Online book arbitrage is the simple process of buying cheap books from Amazon merchant-fulfilled sellers (FBM) or third-party sites for a low price, and then reselling the books using Amazon FBA (Fulfillment by Amazon) at a higher price, allowing you to keep the difference as profit.

But people ask the question... if it’s the exact same book, how can you make a profit buying a book on Amazon and reselling the same book in the same place? 

Unlike real estate property or luxury watches, the item in discussion is regular, boring books...yet this is an under-the-radar business model where you can earn thousands of dollars a month in profit.

The difference between FBM and FBA

To really understand how online book arbitrage works, we need to understand the difference between the types of Amazon sellers out there.

Fulfillment by Merchant (FBM) is when Amazon sellers take full ownership of their online business and manage operations from A to Z. This includes listing the products online and managing all the way up to shipping orders to customers’ doorsteps. 

FBM sellers pay a small fee to Amazon for using their marketplace, and as a result they price their products cheaper. Yet the downside of buying goods that are FBM on Amazon is that you do not get access to the lightning fast delivery that Amazon customers are now used to, meaning that an item that you order may take between two and three weeks to be delivered.

Fulfillment by Amazon (FBA), on the other hand, is when Amazon sellers hand over the entire fulfillment process for Amazon to manage. By keeping your products in Amazon warehouses, sellers don't have to deal with the hassle of packing and shipping items, with warehousing, inventory management, and order fulfillment is automatically processed by Amazon (even including customer service and returns).

Selling on FBA does cost a little more money (as they're handling a majority of the work for you) yet Prime subscribers who purchase items from an FBA seller are eligible for fast shipping (within two days) at no additional cost. And the best part? A majority of online buyers are willing to pay significantly more for the exact same items to get access to this faster shipping speed.

The strategy of this business model is simple: buy cheaper books from FBM sellers, ship the books to an Amazon warehouse, and then relist the products at a significantly higher price, keeping the difference as profit for yourself with minimal work required. 

And the best part? Online book arbitrage is not temporary or a fad. On the contrary, it’s a legitimate, sustainable business where both you and the customers get to enjoy the benefits. For the sellers, it is a higher profit margin and smoother order management, and for customers, it’s the added value of getting their orders delivered with lightning fast prime shipping. 

And in the age of instant gratification, this is a trend that is here to stay. 

Are people really willing to pay more for “prime” items?

With this business model, you’re basically taking a low-value book, purchasing it, adding tons of value to it by making it FBA, and reselling at a higher price. Here’s a few of the reasons that people are willing to pay significantly more for FBA books 

1. Guarantee

Amazon has built-in trust. And as an FBA seller, people extend this trust directly to you. Customers purchasing from FBA sellers pay a higher price for peace of mind when shopping online, knowing the Amazon guarantee that their order is going to arrive quickly.

2. Reliable order tracking

Prime comes with reliable tracking that allows customers to monitor the exact status of their order shipment. Tracking is usually terrible or non-existent with merchant fulfilled offers which makes for a poor online shopping experience. 

3. Save time with express shipping 

By using Amazon’s system, customers receive their items within 24 to 48 hours, as opposed to waiting weeks to get books from sellers that manage their own fulfillment.

4. Hassle-free returns

As an FBA seller, Amazon fully automates the returns process. If a buyer wants to return something, that’s all handled through Amazon, which means that you don’t have to do anything, and customers know if they have to return something, that it’s really simple.

Putting this all in perspective

A simple example of this business model is dining out. How often do you go out to eat and think, “I could have made this at home!” 

Consider brunch - it’s literally eggs on toast. There’s only so many ways you can scramble an egg, just as there are so many identical books out in the market, yet you pay significantly different prices depending on where you consume or purchase them.

Why are you willing to pay five times more to have brunch in the restaurant? Because there’s a value-add. You don’t have to get the groceries, fry the eggs, or clean the pans. You get to enjoy the convenience of having a meal cooked and brought over to you while you enjoy good conversation with friends. 

Another example is flying. At the end of the day, the destination is all the same whether you fly first class, business class or coach. Yet the differences are clear as night and day. When you pay more to sit in first class, you’re paying for the comfort of extra leg room, the friendlier cabin crew who caters to your every whim and desire, and the sparkling water and champagne options served after take off. It’s this experience that many people are willing to pay a whole lot more for.

Selling items with Amazon Prime provides massive value that people are willing to pay significantly higher prices for, and this is the backbone of online book arbitrage. 

Sure people could say that people are paying more for the exact same thing, but you now know that's far from the truth. When a person buys an item that is FBA, they’re getting tons of value, they know exactly what they’re getting, and by providing this additional value, you’ll earn thousands and thousands of dollars a month in profits.