I haven’t sent in a FBA shipment in some time due to other priorities.  However, I recently received the latest FBA newsletter and found out that Amazon is now offering to label items for you.  That’s pretty sweet!  That has been a desire of mine for a long time.  The biggest hassle with FBA has always been printing out all those damn labels and sticking them to each and every book.  It turns a 1 hour job into a 3 hour job.  I’ve sent in some shipments that literally took me 8+ hours to process when they could have been much, much less.

It looks like they’re charging 20 cents/item which doesn’t seem to be too bad.  I typically had 200 books in a shipment.  If I were to choose to have Amazon label them all for me, I’d be out $40.  In my opinion, that would be a small price to pay to shave half the time out of processing.  This definitely wouldn’t be for the penny books though.  With the recent fee hike, that really hurt much of the low-price, commodity books being sold via FBA.  Taking another 20 cents from the already paper-thin margins wouldn’t be feasible.

Here’s the breakdown of the service:

• They will label just about anything that qualifies for FBA however it has to have a scannable barcode.  This means NO pre-1970 books folks.  If you do have these items, you’ll have to label them yourself however they’ll have to be in a different shipment.  There’s no mixing and matching labeling service items with self-service labeling.
• You’ll be allowed to use the labeling service on a per-shipment basis.

It looks to be a pretty straightforward process.  You tell them which items you want them to label and you pay 20 cents/pop.  Are you going to use this service?  If so, I hope you’ve figured this new expense into your total expenses.  This would be a PERFECT reason to use a service like eBizControl to keep track of all these little expenses.   Feel free to sign up for the mailing list or check out the site and get registered for the beta once it’s available.

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.

• Do not  accept ALL books

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.

- Adam

If you don’t know who Ted Bundy is, he was an infamous serial killer that killed 30 women in the 1970s.  Could technology; more accurately,ebooks, kill off printed books like Ted Bundy?  Frankly, it’s beginning to concern me.  Not so much that it’s going to completely kill off printed books but that overall sales of books (both new and used) have already started to spiral down.  I know that niches like rare and collectible books will be only slightly affected due to their nature but commodity books like I sell will soon go to the way of the dinosaur.  Even I, a used bookseller, has an iPad sitting right beside me with the Amazon Kindle app on it.  Why?  Because it’s so damn convenient!  I know, I know, you’re going to call me a sell out but I’m sorry!  I just love technology too much!

This is a topic I’ve been stewing on for a long time.  Being a big technology guy way before I was a book guy, I was well aware of eBooks but didn’t think about the impact they had on my book business.  To be honest, I’m doing just fine while Amazon can claim they sell more eBook than hardcover books all they want.  Perhaps I’m just too small of a seller to notice the global trends right away.  Perhaps.  Perhaps the books I’m selling attract the kind of people that still like good ol’ paper.  Who knows?  In any case, I still believe selling used books still is a good way to make a business.

Even though Amazon is and always has been the biggest source of sales for me, they seem to be attempting to leave me.  Amazon has recently announced it’s plans to start a digital library.  Publishers, as well as sellers like me hate the idea for obvious reasons.  It is surely going to affect sales in a very negative way.  Amazon got it’s roots with books and it has always been known as a very technologically advanced company automating many processes and streamlining workflows.  Instead of fulfilling book orders from people like you and me, I’m pretty sure they’d rather just be throwing up a server and opening the gates for people to download at will.  No labor costs, much less equipment and less time equal much more profit at the end of the year.  The must be doing something right and planning for something big if they’re able to report sales of a whopping $9.86 billion for the quarter but profited way less.  Costs in developing the Kindle or this so-called digital library, perhaps?  Amazon…I understand why you’re doing it but I don’t like it one bit.

Also, don’t even get me started on Google’s eBook adventures.  They recently opened up an entire eBook store while at the same time attempted to scan hundreds of thousands of books called the Google Books Library Project.  OK, it’s Google.  I get get that.  They’re a technology company to begin with.  I understand why they’d want to get people reading eBooks instead of print books.  Do you think they might have their ear to the ground and hear what’s coming before we do and try to get in a position to take advantage of that?

I’m also pretty sure you heard about Borders going bankrupt.  However, did you know that you can still browse to Borders.com?  Borders couldn’t hack it in the print world but decided to go all in with eBooks and online-only distribution.  Why pay a few thousand employees when you can have a datacenter somewhere with a few hundred servers and a dozen IT geeks to run it?

I’m at a loss here.  Personally, I’m torn between being a huge fan of anything tech to seeing my book business sales potentially dwindling.  You can’t resell eBooks, right?  For all you other booksellers out there, I’d love to hear what you think in the comments section.  Concerned?  Have a strategic plan to counteract eBooks or do you just not think this is going to be something that can hold up?

This post has been a quick writeup and may have some errors and/or not flow as gracefully as some of my past posts.  I’ve been drastically slowing down my post-writing mostly because they take way too damn long to write and edit for clarity.  I’ve decided rather than give you guys nothing I’ll at least write about what’s on my mind and get flamed for the errors so please, be gentle.

Adam

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That was the response I got from my mother when I told her that the hundreds of books that we had got from a new source ended up being review copies that were unsellable on Amazon.

To give a brief history,  we recently acquired a new source of books that we had never gotten from before. This was a new source so we didn’t really know what to expect.  When we got to the place, we picked up a massive amount of books which looked promising. They looked new–brand new–which was rare for what we usually get. In short, we were pretty excited about it.

We went back and started going through them, and it turns out that there tons of different copies of the books that were looked brand new!  This was rare for us because typically, the books that we buy in bulk are older books, rare (not the super-valuable kind), ex-library books that we typically get for close to nothing.  At first we were a little skeptical, but after looking them up and scanning them with the barcode scanner with the receiving script I created, we found out  that they were actually very valuable and had a low sales rank.  W00t!

However, this is when the point of the title comes into play.  Not long after we got all excited we started seeing signs of review copies.  Page counts were wrong on some books, some had paper inserts on how to order more copies and a few had notes etched in them to change certain pieces.  There were tell-tale signs of review copies.

If you’re not familiar with a review copy, a review copy is typically a draft of a book that the author makes and sends to the publisher. The publisher prints out a few copies, sends it back to the author, then the author approves  the changes. The author signs off on it and sends it back to the publisher, and the publisher prints the final copy.

Needless to say, selling review copies of books on Amazon is strictly prohibited.  After some further investigation by matching up Amazon’s detail page and searching WorldCat for another authoritative source, we found the huge majority were, in fact, review copies.

There are a few things that you can take away from this experience that I had.

1. Know Amazon’s rules; know what they expect and disallow. Amazon does not allow any review copies to be sold on their site. They explicitly say this in their Terms of Service. If found to be selling review copies, you may have your seller account discontinued.
2. Learn how to distinguish a review copy from a final copy.  Review copies may have notes in them for the author saying “to add this, remove this, change this,etc” with notes on the margins.  Also, they may not have barcode on the back where the ISBN usually is.
3. Look for inserts  from the publisher that may not look like they’re part of the book. Inserts can be anything, such as where to order more copies of the book, who to contact when submitting revisions, etc.  In this instance, I had purchased tons of educational books for students.  These books, although were clearly student textbooks, had an insert in it to order copies of other related textbooks.  This seemed a little off to me that this material would be for the student. These materials were clearly meant for the authors themselves
4. Finally, if you’re not sure, always check the publisher’s website to verify details (if possible) or WorldCat.  Sometimes, the product detail page you’re looking at may not have the correct details.  This can be for different reasons but the first that pops into my head is the page may have been created from another seller and not Amazon.  Because of this possibility, always consult an authoritative source if you’re unsure.

I apologize for the posting time out I’ve had lately.  I’ve been working hard on my newest web application eBizControl and another inventory receiving application for bulk buyers that’s taking up a considerable amount of my time.  However, I hope that the time invested will pay off in the end.  In any case, I’m going to make an attempt to get back to posting on a regular schedule.  Let me know if you want to hear about anything in particular.

Amazon’s FBA service has become hugely popular as of late and rightfully so.  You can’t beat someone else shipping orders for you, accepting returns and dealing with irate customers!  It’s a great service that many have chosen to take advantage of.  However, there are some sellers that either haven’t started yet or are still a little unsure on exactly how it works and exactly what to send to Amazon for fulfillment.  Why are sellers unsure of what to send?  The fees!  Amazon has become known as the place to sell used items.  One of the reasons why is due to the free listing.  Unlike eBay who charges your every time an item gets listed, Amazon only charges you if your item sells.  This means there is absolutely no risk to you if nothing sells.  However, with the introduction of FBA, Amazon also brought forth the inventory fees and rightfully so.  Your stuff takes up warehouse space and incurs labor costs to manage it.  This is why Amazon introduced the monthly storage fee and more recently, the long-term storage fee.  These fees are incurred the moment your book gets listed regardless if it sells or not.  Oh no!

The monthly storage fee is a fee that’s charged on a monthly basis based on the size of your item. To be more specific, it is based on the size in cubic feet and currently it is 45 cents per cubic foot. This fee begins to incur the moment your item is scanned in at Amazon and the total cubic feet of all your inventory is tallied up every day and then tacked on to your total monthly charge. Refer to the link above for more information.  The recent long-term storage fee was introduced because presumably too many sellers were leaving their stale inventory in Amazon’s warehouses and the FBA program was unexpectedly much more popular than what Amazon had intended.  This fee is a whopping $45 per cubic foot!  This fee doesn’t start to incur until your item has been at Amazon for longer than a year and you have multiple copies.  Due to these inventory fees, sellers have become a little more choosy about what they decide to list for sale via FBA.

With the thought of potentially shelling out hard-earned cash without selling anything in return, how do you decide what to send to Amazon to try your hand?  Here are the 2 criteria you need to look out for.

1. High Demand

If you’re in a position where you are charged a fee based on time to sell you better send items that sell and sell quick!  The less time they spend in the warehouse the less money you have to pay.  How do we do this?  I’m glad you asked!  The answer is the Amazon sales rank or “bestsellers rank” as they’re calling it now.  Without going into the technicalities of this, this number is simply a measurement of how well a particular book is selling relative to all other books on Amazon.

The sales rank is a great way to guesstimate how fast your item will sell.  Personally, I choose a sales rank of 1,000,000 or under to send to FBA.  Others have told me they use 500,000 that aren’t quite as daring but I like to live on the edge.  By taking the sales rank this high you will get some books that never sell and decide to sit in the warehouse forever.  These have to be returned to you or destroyed if you don’t want them incurring the dreaded long-term storage fee.

2. Low Lose Weight Exercise/price ratio

This is an important piece to take into consideration also.  Some people will tell you to only send lightweight books like mass market paperbacks and be done with it.  I choose to explore all opportunities for profit and actually dive into the numbers to see the potential of sending 1,2 even 4 pound books to Amazon.  The Lose Weight Exercise is irrelevant if the price that you can get is high enough.  To figure out this ratio, here’s a quick calculation that you can do. Disclaimer: All prices shown will be for media items.  If you want more pricing information you can visit Amazon’s FBA pricing page. Let’s say you’ve got a book with a sales rank of 50,000 that weighs 3lbs.  This is a pretty good sales rank and I’d estimate it would sell within 1 week barring any unforeseen circumstances.  My strategy is to list this book and match the lowest FBA offer which, at the time, is $10.00.  I say, at the time, because by the time that item gets to Amazon and listed it may be $9.75 depending on how volatile the pricing is.  Just remember the price 9/10 times will always go down.  Remember to take that into consideration.

We’ve now got a few pieces of key information.  We’ve got our expected sale price ($9.75), our expected time to sell the item (1 week), our current sales rank (50,000) and our Lose Weight Exercise (3lbs).  We’re now ready to calculate our potential fees.  Let’s list them out.

Expected storage fee: $0.45 / 4 = $0.12 for 1 week’s worth of time

Pick/Pack Fee: $0.60 flat fee

Weight Handling: $0.40 x 3 = $1.20 for our 3lb book

Commission: $9.75 x .15 = $1.46 flat commission

Variable Closing Fee: $1.35 flat fee

Our fees end up adding up to $4.73 giving us a profit of $5.02.  To get a feel for the profit if you decided to list it yourself you could run similar numbers.  Amazon has an excellent FBA price calculator that allows you to run various scenarios with ease.

I hope this has helped you in deciding what to send to FBA.  This was one of my questions whenever I first started with FBA back in March of 2009 and through the years I’ve learned the hard way what not to send.

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