I finally found reports within my Amazon seller account (actually Amazon Seller Central) that I never knew existed (because they are hidden) which has proven to be immensely valuable to me. The reports contain information about all of my listings such how many times an Amazon customer has viewed the listing, how many times my listing was awarded the Amazon Buy Box among a lot of other useful stats. From what I can gather these reports are typically reserved for sellers on the Amazon Seller Central platform but we used booksellers can also use this information to our advantage!

To be completely honest I’m unsure of Amazon Seller Central vs. the marketplace. There was some buzz awhile back about sellers getting moved over to Amazon Seller Central from another platform but no one was really sure what was going on. From the Googling that I did I can’t seem to make heads or tails on if my seller account is actually on Amazon Seller Central or another Amazon platform. What’s the difference anyway? Are all sellers on Seller Central? Let me know your thoughts in the comments section.

I’ve recorded a short video on how I got to these reports along with a few ways I am using this information to tweak my listings and make strategic business decisions. To get to the point where the video begins log into your Amazon seller account and click on View all suggestions under the Amazon Selling Coach box as displayed below.

I have no idea why Amazon seller support denied these reports existence to me. They are really handy for telling how popular a particular book you have is and a slew of other information. Sound off in the comments section about this. Is this just an Amazon Seller Central thing? Do sellers other than Amazon Seller Central accounts have access to these reports?

Today is the Cyber Monday and that means the biggest online shopping day of the year.  Amazon which is the giant we all know and love is one of the biggest online retailers out there.  In this CNBC video shot inside an Amazon Fulfillment Center in Phoenix, AZ (the smallest fulfillment center at 600,000 sq ft) shows how Amazon is handling the huge rush in orders.

Kudos go to the Channel Advisor blog and their RSS feed for this.

Fulfillment by Amazon is a program that has exploded in growth over the past year.  It is amazing how this program began with such a rocky start but now is even being attributed to eBay’s recent poor performance just this August!  FBA, as a whole, has become very successful not only among booksellers but within lots of other niches.  It seems that the idea of outsourcing order fulfillment and taking advantage of incentives that Amazon is giving to FBA participants is proving to be a 1-2-3 punch to eBay and, at the same time, really giving Amazon sellers increased sales and much needed RnR while Amazon’s automation systems take care of all the grunt work.

FBA may be a great program but with any new business process there are always items to take into consideration.  In regards to FBA, the most important item to really spend your time fully understanding is the pricing difference in having Amazon fulfill your orders vs. doing it the old fashioned way and fulfilling orders yourself.  Truly understanding how to price your items when using FBA is critical to achieving the optimum price position on the product detail page, not leaving money on the table and finally how to weigh the increased fees vs. self fulfillment.  Each of these components comes down to setting the best price for an FBA item.  If you’ve done your homework and set the price according to your goals then you will be in the best position for that next customer to come along and snatch up your copy.

Crunch Some Numbers

Each of us probably has different sales goals in mind when listing a copy of a book online.  Some of us look for a quick sale but may sacrifice a little to lower the price while some of us would rather wait for the right customer to come along and choose to price their book low but not the lowest.  There are a myriad of factors that go into picking the right price but really it can all boil down to the individual seller’s goals and how much risk they’re willing to take.  FBA is no exception.  FBA sellers need to take advantage of all the incentives Amazon gives us while still remaining cognizant of the increased fulfillment fees.  Amazon’s not going to do the grunt work for nothing!

There are a few points you need to keep in mind when setting a price goal for your books when selling via FBA.

1. Fully understand all incentives FBA provides to you AND the customer.
2. Know each and every fee for every book you send to Amazon down to the penny.
3. Decide how much financial risk you’re willing to make.

Amazon FBA’s Pricing Incentives

First, I believe the most important part of truly taking advantage of FBA is to first understand every incentive Amazon gives the seller and the buyer as well as applying this knowledge to your pricing structure.  What are these incentives that Amazon provides anyway?  Stick with me..I’ll make it easy on you so you don’t have to go digging through Amazon’s help sections.

The most important incentive to you, as a seller, is how Amazon sorts the prices when someone clicks on either the New or the Used sections of a particular book.  Instead of writing a few paragraphs I decided to put up a quick video to explain the sorting incentive.  Check out this video about Amazon FBA price sorting.  In that video, I touch on the other incentives to buyers which are Amazon Prime customers to get free shipping and the items are also available for free Super Saver Shipping which means any order over $25 will get free shipping.  Pretty cool, right?

What do these incentives translate to?  They translate to more sales for YOU!  When customers can get free shipping it’s a huge plus to them and add the sorting incentive which exposes your books at the very top of the heap simply by keeping your price less than $3.99 more than the lowest competitor is awesome!

FBA Fees

The second point you need to be aware of when setting a pricing goal is the fees.  Yuck!  Unfortunately, you’re going to have more expenses with FBA but if you’re able to understand them and factor them into your bottom line you’re golden.  What are the fees associated with a FBA transaction for us booksellers?

1. The usual Amazon fees (15% commission and $1.35 variable closing fee)
2. Pick/Pack at 50 cents.
3. Weight handling at 40 cents/lb
4. Storage fees at 45 cents/cubic foot Jan through Sept and 60 cents/cubic foot Oct through Dec
5. Inbound shipment cost depending on how close you are to the fulfillment center anywhere from 15 cents/lb to 50 cents/lb.
6. Boxes and any packaging material for shipment to Amazon cost variable.

To get an accurate representation on your profit potential always calculate all the costs associated with FBA prior to sending books their way.  You may get burned if you don’t.  Take a look at this screenshot showing my laziness when not paying attention to Amazon FBA fees.  I’ve used spreadsheets in the past to calculate the total fees but Amazon recently released a pretty useful calculator of their own called the Fulfillment by Amazon Revenue Calculator which does the trick as well.

Are You a Gamblin’ Man?

I’m not a big risk taker.  I’d do terrible in the stock market which is why I hesitated at first to use FBA.  The reason is solely because of the storage fee.  If your book doesn’t sell and sits on their shelf you’re getting charged every month.  This is exactly the reason why I loved every bookselling site besides eBay is because of no listing fee!  However, once I sat down to crunch some numbers the storage fee that Amazon charges is extremely small.  To put that fee into perspective I just checked my latest storage fee for the month and it was $40.28.  At that time, I had around 3,200 books in their warehouse.  Do you think you could find a monthly lease for rental space for over 3,200 books for $40?  I doubt it.  Don’t let the storage fee scare you because it truly is a small price to pay for FBA.

Numbers Crunched. Time to Rock n’ Roll! Megasellers Beware!

After you’ve crunched the numbers and felt out your level of “risk” tolerance it’s time to finally set your FBA price.  In this section I’m going to tell you my method and an alternative method I’ve heard about.  There is no right or wrong pricing method here.  This is simply a matter of your preference for quick sales or risking/slower sales but squeezing every ounce of money from an order.

My Personal FBA Pricing Strategy

Personally, I set prices to sell and to sell as quickly as possible.  Once you’re in the game for awhile you’ll soon realize to achieve big sales numbers with non-collectible books it all comes down to quantity.  This is what I concentrate on.  Here is a screenshot of my exact rules for pricing FBA listings.

You can see that it’s set pretty aggressively.  Notice the checkbox at the bottom called “Include shipping rates in competitive pricing logic”.  This is Monsoon’s way of saying “we know this is an FBA listing and we know how to play the $3.99 strategy referenced above”.  Most repricers will have a FBA function where they will automatically add $3.99 to your price because they know every FBA seller worth their salt will take advantage of the sorting incentive.

This strategy is working for me because since I’m able to source books so cheaply ( < 3 cents/book) this means I can remain competitive and profitable much longer than someone that has to pay much more for his inventory.  Another example of the beauty of thinking outside the box, people!  SIDE NOTE: Keep your eyes peeled for the exact source I use and dozens of other virtually unknown sources in an upcoming eBook via the email list.

Ignoring non-FBA Listings Completely

I’ve got a friend.  We’ll call him, George.  George has tried to convince me over many emails that I am leaving money on the table with my strategy.  He is a firm believer in ignoring non-FBA listings completely in his competitive pricing strategy and only acknowledging Amazon itself as a competitor.  This strategy has it’s definite advantages and according to George, he’s lost count on the number of times he’s sold books for over $10,15 or even $20 when the book could be considered a “penny book”.  The reason?  He’s taking like new books, ignoring everyone else and undercutting Amazon by a little bit.  I can see the reasoning and it’s very tempting to do.

Why are people buying books from George at such insane prices when they could get the book for much, much less?  Refer to my video about incentives.  He’s laser targeting Amazon Prime customers and customers taking advantage of the free Super Saver shipping.  Think about this for a second.  Let’s say you’ve paid $79 for your yearly subscription to Amazon Prime and you’ve gotten accustomed to the “right now” mentality.  Prime members always get free 2-day shipping.  Quick.  Fast.  Right now.  Me want!  If you were accustomed to getting your orders super-quick all the time for free would you want to hassle with a 3P seller shipping you a separate order via USPS media mail shipping?  Prime customers are willing to spend a little more to get it Amazon-quick.

Also, put yourself in the shoes of a customer that has $15 worth of stuff in his cart.  He’s eyeing a book that has 10 offers for a penny+$3.99 shipping but a FBA offer that’s $10 with FREE shipping AND fulfilled by the name that has seemingly sealed the “super quick and reliable” image in their brain; Amazon.  Sure, it’s $6 more but this customer would spend more than that on lunch tomorrow.  He thinks, “What the hell?  Let’s just get it here quickly and all in one order.”

Finally, most of these books are in like new condition.  Like new and new are pretty synonymous and I would bet a Prime customer wouldn’t care if a remainder mark were on a book or the book had a few minor scuffs.  If you use this method, pay close attention to condition.  You can try to compete with a $29.99 brand new copy from Amazon with your $28 good copy but I really don’t see someone throwing you a bone.

Tweak, Monitor.  Tweak, Monitor.  Bingo!

Once you have that pricing strategy setup don’t just let it sit there!  Times changes and so do sales.  Periodically check to see which books are selling, which books are sucking storage fees and try to pin down any trends that you see.  For example, if you’re noticing a number of books not pulling their Lose Weight Exercise and just relaxing on your dime, drop their price manually instead of waiting for the repricer to do it.  Storage fees aren’t that much but they will sneak up on you if you get lazy.  Stay active with your FBA listings!  You’ll find that it’s so easy you’ll just forget about your FBA listings once they leave you.  Don’t!  Pay attention and tweak to achieve maximum efficiency.

Fulfillment by Amazon has done a lot for my business and thousands of other businesses as well.  By taking the time and performing some due diligence with FBA prior to starting will do yourself a big favor.  Tally up all costs, book Lose Weight Exercises, time to process a shipment and other important metrics to determine what’s best for your business.  Most importantly, remember there is never a “right” price.  You can choose whatever price you’d like with FBA.  Just remember to be aware of your sales goals and consistently monitor your sales activity to ensure you’re meeting your own goals.

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Amazon FBA Pricing Strategies to Stick it to Penny Book Mega-Sellers [ 13:25 ] Play Now | Play in Popup | Download (182)

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!

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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.