As a bookseller for 7 years and a prep service owner, I have seen A LOT of textbooks go through my doors. I not only know how I run my business, and the mistakes *I’ve* made, I’ve also seen a lot of other people make mistakes (mostly the same mistakes) and I’ve seen what works (and seen it work for a lot of people.)

Since at Central Virginia Prep we have clients arriving all the time who are new to textbook arbitrage, I thought I’d share the secrets, tricks of the trade, and unknowable pitfalls that await.

 

Assumptions about You

The first thing we’re going to do is start with assumptions. First of all, I assume that you want to make money; ideally, a lot of money.

Next, I assume that you’d like to have the making of money be as painless as possible and that you’d rather spend your time researching more inventory to buy than chasing returns.

Finally, I assume that all other things being equal, you would take a smaller profit margin if it meant fewer headaches. Some people do construct a business model around vigorously negotiating for full refunds as opposed to returns but few people have the stomach for it.

So, keeping all that in mind, note that what I’m about to tell you might not always be the most profitable methods on the surface, but they will avoid the majority of the problems you will encounter.

 

Secret #1: All conditions are not created equal

A lot of people think that the secret to fewer customer complaints is to buy and sell New-condition books. Or, they are attracted to the margins on UA books.

All would be well if an enterprising textbook flipper could trust that books with a given description would actually arrive in that condition. But that’s not what happens.

The rejection rates will astound you.

Here’s the breakdown:

  • New books: 80%+ rejection rate due to condition. More if you add gating.
  • LN: Typically more like VG, but shrinkwrapped, so you don’t know WHAT you’re getting. Sometimes we open these up for our clients and they are written in or have broken bindings, so you essentially just paid a premium for someone to shrinkwrap it. Also frequently gated. (We’ll get to gating in a minute.)
  • VG/G: Fewest problems in this section.
  • A: 25-30% return rate due to broken bindings, loose or missing pages or excessive water damage. UA books are TRASH. Also, tons of Instructor’s Editions/other editions get mixed in (unscrupulous sellers don’t expect you to complain when you get a pristine IE for a book you thought was going to be UA.)

What experienced sellers do instead:

  1. Buy UG or UVG exclusively
  2. If you buy N/LN because you got a good deal, plan your margins around shipping it VG (this avoids both condition issues and gating issues.)
  3. Avoid UA entirely.

 

Secret #2 Avoid gating issues

I mentioned gating several times above, but you might not know what it is yet. Gating is when a particular title is not allowed to be sold through Amazon, either

  • At all for anybody
  • In a certain condition, or
  • Just by you.

It’s very confusing and can be hard to anticipate. Recently we are seeing issues with Amazon gating products in “Refurbished” condition. Now you may argue that you are selling it Used, but it doesn’t seem to matter to Amazon— that title is still unsellable. We can ship it in for you, but it is still gated.

There are two ways to avoid this issue. You can (and should) check your ASINs before you buy— there are plugins that can handle this but I don’t believe they catch the Refurb issue. Run the ASIN through the Add a Product page in Seller Central and it will let you know if there are any issues.

The vast majority of gating happens with N/LN titles, so you can avoid most problems by simply never attempting to sell in these conditions.

Now, you might be thinking, what’s the issue here? Why can’t I just buy and deal with any problems that come up?

Sure, you can do that. But when you buy a book, get it delivered, and go to add it to an FBA shipment, and it’s marked as gated, what are you going to do with that book? You can’t sell it on Amazon. So then you have to set up a return. And if there’s nothing wrong with the book, the seller is within their rights to make you pay return shipping. So you just lost $4 in shipping, plus the time to figure this all out.

To make matters worse, Amazon doesn’t exactly go out of their way to prevent you from shipping that book in. It will be marked as “Inactive” and not simply “Inactive-Out of Stock” after you do your listing upload, but they won’t prevent you from adding it to a shipment. Some of our clients discovered this only weeks later, when a book was discovered on the Stranded Inventory page. Amazon won’t list it for sale, so it just sits there, collecting storage fees.

What experienced sellers do instead:

There are two main strategies here:

  1. Avoid selling N/LN books, but only do the most cursory gating-checks (ie, a plugin) but take your lumps on the return process if any sneak through.
  2. Run every ASIN through the Add A Product page to verify that you can sell it.

I don’t have enough data to verify this, but my sense is that the longer that you’ve been an FBA seller, the more likely that #1 will work for you. It could just be that my more experienced sellers are buying smarter, but it definitely seems that my newer sellers run into many more gating issues than people who’ve been selling even a year or two.

 

Secret #3 Buy “Off the River” with Caution

As you can see in the first two secrets, most of the problems you’ll run into as a textbook flipper are resolved by returning your inventory to the place you bought it from.

The thing about that is that without Amazon standing behind them tapping a big stick, vendors are NOT thrilled about taking your return. They frequently make tedious demands about documenting condition, about shipping methods, and will often refuse to reimburse shipping or charge a restocking fee.

This means that whenever you have an issue with a book, you have to go through several emails, get the shipping instructions, get the book shipped, then follow-up a week later to make sure you were properly reimbursed. Whereas on Amazon, you click a few boxes and print off the prepaid shipping label.

Anecdotally, Amazon’s “big stick” also seems to reduce the number of Instructor’s editions you receive and removes the International Editions almost entirely, whereas other marketplaces still allow these items to be sold.

What experienced sellers do instead:

Although there are often deals to be found on marketplaces like eBay or Abebooks, or on individual megaseller’s sites like Thriftbooks, my most experienced sellers understand that this cheapness comes with a cost.

They tend to do the bulk of the buying on Amazon, but when they buy elsewhere they note who is good to work with and who is not. Everyone has a blacklist of places that they will not do business. If you buy off-Amazon (or even on-Amazon) I suggest you start one too.

 

Secret #4 Stay On Top of Admin

Everyone loves the thrill of the hunt; scoring a great deal is what gets a lot of us in this game. But, without keeping detailed records, the whole business falls apart.

The mail system is honestly pretty good, and it’s not at all unusual to get a book in the mail two days after you order it. That means that if you’re working with a prep service (like us) you can’t buy books during your coffee break at work all week and assume that you can add them all to the spreadsheet on the weekend. The checkers don’t like to have to slow down to add titles to your spreadsheet— not only that, but having to add things to the spreadsheet might mean that someone has accidentally shipped you the wrong book and that means there’s a problem to track down.

If there’s one thing prep services hate, it’s having to track down problems. We want things to go smoothly and orderly AT LEAST as much as you do.

Not only should you keep your spreadsheet updated, you should also review it regularly for issues. At Central Virginia Prep, the checker will assess the condition of the book and may enter short notes that may be important — like the book was water damaged.

Some clients will get returns if there is a book that has undisclosed water damage, and some don’t; but some clients don’t even realize there is anything on the spreadsheet until the time comes to ship— and then they are upset that the book wasn’t in the condition ordered, and tell us that they would have gotten a return if only they had known!

The other administrative issue you want to stay on top of are tracking numbers. Every couple of weeks, make it a practice to look up the oldest orders in your spreadsheet that have not yet arrived. Often these have been cancelled but you didn’t receive the notification. Sometimes they are shipping from overseas (and this is a clue that the book is much more likely to be an International Edition or counterfeit, so you should try to cancel the order.) Sometimes they are marked as “Delivered” when they are not checked in. When that happens, the most likely reason is that we received a DIFFERENT book and that book was simply added to your spreadsheet.

It’s a relatively simply task to solve any of these issues when the matter is fresh, but clients that let several weeks go by often find to their frustration that the return windows have closed or that their outgoing shipments get delayed while things are figured out.

What Experienced Sellers Do:

Many of my sellers seem to have a habit of checking in on their textbook business each evening, as I arrive each morning to an emailed set of instructions for notes left in the spreadsheet.

 

Secret #5 Repricing is Key

It’s not sexy. It’s down right boring. And worst of all, it can’t be automated! Even more than dealing with crappy books, the worst part of textbook flipping is repricing.

Repricing is both art and science, and quite frankly, if you avoid it, you will fail. Pricing strategy is too deep to go into here, but I really like Peter Valley’s Pricing Mastery course. You can still learn a lot from free videos and blog posts if you don’t want to invest in the course. But the course has it all in a nice tidy curriculum.

What most people do with their textbook prices is set it and forget it. After all, life is busy, and it’s way easier (and more fun) to search for new books to buy than it is to scroll through your listings tweaking prices.

But here’s the thing. Checking your prices isn’t just about clicking a mouse button to “Match Lowest.” Repricing is about checking in on the market, assessing it, making a decision about where to price your book based on the demand and the competition.

Repricing, done well, means that you are making a decision about WHEN your books sell and HOW MUCH they sell for. It gives you a level of control over the outcome (the outcome in this case being profit.)

I see a lot of people treat Amazon businesses like a slot machine. They save up, they insert money, they pull the lever and…. Nothing. Insert money and…. Nothing. They do it over and over, telling themselves that they’re faithfully following a “foolproof system.”

There’s nothing foolproof about textbook flipping, but it’s possible to profit when you put in the work. The reality might not be your idea of easy money (have I mentioned how tedious pricing is?) but it’s far from digging ditches type of work.

What Experienced Sellers Do:

One seller told me he spends about 25% of his time on the repricing. I think that’s about right, especially in the beginning.

Repricing is learning time. When you buy a book and you’re looking at your Prime competitors, of course you only buy the books that sell for a lot of money Prime-fulfilled. But you will notice that these things fluctuate, and that you don’t necessarily see sales at those high prices you anticipated when you bought– maybe megasellers came in on Aug 1 and flooded the market with that title, selling it for 70% of what you wanted to sell for. It happens.

So repricing, when you start, is part science experiment. You hypothesize what you’ll get for the book, and then you are testing the hypothesis. If you keep track of what you thought you would sell it for vs what it actually sells for, your next round of textbook buying will be a lot better!

There are ways to get your time spent on repricing down, of course. You can reprice actively during the textbook season and then put your books at “set it and forget it” prices in the off-season. (This option isn’t as attractive as it once was, now that LTSFs will accrue monthly.)

You can reprice weekly in the off-season. Or monthly.

When you deeply understand repricing and feel like you have the optimum strategy, then, and only then, should you outsource the repricing. (And even then, you’ll want to keep a hand in.)

The most experienced sellers know that repricing helps them to make sale happen and meet their revenue goals. They don’t just allow things to shake out by themselves.

 

Bonus Advice To Get Profitable Fast:

All the time, I get emails from potential clients “I’m going to try this; I don’t have much money, is it okay if I just send 3 or 4 books a week?”

No. Don’t do this.

I can see where you’re coming from; you want to learn the ropes, you don’t want to bet all you chips until you feel like you know what you’re doing.

But the problem is your margin. (I know you don’t know what your margin is yet. That’s what I’m here to explain.)

The average textbook is 3-4lbs. In a large shipment of items, if you’re lucky and Amazon sends them to the nearest warehouse, you can get prices of $.25-$.30/lb. Please note that you lose about $1 on your net profit in this scenario.

If you only send three books at a time, you wind up spending $10-15 in shipping that package. That’s triple the amount on shipping. $3-5 out of the margin on your book is a lot. Especially because newbie sellers don’t want to spend a lot on their books, so they’re buying books in the $15 range and hoping to sell them for $50. If you were buying a book for $50 and planned to sell it for $150, then your margins could more easily absorb an extra $2/book in shipping costs. But in that case, unless you have a lot of capital to invest, you’re going to send many fewer books, which puts you in the same bind.

What Experienced Sellers Do Instead:

As I’ve told every client that asks me for advice, here’s the best bang for your buck:

  1. Figure out your budget. If you’re going to spend $500 on books to test this business model, decide that now.
  2. Select your inventory. Do not be squishy on your standards; profit comes most surely from buying low, not selling high.
  3. Spend, within 2-3 days, all of your inventory budget, and have it shipped to the prep service of your choice.
  4. Wait for all of your inventory to arrive. If you want to do this the most economical way, they’re no point in sending two or more shipments, even if you do technically have enough to make a “full” shipment.*
  5. Ship all your books in. Discipline yourself to learn the pricing side of the game. Way less fun than buying, but that’s where you’ll see the most results.
  6. When you have recouped enough of your investment to feel secure in buying again, repeat.

*This doesn’t count if you’re coming up REALLY close to textbook season, but try anyway, because the margins are where the money is at.

The very experienced sellers (the ones who also have a large budget, or textbook flipping is a large portion of their sales) buy constantly and ship regularly. But for most people, in the early stages, or who have other income streams, this is the most profitable and economical method.


Hopefully this article will help you avoid the most common pitfalls and make textbook flipping a profitable endeavour without causing you to tear out your hair. It doesn’t take long to learn the ropes, and this should launch you towards profitability much faster.

As always, if we can be of any help at Central Virginia Prep, please ask!