Hello, all!  Yes, I’m still alive but judging from the last post I would have probably thought I was dead.  The reason for the long post hiatus was simply a strategic time management decision.  You see, this blog, my used book business, my new web app eBizControl, my full-time job and my family take up a lot of time.  Oh, don’t forget about sleep.  I’ve decided to trim some of the activities and regular blog posts was one of them.  I hope you understand.  In any case, I recently received an email from Susan Scheck for a request to write a blog post.  I said absolutely!  You’ll find that Susan’s stories may closely resemble your own.  This is why I really enjoy these types of posts.  Thanks for being a reader!  – Adam

I’d like to share with you a source that, on occasion, can turn up some decent, if not amazingly profitable, books: university and college libraries. Most libraries, as we know, have periodic or ongoing book sales, and university and college libraries are no different.  If you live in an urban or suburban area, there are likely to be several within a comfortable distance. For example, I live within a half-hour’s drive of six colleges and universities, and another three more can be found within a 45-minute drive, so there’s always a ready source of books close by.

Once you’ve called your local libraries to find out book sale details and to make sure they are open to the general public (chances are they are), you can start scouting. I use ScoutPal on my cell phone, which for the last week has been a free trial (I’m new to serious scouting). Yet, in the last week, I’ve purchased about 35 books from one library, all in new or used-like new condition, without the usual library markings. In fact, in speaking to the sales clerk I found out they had been donations—and she also told me that it happens frequently enough that dealers come there to buy books. Music to my ears, even though I have some competition.

Below are some paperback books I found today, typical of what I have found so far:

Exchange Is Not Robbery: More Stories of an African Bar Girl (Paperback)
New: 9 from $17.99
Used from: $7.48 (Used: acceptable)
Rank: #1,954,335 in Books

Religion and Healing in America (paperback)
12 new from $31.41
19 Used from $20.00
Amazon Sales Rank: 347,724

Rethinking God as Gift: Marion, Derrida, and the Limits of Phenomenology
(Perspectives in Continental Philosophy)
12 New from $22.00
4 Used from $22.85
Amazon Sales Rank:1,183,918

And now, the hidden gem:

Religion, Revolution and English Radicalism: Non-conformity in Eighteenth-Century
Politics and Society
List Price: $74.00
15 All from $71.46
12 New from $71.52
3 Used from $71.46

Amazon Sales Rank: 532,574

You will notice that this last book is selling used from within $3 of the list price, and the new and used prices are pennies apart. The icing on the cake: the sales ranking. This is an expensive book that is on track to sell fast. In fact, I suspect it might be on more than a few required reading lists for the upcoming semester.  That’s another plus when sourcing from university libraries: the books are scholarly or semi-scholarly, so they may command higher prices and be in high demand several times a year, at the start of each academic semester. The flip side of this is that it’s common to find rankings in the three or four millions, yet it’s just as likely you may find books with a higher rank and with the potential to command a higher price. When you pay 50 cents or $1 per book, like I did, it’s just too good an opportunity to pass up. So go back to school—and bring a backpack.

After many long months of delays I’m proud to announce my newest eBook entitled How to Source Used Books is finally done!  I originally hesitated writing this due to the amount of detail I reveal in it.  Frankly, I was a little scared at first for fear that revealing this information would somehow affect my own sources.  I don’t just say this for marketing fluff.  It really did take me awhile to get up the courage to write this eBook!  However, after I thought about it and how I regularly tell readers that I’m 100% open with everything it would be almost hypocritical of me to hold back this information.  Also, because my readership is on an international scale I think I can take my chances that no one that purchases this eBook lives close enough to me to matter.

What makes this eBook different is that I not only tell you all my sources and every source I’ve heard of but I teach you how to get your own sources!  I think giving you a list of sources and saying good luck isn’t enough.  Everyone’s situation is going to be different and what works in my area may not work in yours.  This is why I wanted to teach you skills and idea-generating topics so that you could apply the same principles I use just in your own way.  I’m very excited to finally get this newest eBook completed and hope that it really helps your business.

I’m also offering my always 100% money-back guarantee on this eBook so no need to feel like you’re taking a big risk.

If you value your business and are running short of books to sell this is the eBook for you.  It is the most important piece that has allowed me to grow my business and I’m sure it will help yours as well.

- Adam

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Hi guys.  Adam here.  I know it’s been awhile since a post and I apologize, but I’ve got a great post for today and some exciting news!  Summer is upon us and it’s time to start getting out there and finding some books to sell.  I always hated scouting in the winter because of the gloomy weather but the spring and summer time was pretty fun.  Since I started buying in bulk long ago I haven’t been able to get out and enjoy the weather but financially it was the best decision for me.

In any case, for all of you out book scouting hitting up those yard sales, thrift stores and FOL sales I’ve got an important announcement for you.  Also, for anyone that has decided to reel in books by the ton instead of by the title and buy in bulk I’ve also got something important to share.  The inventory sourcing eBook I’ve been promising forever (sorry!) is finally nearing completion!  It will be available via the email list first starting on Friday, May 20th.  You’re already signed up aren’t you?  I’m finally setting a date so you can hold me accountable.  I could give you some lame excuse at how I was too busy and that I was diligently working on it 24/7 for all this time but that would be a lie.  Family, friends, work, books, eBizControl, a new inventory receiving app I’m working on and life simply trumped the project for awhile.  I have, however, managed to spill my brain into this thing and literally take dozens of hours dumping every source I’ve ever used or have known to be used in this eBook.

I’m very proud of this eBook because it’s not conventional in any way.  I don’t simply give you a spreadsheet and say “Here’s your list of sources now give me your money.”  However you can just give me your money if you really want to.  In all seriousness, I attempt to give you the tools and show you HOW to source books not just WHERE to source books.  Don’t get me wrong, I’m going to include what I call a ‘”cheat sheet” at the end for all of you to devour if simply want to take it and run.  More importantly though, it’s all about how you should be thinking so you can come out with your own local sources on the fly.  It will spark ideas in your head that you’d never even considered.  I have a unique mind (ask my wife) and I tend to come up with very unconventional methods to accomplish conventional goals.  I share this thinking with you in the eBook.

Enough with the shameless self promotion and whetting your appetite.  I wonder if this whole lack of supply idea really increases demand.  Eh, we’ll see. Just so that you haven’t read this entire post so far without some good information to go on I’ve decided to share a piece of of the eBook with you today.  It’s a section from the beginning basically introducing the topic of sourcing and why it’s important.  I hope you enjoy it.

Sourcing Introduction

Sourcing.  It sounds like such a professional word, doesn’t it?  To me, sourcing goes hand in hand with other business terms like strategy, innovation, logistics and procurement.  However, when you break it down, it’s actually a very easy concept to understand.  At its most basic level, sourcing is simply a process by where you find things.  Forget selling for moment.  The word sourcing simply means where you find people, products, supplies, etc.  It’s a very basic concept and one that I truly want you to understand.

We can take it a step further and explain the term in a more useful manner to define it as “where to find products to sell not even specifically related to our niche of book selling”.  The number of different businesses is about how many types of sourcing you’ll find in the business world.  Manufacturers need to source raw materials to create products.   Distributors need to source manufacturers to find products to sell to large wholesalers.  Wholesalers need to find distributors to get access to products.  Finally, retailers need to find wholesalers to sell products to people like you and me.  It’s a huge chain in which the original raw materials come out of the earth, get morphed into a product, get exchanged hands a few times with an ever-increasing price and finally make it to you and me in the form of our new iPhone, kitchen cleaner or car part.  I’m sure sourcing isn’t a foreign concept to you; after all, you bought this book.  If you didn’t have an idea on what sourcing meant, I doubt you would have given the title a second look.  Let’s take a deeper look into book sourcing now to give you a sense of its importance.

The Importance of Sourcing

As an online bookseller or a merchant in general, if you don’t have a product to sell, what do you have?  I doubt that customers are going to throw money at you because of your good looks.  You have to provide some kind of value for them and for us booksellers, that value is quality books at a competitive cost.  To be a successful online bookseller there are essentially 4 different processes you need to master: sourcing, listing, order fulfillment and customer service.  Each is necessary to the health of your business, but without sourcing, you have nothing to list and the cycle continues on down the line.

If you ever run into a situation where you have limited time to perform more duties that can possibly get done, you’ll need to prioritize.  To give you an idea of the importance of sourcing, picture the following scenario.  Realize that this doesn’t happen every day, but this is a real world example that I personally have had to overcome.  It is critical to know how to prioritize.

<insert eBook content spoiling personal example here>

I don’t want to tell you that this happens everyday because it does not, so don’t get scared about the potential pressure.  I only tell you this story from experience and what you must do to seize an opportunity to grow your business.  It is critical that you understand that sourcing is the #1 most important arrow in your quiver for more sales.

Now that I hope I’ve given you a sense of the importance of sourcing, I would like for you to get a good understanding of how we use sourcing.  To do this, it’s a great idea to paint a picture of where a book comes from and how it ends up in the hands of your lucky Amazon customer.  <insert one of my only sources I get my inventory from here> Unless I’m buying direct from the publisher or from a large retailer like Borders, Barnes and Noble or Amazon where the book is still “fresh”, I’m probably only seeing a small piece of a book’s life…

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Fulfillment by Amazon is one of the most popular services for the small-time bookseller.  It seems that it has gotten so much attention both from Amazon’s marketing team as well as from guys like Chris Green at FBAblog, Nathan Holmquist at SellFBA.com and countless other people.  I’m included in this list ever since I started writing about my first experiences with FBA way back in October of 2009. My first FBA post got over 36 comments which is huge for this blog.

I’ve raved about the service many times but I’ve never actually written an informative post about the downsides to FBA.  You can’t have your cake and eat it too, right?  In my opinion, there is little information out there about the downsides to using FBA.  For the novice to the service it’s wise to always take the good with the bad before jumping in.  To start off with, I found a blog a few months ago that is solely dedicated on telling you how much FBA sucks.  Coincidentally it’s called Problems with FBA.  It’s not updated that often but there are a few posts that make valid points against Amazon’s service.

Here is a list of my reasons why you may not want to use Amazon’s FBA service.  Take them as you will and weigh how important these issues will be to your business.  Choose accordingly.

1. Higher fees than listing yourself

FBA includes 3 additional fees than if you were fulfilling orders yourself.  These are called the Pick & Pack, Weight Handling and Storage fees.  When selling an item via FBA be prepared to tack on an additional flat fee of 50 cents plus 40 cents/lb and 45 cents/month per cubic feet of space your stuff takes up.  For comparison let’s say you sell a 1 pound book for a dollar.  If you were to fulfill this yourself your Amazon fees would be ($1 * .15) + $1.35 which would leave you with $-1.20.  Add on the $3.99 standard shipping credit they’ll give you and you’ve got $2.79.  You’ve also got postage (~$2.38) plus shipping supplies (~$0.25) costs and you’ve made 16 cents.  However, let’s say this book was FBA and it’s been in their warehouse for 6 months.  If this book sells via FBA you’ve got your $1 sale price – Commission ($1 * .15) – VCF ($1.35) – Weight handling ($0.40) -  Pick/Pack ($0.50) – Storage (~$0.10) which ends up giving you a net LOSS at a buck ten cents.  Now there is the typical add $3.99 to that which makes up for this lost but this is just an example.

2. Considerably less control

I have no problem with this because once the books are off I could care less as long as they sell.  However some book sellers want ultimate control over their inventory.  Be prepared to relinquish all control to Amazon once they’re out of your hands.  Amazon has full reign to give refunds to customers as they please and deal with customers how they please.  You’re feedback is also subject to Amazon’s performance.  They’re pretty good about sending out your orders in a timely fashion and if you do get a feedback that’s Amazon fault they’re supposed to remove it.  However, you are still relinquishing control of your feedback to Amazon.

3. Risk of paying money for books that DON’T sell

The storage fees for your inventory is minimal but it’s still there.  If you’re selling books out of your home then you have no risk of listing 10,000 books if they don’t sell.  On the contrary if you’ve got 10,000 books in Amazon’s warehouse a monthly storage fee of $300-$40 wouldn’t be out of the question.  Only send high demand books to Amazon to prevent them sticking around too long.

4. $3,438 for changing your mind against FBA

I currently have 5,730 books with the FBA service right now.  Let’s say I had a situation to where I wanted to close down my business for good and stop paying the monthly storage fee for all my books.  Since I have so many books in their warehouses it’s gonna cost me over $3,000 for them to ship them all back to me.  This is because Amazon charges you the same cost that it would cost them to pick and pack the book to a customer of another sales channel like eBay.  This is called the multi-channel fulfillment rate.  Currently, it’s 60 cents per item.  As of this writing, Amazon is still waiving the Lose Weight Exercise-handling fee.  However, due to the increase in usage of the FBA program Amazon has been known to significantly decrease the price of removal to clear up space.  I’ve gotten at least 3 emails so far from them notifying of a decreased price of removal if I decide to do so.

Keep the removal cost in mind once you start sending thousands of books their way because it’s not  free ride back.

5. Waiting to see your current inventory

This is one I just came up with while writing this post. I was trying to get my current inventory numbers and was victim to the message “Your data is more than 24 hours old, please wait a minute and refresh again”.  Typically, it takes longer than a minute but not too much longer. It’s a very minor annoyance to me because it always does show back up but if you’re in a hurry then be prepared to wait a few minutes to see your FBA inventory.

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UPDATE 11/12/10 – With any new business adventure comes a learning curve.  Since writing this post I have found out that Amazon will not ship to APO/AE addresses nor will it ship to Puerto Rico for multi-channel fulfillment orders.  Unfortunately, I have no way to prevent these orders through my other channels.  To fulfill these orders, I’m having to notify the customer that the shipment will be delayed up to a week and to ask if this is OK.  If they agree I issue a removal request from FBA and get the book sent back to me.  I then send it out myself.  It’s a pain but it’s the only way possible, unfortunately.  I’ve updated each listing to mention if the address is an APO/AE or Puerto Rico address to contact me ahead of time prior to purchasing to confirm because some inventory may be delayed up to a week.

Like any good business owner I’m constantly looking for different methods to make more money and reduce expenses.  I had been using Fulfillment by Amazon for a little over a year now and the program has been a game changer for my book business.  However, since it’s popularity has exploded lately and more mega-sellers have been using the service to bring the price so low on books that they’re taking losses I’ve found books that I sent in only a few months ago still lingering around Amazon’s fulfillment centers chewing up storage fees.

Don’t try to compete with mega sellers!

I decided to change this and dove in this weekend to see which books were eating up unnecessary storage fees and found a single reason why; the price wasn’t low enough.  To prevent my repricer from breaking me financially by offering $2.00 FBA books, I have a price floor that puts a stop to my downward pricing at around $2.75 or so for very lightweight books.  However, I was consistently seeing my competitors pricing the exact same book in the same condition as low as $2.25 making me not even on the first page sometimes!  That’s just insanity!  To just break even on those books the thing would have to weigh 2 ounces!  That’s not even including any storage fees and the cost to ship it to Amazon in the first place.  Needless to say, my price floor was staying even if I wasn’t selling my copy right away.  I’m not in the business just to give money to Amazon.

Now that I had the reason why these books were stagnating in the warehouse I then did some brainstorming as to how I could get these books moving and either make a profit or at least just break even.  Don’t forget you’re going to get charged if you have Amazon either dispose or ship them back to you.  According to Amazon’s FBA pricing page "Inventory Removals and Disposals will be billed at the Multi-Channel Fulfillment rate for Pick and Pack.”  Right now that is 60 cents!  Looking for a cheap way to just purge your FBA books?  Just jack the price so low that you loseWeight Exercise LESS than 60 cents!

If you can’t beat ‘em sell your book somewhere else!

I’d rather not loseWeight Exercise ANY money on these books so there’s got to be a better way.  First, there is no possible way I’m going to sell these books on Amazon any time soon and having Amazon pull them to ship them back to me would cost me 60 cents/book anyway.  The prices have simply gotten way too low for me to be competitive anymore.  The sales ranks are also not the best so I’m not seeing the price ever come up rather continue the spiral down.  Amazon, as a sales channel, is out but what about the option for multi-channel fulfillment?  I had briefly looked at it but never really spent time studying this option.  I would immediately see the increased fees that were charged to send the book off Amazon and forget the idea.  HUGE mistake as you’ll see below.  I had put off truly spending some time looking into this option long enough.  Let’s run the numbers to see how this all comes out in the end as profit.

Being an insanely analytical numbers guy at times I went to my best friend, Excel.  The problem is when I get started with Excel thinking I’m going to just do a few quick calculations it ends up being many, many hours.  These hours are typically filled with adding new calculations, weighing options against other options and generally way overdoing it but sometimes this tendency comes in handy.  This weekend’s brainstorming session went so well I had to share it with you.  I ended up researching nearly every fulfillment fee known to man that Amazon, Alibris, eBay, Abebooks and Half charge when a book sells for both local fulfillment and by utilizing FBA to fulfill orders placed on all these sites.

At the end of the day, the only thing that matters is net profit.

Here’s a screen capture of some of the Excel spreadsheet.  I just wanted to be able to play around with different Lose Weight Exercises and sale prices to compare pure profit after the fees have settled.  After about 10 hours of tweaking this is what I came up with.

I did have some constraint because I didn’t go as far as to incorporate international shipping options, all of the partner sites on Alibris, etc.  I did make some notes though so maybe one of these days!  I’m crossing my fingers that the data that I do have is accurate.  If you see any different please let me know.

In any case, the whole point of this little project was to see how multi-channel fulfillment by FBA was going to look after all expenses have been paid.  My eyes lit up and it took me a good 30 minutes of not believing the numbers until I decided I’d been a fool not to offer my FBA books on all the other channels I sell on.  Take a glance at the Amazon FBA rows and the big red Xs by the Total Profit.  These Xs mean the lowest 5% of each channel!  You will actually make MUCH LESS if a FBA book sells on Amazon for one simple reason; the shipping credit.  This is how you can sell FBA books and still get that shipping credit!  Priceless!  Just sell your FBA books on eBay, for example, pocket the shipping credit and have Amazon do all the dirty work.  Brilliant!

At the end of the day you’ll see that you can make up to 10x MORE profit from a FBA book by selling it on another site rather than Amazon itself.

Let’s break it down.

Here’s a typical scenario.  In this scenario, I’ve sent a mass market paperback to Amazon FBA that weighs 5 oz.  A customer purchases this book and chooses standard shipping.  Here’s how it would go down on Amazon, eBay and Half.

Amazon

Initial Sale Price = $3

- Amazon Commission = $3 x 15% = -45 cents

- Amazon Variable Closing Fee = -$1.35

- Amazon Pick/Pack Fee for orders under $25 = -60 cents

- Amazon Weight Fee (40 cents/lb) = -13 cents

- Initial inbound shipment cost to Amazon estimated at 32 cents/lb = -15 cents

Total Profit = $0.32

eBay

Initial Sale Price = $3

- eBay final value fee = $3 x 15% = -45 cents

- eBay insertion Fee (Pro Store) = -5 cents

- Paypal commission = (2.9% of sale price+shipping) + 30 cents = -50 cents

- Amazon Pick/Pack Fee for orders under $25 = -60 cents

- Amazon multi-channel standard shipping fulfillment fee = -$1.90

- Amazon Lose Weight Exercise fee (1-15 lbs, 45 cents/lb) = -23 cents

- Initial inbound shipment cost to Amazon estimated at 32 cents/lb = -15 cents

- eBay shipping credit (seller specific) = +$3.99

Total Profit = $3.11

Half.com

Initial Sale Price = $3

- Half.com commission = $3 x 15% = –45 cents

- Amazon Pick/Pack Fee for orders under $25 = –60 cents

- Amazon multi-channel standard shipping fulfillment fee = -$1.90

- Amazon Lose Weight Exercise fee (1-15 lbs, 45 cents/lb) = -23 cents

- Half.com shipping credit = +$2.64

Total Profit = $2.46

Have you digested this yet?  I literally couldn’t believe the profit numbers when I got done but I’ve triple checked everything and kept coming up with the same numbers.  Am I missing something here?  Please burst my bubble if you see any discrepancies.

The overall purpose of this post was not just to woo you with my super Excel skills nor to even make this just about running the numbers for multi-channel fulfillment by Amazon.  It was to have you take a step back and notice what kind of extremely obvious opportunities that may be in front of you if you’d just look!  I had put off doing this for months simply because life got in the way and I always thought I was too busy.  It wasn’t until I started metaphorically bleeding that I specifically set aside family time, this blog and receiving inventory to do this the right way. 

If you see potential in anything at all take it now!  At least allow yourself to look more into it instead of just passing it off.  It’s worth it to investigate any ideas you have to make your online bookselling business a much bigger success than what it is now.  The key to continued success in this ever-increasing competition business of online bookselling is to continually be thinking up new ways to offer quality books to customers by exploring all your options.

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