and have the tendency to list it anyway to try to atleast recover my original cash.
I agree with Anita. Sales rank is an important factor in whether I buy a book or not. If I find a book for a dollar with a sales rank under 100,000 that is light, easy to package and will sell for $5, I will almost always pick it up.
Time is also an imprtant factor, I am willing to make 2 or 3 dollars on a sale if the book is not a time consuming item (packing and listing time involved). In January, I found about 20 of the small Penguin classics paperbacks that students often have to read in English or history classes. I bought them for 1 dollar and priced them at 4.99. I had 3 or 4 of each title so it took me only a few minutes to list all of them. When a book would sell, it went in a mailer, the shipping label got attached, and it was off to the post office with my higher priced items. Each book took only a few minutes of my time.
I have sold about 15 of them already, and these sale have certainly helped pad my bottom line with little effort.
Books unlike vegetables [though palnt matter] don't spoil. Aside from post-purchase research; you should develope a knowledge frist based on your own interest. So when you buy you have an idea of a particular niche. Mine was Sci-Fi Art Books, History and Mysticism. Using the rule of thumb of how you teach yourself, apply the blueprint to widening your genre knowledge.
Long dollar$ or short dollar$ are also a consideration. Do you wnat the quick buck or the slow or very delayed big kill.
It will be mixed within any genre, vintage big ticket items and modern edtions in a flooded market to unload cheap and fast.
I've pretty much followed what Steve said, if any book with a high sales rank falls under the $6 mark (with few exceptions), then it goes straight to the Goodwill pile. That being said, I've had many books fall to this price that I forgot to get rid of, only to check a few weeks later to find that they were now worth $10-15 and after relisting I sold them and made some decent cash.
I've been surprised at some of the odd books I've sold...sometimes that book you almost wanted to toss at the library sale may sell 8 months later to some happy buy, you just never know unless you try. Another factor for me it sending a book to the toss pile is the size. If I have a 6 pound book that has a market value of $8 and a sales rank of 3 million, then its going get tossed real fast. For smaller books, I usually keep them around longer since they easy to store.
I think its good to sell books of all price ranges...you can focus on finding the valuable, high demand books while also keeping some slower moving stock that will help keep the cash coming in. I love fast selling books, but as is their nature as soon as I find them they are gone...but sometimes the competition for the fast sellers can change in the blink of an eye, and then its your slower moving books that might start selling. For instance, I recently had a steady stream of sales for the past month...and then last week the well ran dry. But then on Monday of this week...I had a bunch of items sell that had been sitting around for many months...which was quite a surprise, but it proved once again that you never quite know what some people are looking for!
One thing to consider is even those $10 titles often become dead wood. But that said, a $10 title that takes a long time to sell is still way better than the $5 title because the higher listing price gives room for a price drop. Assuming you paid $1 for the book and you drop the price from $10 to $8.50 and it sells you still make a decent profit. But is it worth your time to drop the price of the $5 book to something even lower? Probably not.
Post a Comment
Links to this post:
Create a Link
<< Home