Lately, I’ve been busy with a business involving books and Amazon. If you don’t know what I’m talking about, please read my previous post: How to Make Money with Textbooks on Amazon?
In that post, I was telling about a simple method to earn money from buying textbooks and sending them to Amazon through their Trade-In program at a higher price. Yes, it’s true, Amazon is paying you for certain used books, and sometimes at a higher price than the one at which you can purchase.
But Here’s a Problem
Amazon doesn’t give you cash, but only virtual money on your gift card balance. In the training included in Textbook Money program, several methods to cash out your gift card balance are described, one of them consisting in buying and selling books.
Which brings us to this article’s topic, the best way to convert Amazon gift card balance to real money:
This is not only an excellent method of cashing out your gift card, it actually takes earning money with books on Amazon to a whole new level. Not only with textbooks, but with ANY books. If trading in your books could bring you an ROI ranging somewhere between 5% and 30%, rarely more, book arbitrage can give you much much more, typically in 100% – 300% range! I already went through that experience and I must confess, it worth every dollar spent!
Of course, book arbitrage is a business by itself, you don’t need to link it with the trade-in model. Linking the two models is entirely optional.
What’s Book Arbitrage All About?
Arbitrage is just a way of saying: buy low, sell high. The book arbitrage business model that I’m talking about in this article is like this: you buy cheap books from MF sellers and resell them back on Amazon as an FBA seller. The principle is similar to the trade-in model, but it uses a different method. You will become a seller on Amazon and this obviously involves creating a seller account, which will be covered in another post.
Maybe you are wondering what’s the meaning of these acronyms. Here we go:
- MF – Merchant Fulfilled. The inventory is kept at the merchant’s premises/warehouse. The merchant is responsible for fulfilling the orders of his customers, that is preparing and sending the items to the customer’s location as fast as possible. The merchant is also responsible for customer support.
- FBA – Fulfillment By Amazon. The inventory is kept at Amazon fulfillment centers/warehouses and the orders are fulfilled without any involvement on the part of the merchant. The prices at which an item can be purchased through FBA are typically higher.
You can recognize an FBA offer by the accompanying Prime logo, meaning a customer can place orders for these offers only if he or she is subscribed to the Prime membership.
Now I Feel You May Have a BIG Question:
Why on Earth would somebody purchase a higher priced item from an FBA seller instead of purchasing the same item of the same quality at a significantly lower price from an MF seller?
It’s simple! A Prime member is paying a subscription fee of $8.99 a month or $99 a year in exchange for a number of benefits, two days shipping and professional customer support being among the most obvious. A Prime customer is paying the price because he is not willing to wait for 15-30 days until the ordered item gets to his place. Also, he will be more willing to pay a higher priced item because he wants to justify the subscription fee he is already paying for the Prime membership.
That’s how things are with the FBA sellers and Prime buyers in any niche, but with the books, things get even more interesting! The book market, and especially the textbook market is a forced market because the students are compelled to buy all kind of books they need for their courses. And because in many cases they must attend a course in a week or so, they need that book ASAP. And that’s the part where the FBA offers come to the rescue.
Book Arbitrage Insights
Same as with the trade-in model, you need to do some research to find good deal books, but this time you need to pay attention to entirely different indicators. Basically, you need to find books with these basic features: good sales rank (the lower the number, the better), low MF offers and high FBA offers.
And how to easily find those deals? The guys behind Book Arbitrage program (same guys as those from Textbook Money, Luke Sample and Jon Shugart) are providing a special search engine that makes the entire process a breeze.
As a bonus, there are two free tools on the Internet that can help you greatly in your research. They are in fact price trackers providing historical data about Amazon items. Here they are:
Upon ordering your books, you can send them to your place, or you can use one of the many FBA prep services widespread across the USA. Beware, it’s not about the prep center provided by the Textbook Money program, which is specifically designed for the Amazon trade-in program, it’s about entirely different services specialized in prepping and sending items to FBA fulfillment centers.
As for the pricing, you have to understand that you are not competing against MF sellers, you are competing exclusively against other FBA sellers, so as a general rule your price should be one cent below the lowest Prime offer price.
But patience, this topic is so vast that it cannot be covered by just a simple blog post. Everything is laid out in great details within the training included within the Book Arbitrage program.
But How to Get Inside?
The Book Arbitrage membership is accessible only to Textbook Money members, so if you ever decide that this is for you, first you need to purchase the membership to the Textbook Money program. Here is a direct (affiliate) link to the checkout page.
If you need to review the presentation video, here is the link again.
The book arbitrage business model was quite lucrative for me, as was the trade-in model last year. It simply works out of the box. Simply put, in late December 2016 I used my entire revenue from trade-ins into book arbitrage, which was a little over $1300, and in 6 weeks I already had a positive net profit. Boom! In 5 months I already earned multiple times my initial investment in net profit.
In the next picture, you can see my current sales summary for a relatively slow period. Only 10 units sold during the last 30 days but still got almost $500 in revenue. 🙂
In order to make it work you need to invest upfront in your initial inventory. This has nothing to do with the program itself, this is just how trading with physical products works.
Also, this is not like with trade-ins where you get your revenue in a couple of weeks, you need to wait until somebody purchases your items.
In addition, the program itself is a little bit pricey. The initial payment is $997 and there is also a monthly fee of $97. These are for the Textbook Money. Plus a monthly fee for the Textbook Money program, which can be at a discounted price. But if done right, you can catch up these costs very quickly because the model is easily scalable.
You can also reduce your expenses by freezing your membership while you are just waiting for your books to sell.
Book arbitrage is a perfectly doable business model and it can be started with as low as a few 100’s bucks. Of course, the more you invest, the faster it grows, but it is suitable for all pocket sizes. Anyway, before taking the leap into the book arbitrage business you have to think thoroughly about all the above considerations.