Q&A: How much do we have to undercut Amazon to get a sale?

QUESTION: Amazon now shows their book listings at the top of the list, above our Marketplace listings, unless we undercut Amazon by more than $3.49 -- the amount the buyer pays for standard shipping. This is somewhat misleading to the buyer, implying that every purchase from Amazon qualifies for free shipping.

My question: Do you think this is forcing prices even further downward? Are there any statistics showing how many people actually buy more books to get the free shipping deal? Are we effectively now having to give free shipping to compete with Amazon?

ANSWER: I'm not sure if it's driving prices downward -- my guess is yes. But there is no doubt that this policy has made our Marketplace listings less competitive against Amazon's.

There are no statistics on this, all we can do is guess. My guess is that about one-third of customers don't consider our Marketplace listings, even when we've got the best deal. Some people just believe it's "safer" buying from Amazon. And I suppose there's another big chunk of buyers who just buy the first listing they see, regardless of the feedback or the price.

But I would not arbitrarily discount by $3.50 below Amazon's price unless the average price is well below there. If there is any demand for the book, a smart buyer who doesn't qualify for free shipping is going to buy from you. So, if possible, wait for the smart buyer.

It's tough to compete with a landlord that gives themselves top billing and a sign that says "Fulfilled by Amazon." Here's a good example of how tough it is to compete: Currently I'm conducting an experiment by selling some slightly shopworn copies of my book Plug Your Book on Marketplace for $11.99. It's a new title so there's no used copies listed except for my listing. So here's the way it looks:

Now, you'd think I'd be getting most of the sales, right? The buyer saves $7.50 if they buy from me and pick standard shipping, versus buying from Amazon and paying for standard shipping. Even if they qualify for Amazon's free shipping, they still save $3.51 if they buy from me.

But I'm only getting about 30 percent of the sales -- the rest are going to Amazon and the Marketplace sellers who are selling new copies.

Q&A: How can I avoid repricing scams?

QUESTION: I'm concerned that unscrupulous sellers on Amazon Marketplace might scam Marketplace vendors who automatically reprice their inventory to meet the lowest price.

For example, assume the market price for a specific textbook is $80, but student X doesn't want to pay that much. He knows about automatic repricing, so Student X offers to SELL the book on Amazon for $45, even though he doesn't have a copy. He waits for the automatic repricers to match his price, then he buys it cheap. It seems like this could be just the sort of "insider tip" that could spread like wildfire across college campuses.

ANSWER: I think this type of thing is already happening and will only increase as more students buy books online. I wouldn't be surprised if some "real" booksellers are using this technique to see if they can outsmart (or even sabotage) their competition.

There are several ways to avoid this trap. It's smart for sellers to have a "rule" that any price change over a certain percentage or dollar amount won't be automatic. Here's another way to approach it: Set a minimum price for each item, so you're essentially preventing the price from going below your wholesale price or your target price.

Another safeguard is to eyeball the competing sellers. For example, any time I reprice a book over $20, I check the feedback of the sellers with lower prices. If someone without a track record is lowballing, I'll ignore that listing.

As third-party repricing software has gotten more sophisticated, they allow you to specify these types of rules. For example, AMan has a "Price Watch" feature which prevents major upward or downward deviations in price. And it has a graduated decline feature where you can specify that your price will be lowered by only by a certain amount.

Kevin O'Brien, who developed AMan, says there's another perhaps less-common shenanigan some sellers use. The seller will raise their price on a book temporarily, trying to get you to raise your price too. Then they'll come in at a much lower price, trying to get a quick sale while you're at an uncompetitive price.

If anyone has more techniques or tools for avoiding these kinds of scams, please add a comment.

Q&A: How often should I reprice my books?

QUESTION: What is the best frequency for repricing? I used to do it every two or three months, then monthly. Now I do it every two weeks, and I still don't know what interval is best. I drop prices just a penny below the lowest matching my condition. What have you found to be the ideal timing?

ANSWER: That's a tough question, and there are countless ways to approach it.

No seller likes to lower their price, but sometimes it's necessary if you realistically expect to make a sale. Sometimes your repricing chores can pay off nicely -- when you find an opportunity to raise your price.

At one point I repriced at least once a day, usually twice. Nowadays I probably reprice once every couple of months. I have never sat down to figure out which is the most profitable. Sometimes I sell my books at a higher price because I haven't chased the price down -- and the market price eventually comes back up to where I've been sitting. On the other hand, sometimes my books become totally worthless -- and maybe I could have gotten a sale, but now I have junk that will never sell.

Sometimes I use automated repricing for books worth less than $10 or $20, but I usually take the time to individually consider price changes for books worth more. The higher the price, the more likely the buyer will consider factors other than price -- like feedback. Especially for these pricier books, you need to go with your gut instinct: Will demand for the book probably rise, or fall?

My hunch is it probably doesn't hurt to lower your price at penny or so at a time to keep your visibility -- as long as it doesn't eat up other time that you could be devoting to getting new stock, etc.

However, by lowering by "a penny or so at a time," I don't think it's smart to use software to lower your price by a pennies several times a day. For example, I was recently watching one book on Marketplace where there is a short supply of used copies, and the book normally sells for around $18. There were two sellers battling to have the lowest price. They were lowering their price by 6 cents each time -- every several minutes! It had to be automated repricing. The point is, over the course of an afternoon they chased the price down almost $3 until one of the copies sold. The price went right back up, so one of those seller left $3 on the table. That's just one example I happened to see with my own eyes. I'm sure there's lots of cases where automated price-cutting is leaving a ton of money on the table for some sellers.

Does anyone else care to share their strategy on optimal repricing?

Q&A: Can I revive my online bookselling with signed books?

QUESTION: I have been buying books and listing them on Amazon for about six weeks now. I love the business but am in a lull period. I have sold 23 in the past month but none in the last five days. I primarily buy at Goodwill stores and I've found some gems. I also find many books that seem like interesting, possible good sellers but turn it turns out Marketplace has 200-odd listings starting at 1 cent.

Now I have about 130 books listed but nothing is selling. Should I be concerned? Should I continue to buy and trust that books will eventually sell?

Also, is a book signed by the author usually a good purchase?

ANSWER: To keep your sales going, you must add new listings constantly. That's because you inevitably end up with a certain percentage of books that never sell. If you quit listing new books, most of your attractive books sell, and sales dry up. The longer you sell, the more duds you end up with, and eventually have to get rid of.

If you haven't checked your prices lately, you might have been undercut by other sellers. In that case you'd need to come close to their price to maintain your visibility on Amazon's page, if you want to sell the book soon. Be careful about lowering the price of your expensive books. But for the cheapies, you've got to come close to the lowest price -- the bargain shoppers tend to grab the first thing they see.

Also, you may want to try some additional places to find books beyond Goodwill, like library sales and estate sales. You're fortunate to find anything in a Goodwill in my opinion -- the ones near me have been picked clean to the bone.

About autographed books: I've never gone out of my way to find signed books, but I've ended up with quite a few. The best one was a book I paid 25 cents for that turned out to be signed by Eleanor Roosevelt (but it wasn't a book she had written).

I've seen both sides of the coin. I've had lots of autographed books where there was no demand and I could never sell it. On the other hand I've gotten lots of autographed books where the signature added some value to the book. But none of my signed books were a case where the signature added much collectible value to the book. Amazon isn't a good place to sell collectible books, not yet at least. I hope that will change.

So in a nutshell, look for a book that's already a strong seller. Then the signature will be worth something.

Q&A: Why are some books priced so high Amazon Marketplace?

QUESTION: I was listing an audiobook for sale on Amazon and noticed a huge price variation. There were two copies for sale. One was listed at $9.35, and the other was listed at $100.

Both are used, not collectible. Obviously, one is priced wrong. How can I find the real value?

I also have a book with a similar discrepancy. The low price is $39.82 but the next copies are priced $114.26 and $197.34. Usually I like to price my books at the lowest price and make a quick sale, but I don't want to leave money on the table.

ANSWER: There are several sellers on Amazon who act as drop-shippers. They copy the listings of other sellers and triple the price, at least. They export these pilfered listings to all the bookselling sites and hope that some inept buyer overpays them. Then they buy from a seller who actually has the book, has it shipped directly to the real buyer, and the drop-shipper pockets the difference.

Usually these drop-shippers are easy to spot: Their feedback is horrible because so many of their customers never receive what they paid for. (I haven't taken a close look at these listings you mentioned, and I'm not accusing any of the sellers here of anything. I grossly overprice my listings occasionally by hitting the wrong keys on my keyboard.)

Most books are in such plentiful supply on Amazon, the going price is obvious simply by glancing at the Marketplace listings. But for books in shorter supply, like these two, it helps to do a little research. A good way to double-check the value of a book is to search its ISBN at Addall or BookFinder.

These comparison sites will show you the lowest prices on all the major bookselling sites and usually give you a clear idea of a book's market price and scarcity. If you still don't find many copies at that site, it's best to play it safe and price your listing high until you can research further.

I'm not sure about the price of your audiobook -- it's scarce but the demand for old cassette audiobooks is not tremendous. Your book, Food and Beverage Market Place, could probably sell for a good price if it was a bit more recent. Business directories can sell for good money on Amazon, even if they're a few years old. Consider the buyer's alternative: paying nearly $600 for the current edition.

The only problem is, your copy is six years old, and is probably woefully out of date, since there's undoubtedly been turnover among the people listed in the directory. Used copies of the 2006 edition are available for around $200, so you'll certainly have to beat that price to get a sale. In this case, I'd go with a price under $40. This is definitely a book that won't appreciate.