Whether you’re new to selling on Amazon or have been an Amazon seller for a while, a burning question sticks out: how can you take advantage of Amazon to build a profitable book selling business?

Here are five steps we recommend:

#1 Understand the bookselling market

The most important thing you can do in order to create a profitable book selling business online is to keep your finger on the pulse of this business.

There’s a common misconception that people aren’t buying books anymore, but this couldn’t be further form the truth. Trends across the US last year have shown that books are the largest selling category on Amazon, proving not only that there is demand for books online, but that this demand is massive. 

Another popular myth is that Prime is becoming obsolete, but if you follow the paper trail, you’ll see that over 140 million people are subscribed to Amazon’s Prime services in the US alone. In fact, Amazon’s entire business model is focused on increasing the number of Prime subscribers and active users.

The magic of prime is that bother buyers and sellers benefit greatly from Amazon Prime. As a seller on Amazon, you gain access to Fulfillment by Amazon (FBA), a service designed to allow sellers to focus on what matters most - selling - and leaving the logistics to the pros. With this service, you can ship your products to Amazon, who will then handle 100% of the logistics (and hassle) of picking, packing, delivery to the end customer- they’ll even manage returns. 

And by signing up to be an FBA seller, your listings automatically qualify for Amazon Prime, meaning an ever increasing demand for your products on the platform. 

One of the best aspects of selling as an FBA seller is that buyers are not as price sensitive, meaning that they are willing to pay significantly more for items that are eligible for prime shipping. This creates an interesting dynamic on amazon- books that are not fulfilled by amazon have lower demand (and lower prices as a result) providing a massive opportunity to pick up books for pennies on the dollar and simply re-list them at a higher price using Amazon’s FBA services.

#2 Set the right Amazon mindset

First and foremost, you must understand that this is not a get-rich-quick business- you’re in an investor style business. But this is a good thing, because when you break it down, what this really means is that online book arbitrage is a legitimate and sustainable business model where you can generate thousands of dollars in profit, month after month. 

A key to generating high profits with this business is to make decisions backed by data - not assumptions. After all, you know what they say about people who assume...

Now in order to get started in this business, you need two things: 

i) A medium sized inventory 

Identify a healthy mid-point for your inventory size - not one book but not a thousand either. The more books you start with, the faster you can make money, but even if you start with a few hundred dollars in books, you can continue to roll your profits into buying more and more books, increasing your profits month over month. 

ii) A realistic time frame 

It’s important to understand that books will not sell immediately, and one month is not enough time to be able to draw any conclusions about whether you’re succeeding or failing online. If in six weeks or two months half your books are sold – that’s really, really good.

It’s also important to understand that Amazon is a market, and like any market, the prices are based on supply and demand. Prices go up and down, and there will certainly come a time where the price of a book drops or you get undercut by a few other sellers. But there's no need to panic- Simply ride it out, make pricing adjustments within your profit window, and over time your book will sell.

Remember, if you get underpriced by two sellers by $20, this is not a sign that you need to drop your price by $20, or that the book is now worthless. Soon these two offers are going to sell out and you’ll be next in line!

#3 Practice the basics of online commerce

Three words: low-hanging fruit. If you want to get started with online book arbitrage, here are two best commerce practices you can use to maximize your profits:

1. Condition Description:

Online selling requires a lot of customer confidence, and selling books online is no exception.The condition description of a used book is very important, as you want the buyer to know exactly what they are getting for their money. Is it filled with notes? Are the pages torn? Is it dog-eared on every page? Or is it in mint condition? Putting to rest any concerns the buyer might have by providing an accurate condition description will greatly improve your sales. 

2. Feedback Score: 

Essentially the feedback score informs potential buyers what to expect when purchasing with you - how reliable you are, the quality of your products, and the overall shopping experience. Managing your feedback score builds your seller credibility, and you should aim for a healthy feedback score of above 90% to build trust and confidence. Online businesses that share a strong, healthy feedback score will be able to attract more customers with greater confidence to purchase- which means more sales, faster, leading to more profits for you. 

#4 Monitor the Amazon sales rank

The Amazon sales rank measures how well a product is selling (its estimated demand) compared to other products within the category. The lower the rank, the higher the demand.

What does this mean for you? When you start looking to purchase books to build a high quality inventory, always look for ones with a lower sales rank. It doesn’t matter what the edition is, what year it was published, etc.. nothing else matters but sales rank. Sales rank is your purchase criteria because that will determine how well it will resell. 

#5 Master the pricing strategy

For everyone just getting started with no prior experience, one of the biggest dilemmas is getting the right price. Do you start low to attract more customers or go big with a higher price tag and hopefully make more margins?

For simplicity, matching at the lowest FBA price is a good start. Over time you can get more technical with pricing your books to maximize your profits, but to get started this is a simple and easy way to get up and running. 

The golden rule of FBA pricing.

When it comes to pricing, the best way to get started is by pricing higher than the lowest FBA offer. 

Let’s do the math on this real quick:

You buy a book for $10 and the current low FBA offer is $20, with the second FBA offer at $31.

What this means is that there is one book for sale with prime shipping for $20, and once this sells, the next book is available for purchase at $31.

If you set your price at the lowest FBA offer of $20, you may sell your book a little sooner, but you would only make a $10 profit.

But instead, if you set your price below the second FBA offer of $31, at say $30, after the sale of the first book, you’ll be next in line to make the sale and will end up with a profit of $20.

Repeat after me - pricing higher than the lowest FBA offer is a winning FBA pricing strategy.

The other side of the pricing coin: Repricing.

Prices change fast and that’s okay. They even change between when you ship your books and when they hit the warehouse. They may even change before you get to the UPS store to drop those boxes off. That’s totally okay, and it doesn’t mean your books are now worthless. It just means that you have to be fluid, adjusting your prices and manage your inventory quickly. 

During a price drop, the idea of staying calm (like you would in a stock market) still applies. You have to get comfortable with book price fluctuations and know when to adjust. Some days the market is up, some day the market is down, but as long as you buy your books right, sooner or later you’ll be able to lock in a solid profit on an overwhelming majority of your inventory.

For example, if you get underpriced by three people, it’s not necessarily an issue. However, 10 people undercutting you is giving you a heads up that it would be smart to adjust your price on that book and get into the top three in order to get that book sold.

Now with that being said, as with all businesses and investments, you may lose money on a small percentage of your books, and this is totally normal. All that matters is that you make profits overall.

Key takeaways:

• Understand the bookselling market and make data-driven decisions
• Align your expectations to reality with the right Amazon mindset
• Build a strong foundation with the basics of online commerce 
• Monitor the Amazon sales rank to buy quality inventory
• Price smartly and reprice often

By focusing on the tips above, you’ll be able to buy low, sell high, watch your inventory turn over quickly, and generate thousands of dollars in profit (month after month) in the process.