Posted by Adam on March 22nd, 2012 / 0 comments
Hey guys, Adam here. I apologize for the long delay in blog posts. I’m concentrating the huge majority of my time now on building my first web application called eBizControl. I’m really excited about it because it’s going to save people so much time and also give them some deep insight into their expenses so that you can concentrate on what’s making the most money and forget what’s not. When I first started it, I was in WAY over my head. Building a full-featured web application like this is much more than what I had anticipated. This is why it’s taken over 2 years to get where I am now. Anyway, enough about my new online endeavor.
If you can believe it, my own book business is still kickin’ albeit not as profitable as it once was. At it’s peak, it was grossing ~$10K/month. Nowadays, I literally spend less than an hour a week managing it. Even though it’s not near what it was once, it’s still grossing $2-4K/month now. How? 2 reasons. FBA and selling on consignment. You see, when I was hitting it hard spending 10-15 hours/week sourcing, listing and fulfilling orders along with two employees helping me I seem to have accumulated a large backstock of books; one of the benefits of not just listing low sales rank books.
These kind of books known as "long tail" books were the books that would scan as a low selling price of $50 but would have a sales rank in the 3,5,6, even 10 million range. Some people thought I was nuts for messing with those books but I’ve always been one to think for the future; not for the now. I figured as long as I had the space I was going to fill my warehouse from floor to ceiling with these high sales rank books. They’ll sell SOMETIME, right? Yep. They didn’t sell right away of course but I’m still selling a couple books/day now that I’ve had sitting on my shelf for over 3 years just waiting for that special person to come along.
So, in a nutshell, do not rely on low sales rank of even sales rank at all sometimes in your decision-making as to what to purchase and list. If you’re hard at it now, you may be like me someday where your book business may become a small side business/hobby and you’ll get to enjoy nearly completely passive income.
Another thing I wanted to mention was my first endeavor into selling books on consignment. I wasn’t really looking for such an arrangement but word got out that I sold books online and a guy approached about it. Turns out he has a lucrative source for textbooks but doesn’t want to mess with the listing and fulfillment process. I was hesitant at first because I really wasn’t looking to expand the business but after careful consideration I figured it was better that risking my own dough buying inventory when I could get it for free. After almost 6 months of selling textbooks on consignment I can gladly say it’s worked out well for my pocketbook but not for my time management.
Being a web programmer now, the first order of business I did, but far don’t expect everyone to do is to develop a small web script to give to my consignee. This allows him to scan books before handing off to me to ensure he will ONLY give me the books I’ll accept. He scans a book, it checks Amazon for weight, low price and few other things then runs through my rules and outputs an either ACCEPT or REJECT. It’s working out very well. He’s able to scan everything he has and I can then pick up the books that I know I’ll able to make some cash from. I’ve decided to release that here if anyone else is a web programmer or may know someone that can help you implement this. I’ll also offer to help with this at a cost of $50/hr with a 1 hour minimum. If you’d me to help out, please email me at adam [at] sellyourbooksonline.com. DOWNLOAD THE FREE PRICE CHECKER HERE.
Selling on consignment along with selling your own books under the same account can sometimes get a little hairy. This was a new venture for me and I really learned a lot along the way. I thought it would be beneficial to you guys to share a little of what I had learned. Here are a few tips that will help you selling items on consignment.
- "Tag" your consignee’s items
This is essential to keep track of what’s yours and what’s theirs. Depending on what software you use (if any), this can be very different. I use Monsoon so I setup a specific classification for my consignee’s books. This classification gets remembered when the order comes in. I can then easily run some custom reports that I created to pull out those books to get sales totals. If you don’t use any listing software, you could probably use a SKU prefix such as "CONS-ABC123" meaning this is an item you’re selling on consignment, for example.
- Settle on fair compensation for each sale
It’s going to get hard but you’re going to have to get used to a fairly low sales percentage you get to keep. I’m keeping 35% of the total PROFIT from every order. This is 35% of the total sales price minus Amazon fees, shipping supplies, postage, etc. Be sure to make it clear what’s expected ahead of time. Is it a percentage before or after all expenses are paid?
- Set your minimum sale price accordingly
If you’re now only getting 35% of what you used to, you have to jack up the price considerably to still make it worth your while. Run the numbers like you did (you did, didn’t you?) to figure out what your minimum sale price will be prior to listing. You don’t want to get into a situation where you’re losing cash after you’ve paid your consignee. This also means keeping your repricing strategies different as well.
This tip goes hand in hand with the previous tip. The reason I mention this one last is because I’ve came across so many books that I’ve been given that simply have no value. I simply assumed the books I was given were valuable. Always spend the time to check prices ahead of time. You’re just wasting your time if you’ve got a minimum price of $15 bucks set in your pricing rules and you list a book that’s worth $5, that book’s going to be sitting on shelf for years.
I hope this long overdue post has helped some of you out. As always, feel free to contact me if you have any questions.