I’ll be honest. I’m SUPER excited and wanted to share and possibly inspire others on what this business can really do. If you can’t tell already by my past posts I hold nothing back. I’m as completely transparent as a sparkling clean sheet of glass. I hide nothing including my financials. I do this for a few reasons but mainly because to give people real-world examples of what selling used books on the Internet can do and to prove that you can do it too.

I get countless emails from people that found this blog through Google, Youtube, Facebook or whatever other medium I have content on.  In some of these emails, I love to hear people just starting out get psyched about some of the things I talk about including how much money I make.  I do the same thing for business ideas I’m interested in as well.  People seem to think it’s awesome to hear how a regular guy, starting with no money to build the business actually made something of it.  For those people, this is my most exciting post yet!

This month I made over $11,000 just by selling books on Amazon, eBay, Half, Alibris and Abebooks.   This is my highest grossing month on record and means I’ve met a goal I’ve been shooting for for a very long time!  How did I do this?  I’m no mega seller.  Hell, I’m not even doing this full-time but what I can tell you is that I worked my ass off nearly every day outside of my full-time job to build it to this point.  I also finally was able to get some quality helpers to help me achieve this.  If you’d know me personally I don’t like to brag on my achievements but there some times when you’re so proud of what you have accomplished it’s hard not to keep it in.

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Amazon Competition

Repricing. No other term both strikes fear and anger in the minds of old-school book-sellers and, at the same time, excites the modern, tech-savvy book selling entrepreneur.  It is a term that has received more bad publicity than any other term in book selling (“penny book” vies for the top spot with “repricing”).  Once introduced, however, repricing has revolutionized the online book selling world and has allowed sellers to partake in a “set it and forget it” price mentality.  Amidst the dozens, hundreds or thousands of competing offers on Amazon, repricing allows a seller to maintain a fixed position throughout the item’s time for sale.  In this post I will be referencing repricing as used on Amazon’s marketplace, but repricing can and is used on other sites as well.

What is repricing?

Repricing is a popular term used by online sellers to set the price they’d like to sell their copy of a book at.  It’s most notably used on Amazon to describe the practice of using a set of rules in order to keep the copy of their book at a fixed position among all of the other offers for that same book.  A fixed position meaning a pricing position such as a penny lower than the lowest offer, an average of the lowest 3 offers or it can even get as granular as the average price of the lowest 10 offers in like new condition over $5.  The options are limited only to the software or service that you use to perform the repricing.

Repricers: How do these programs gather the prices?

Everyone that has ever bought or sold a book on Amazon’s marketplace knows that if you search for a book and click on the used section you will find anywhere from 0 to thousands of different sellers trying to peddle their wares and sell you their copy of that book.  Prices for these offers typically have huge ranges with the lowest going from one cent to the highest at hundreds of dollars or more.  The reason these prices vary so much is the topic of another discussion but for now just think about this huge number of sellers offering a book at such a huge number of different prices.

Amazon has what’s referred to as their marketplace application programming interface (API).  A simple TV analogy can be used to describe this API.  When you want to flip on the boob tube and watch Lost you pick up the remote (Amazon.com) and push the power button to turn on the TV (click in the search box on Amazon.com).  This action then sends a signal to the TV’s sensor which then tells the electronic circuitry to initiate power-on and “Whoila!” you’re TV is on.  Think of the API as the sensor in the TV.  It’s the guts of the TV that no ordinary Joe understands but if you get a TV mechanic around he could whip out a Phillips screwdriver and turn your TV on by just jiggling the sensor.  He knows how to manipulate the guts of the TV instead of using an external device to do the same thing.

The API is just like this.  A buyer may browse to amazon.com in their web browser of choice and look at the prices of a book but a web developer can go in behind the scenes of the website and gather all the prices just from a simple command.  They’re both seeing the same information but when the prices are received via the API, this gives the developer a way to manipulate those prices and present them in a different way to the user of their program.  You just want to see the lowest 3 used offers with condition of Acceptable?  Sure!  How about just seeing prices over $5?  No problem!  All repricing programs use this API to download prices for each book and set rules depending on how the user wants to set them.

Repricers: Why do sellers depend on them?

Now that we know how repricing programs gather the prices, let’s talk about why any seller in their right mind would want this sort of capability.

A used book’s prices on Amazon are sorted in order of lowest price + shipping to highest price + shipping.  Each book will typically have multiple pages of offers.  When a potential buyer checks out the used offers, they will immediately see the first page of prices which are, by default, the lowest prices that a book is being sold at. However, if they scroll down to the bottom of the page they will also always have the option of clicking on other pages of offers.

If you were a buyer, excluding everything else which seller are you most likely to buy this book from?  A seller on the very front page as soon as you click on the used offers which is accessible by one click or by scrolling down to the bottom of the page, clicking on page 56, scrolling to the middle and buying that copy.  It’s a pretty easy answer.

If you list a book that is still in demand on Amazon today and notice that the lowest used offers are $5, $6.50 and $7 and you decide you want to sell your copy at $6 which would get you in the second position on the very 1st page; a very lucrative and high visible position!  However, this book doesn’t have a very good sales rank and is a slow seller.  Other sellers notice that this book has been sitting in their inventory for months now and reduce the price to meet buyer demand.  Other sellers follow suit and before you know it the lowest 3 offers aren’t $5, $6.50 and $7 anymore.  They are now 25 cents, 56 cents and a dollar.  Since yours is still listed at $6, you’re no longer competitive!  You’re on the 54th page of listings and a buyer would need to conquer Mount Everest to buy your book.  What makes you so special that they would want to do that?  Take at look at this book; Don’t Make Me Think by Steve Krug.  It’s a perfect example of this phenomenon.

Instead of listing your book for $6 and ending up on page 56 after 2 weeks, a repricing program connected to your book could see that you’ve just listed that book at $6 and ALSO notice the prices of your competitors.  It will take a look at all of this on a periodic basis and as your competitors lower their price your book just follows along making your book still appear on the 1st page right in front of the buyer’s eyes.  Don’t want your book to follow ALL the way down to a penny?  No problem!  Just set your minimum to $4 and you’re repricer will gladly accept your command and keep looking at your competition chomping at the bit to follow them but since you’ve told it “NO!” at $4, it will behave.

Repricers are crucial to any seller that has more than a few hundred books that wants to remain competitive in the highly competitive world of low sales rank books on Amazon.  If you’re a new seller with a few dozen books, take time out of every week to periodically check your competitors prices and adjust manually.  However, get to the point where you’ve got 10,000 books online and you’d die of old age before you could look at them all.  Repricing automates this process.

Repricing: How do I configure this?

This all depends on the service that you’re using to reprice your books.  Programs that provide this service include RepriceIT, Aman Pro, FillZ, Art of Books, Monsoon, Alibris et al.  However, they all have access to the same information through the Amazon marketplace API so technically they all have the same capability.  Refer to your program’s individual instructions on how to get your repricing program configured.  If you need a particular rule setup and they don’t offer it, let them know as it *can* be done but it all depends on the individual company offering the program if they *will* do it.

Repricing: What are some examples of popular rules?

Repricing rules or conditions can be set a number of different ways depending on the seller’s goals but there are a few rules that are common among sellers.

1. Put my price at a penny below the lowest competing offer ALWAYS.

No other rule pisses other sellers off more than this rule including myself and, believe it or not, I was once one of them.  New sellers new to Amazon or sellers that simply don’t care about the market as a whole can sometimes set their repricer to undercut the competition by a penny or more with no regard.  This gets them the best placement on the page in front of the buyer but what if you have two or more of these jokers trying to sell the same copy using the same rule?  Price war!  Seller 1′s response at being undercut by a penny: “Oh, you undercut ME?  I’ll show you!  I’ll undercut YOU!  Take that!”  Seller 2′s response: “How dare you undercut me!  I want that top position!  I’ll do you one better and mark my price down ANOTHER penny!”.  Rinse, wash and repeat and before you know it the lowest price hits rock bottom, future buyers rejoice and all the sensible sellers that chose not to undercut other sellers go down with them because they still need to follow to remain competive on the 1st page albeit NOT the lowest offer.

2. MATCH the lowest offer.

To remain in a competitive position some sellers choose the have their repricers simply match the lowest offer to be ONE of the few not the ONLY one with the lowest offer for a book.  This not only keeps them competitive because they’re still very visible and at the same time does not begin a price war with a “run to the bottom”.

3. Set my price at the average of the lowest X offers.

Sellers not looking to turn around their inventory as quick as possible will sometimes make a compromise and choose to set their price at the average of the lowest X offers with the lower number of offers being a lower price and vice versa.  This allows them to still remain relatively competive and depending on the total offers can allow them to still remain on the first page of results but also command a higher price for their copy.

Notice a trend?  Lowest.  In my experience and according to a study performed by Monsoon, 70% of buyers are interested in price first, condition second and feedback third.  They’re always looking for the cheap copy and if you want your copy of your book to be there for the buyer, you have to ablige and offer a low price to meet that demand (note: not the only LOWEST, but just LOW).

Repricing: The Final Verdict

Any successful seller needs to do 3 things to make money in this business.

1. Meet buyer demand
2. Get in front of the buyer
3. Offer what the buyer is wanting

Out of those 3 points, repricing takes care of 2/3 of them.  Repricing programs are able to allow the seller to meet buyer demand by keeping pace with the competition and remain right in front of the buyer AT ALL TIMES with no intervention by the seller.  My business would not survive without repricing technology.  It is a tool that can be used for good or for bad but in the hands of the right seller, it can be a very powerful, profit-generating tool.

If you’d like to learn more about repricing or many other methods for being successful at selling books online, take a look at my updated eBook titled Used Books: Big Business – The Secrets to Selling Books Online for Big Profits.  I discuss, in depth, repricing along with dozens of other techniques for operating a successful home-based online book selling business.

Please feel free to comment on this post or if you have questions about repricing in general head on over to the forum and post a question for us all to talk about!

The Story

This week, I’m going to change the style up a little bit to teach an important lesson.  I’m tired of the dry how to do this, how to do that, don’t do this instructional posts on how in succeed in your online book-selling business.  Let’s immerse ourselves in the life of an ordinary American consumer for a few minutes and see how the decisions that are made in this fictious story can be a strong lesson for building a successful book-selling business or any successful business for that matter.

Meet Alice.  Alice represents your run-of-the-mill, ordinary working a 9-5 job Monday through Friday kind of girl.  She’s an administrative assistant in a successful lawyer firm, single, 28, living in a one bedroom apartment and, for the most part, is happy with her life and her dog Sparky.  She’s content with her ordinary life, but always has a nagging feeling that she wants something more, something bigger, something sustaining that will allow her to have fulfillment in life, work hard (on her own terms), take modest vacations and to build a life that will sustain her until she decides to “retire”.

On her lunch hour, she’s always dreaming up new business ideas that may allow her the freedom to work her own hours, envision new products that will help others and ultimately build a highly successful business all on her own.  Alice is an aspiring entrepreneur and dreamer and hopes one day she can get the courage to fulfill her dreams of owning her own business and running the show.

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As I fight to keep my head above water running this blog, a used book business as well as a full time job as an IT consultant I barely have enough time to stop and spend time with my family so, for the first time, I’m asking you, my reader, to help me keep the regular posts going.

I’m asking any bookseller or soon-to-be bookseller to email me anything that you’d like to see written as a post on this blog.  Bookseller stories would be neat to share along with tips, tricks or whatever you’d like to share with the audience.  I’m approaching around 500 readers and growing every day so your message will be seen by many.  You don’t have to be credited for your post if you don’t want to.  I can leave you anonymous.

With that being said, please submit your stories or posts to my wall on my Facebook fan page at the Facebook SYBO Fan Page.  You ARE a fan aren’t you?  If  you’re still not into the Facebook thing you can still email me at adam at sellyourbooksonline.com but please try the Facebook wall first as it makes things much easier for me.

Are you thinking about branching out from Amazon, eBay or Abebooks and starting your own online bookstore business?  Perhaps tried sites like Chrislands already and found that you’re getting 10 sales a month compared to the 100 you usually get from Amazon?  There’s a reason; marketing and trust.

Taking a step back, I sell only on the big book sites like Amazon, eBay, Alibris, Abebooks and Half.com.  I’ve been doing this for almost 2 years now.  It’s been an exciting yet very time consuming , required a lot of hard work and has cost me thousands of dollars.  By piggy-backing on other websites that have already spent tons of money on marketing, a technical infrastructure to support themselves and countless employees, they’re not going to let you play for free in their playground.

As the end of the other month just rolled by I sat back recently to reflect on my sales and the expenses that were incurred.  Where did my sales come from?  Where did I spend all of my hard-earned money supporting the business?  It was a little shocking when I saw how much was going to Amazon in particular but all of the other sites also.

Full disclosure; during the month of July, my sales were around $8700.  Sounds great, right?  However…you knew there was a catch.  That’s GROSS numbers which doesn’t take into account marketplaces fees and other expenses.  Out of that number, Amazon alone took a staggering $3,300 for themselves not including all of the other sites albeit much less.  That’s an automatic 38% right of the top!  Who in their right mind would pay that kind of cash to sell some books?  *raises hand*  ME!

These fees may scare people off but I consider it cost of doing business and would never consider starting my own online bookstore business.  As I said before, these sites have spent countless dollars skyrocketing themselves to the top of the online bookselling heap.  Google “books” and see who comes up on the first page.  These are the sites that buyers will want to buy their books from.  The sites have the exposure and also the trust of the buyers.  I wouldn’t want to buy from joeschmoesbooks.com when I could just as easily get the book most likely much cheaper and faster from Amazon.

Am I the only one in this business that would never consider opening an online bookstore business site of my own?

- Adam

HOUSEKEEPING NOTES:  Development of the Amazon (and future marketplaces) sales and fee tracker app is really taking shape.  If you’re not familiar with this up and coming application it will be meant to provide automatic and accurate reporting of all complicated Amazon sales and fees.  When signing up, the user will simply input their Amazon (and other future marketplaces) seller information and you will then be presented with accurate and up to date reporting capabilities for bookkeeping and also for tax purposes.  If you’re interested, be sure to sign up for the mailing list on the form on the home page.