A couple weekends ago I was exploring a thrift shop in my neighbourhood and saw some really great books for $3. Right away, it got me thinking. I knew these books were worth way more than $3, could I do a little arbitrage and become a middle-man used book dealer?
Selling Books Online: A Weekend Hustle
I knew selling used books wouldn’t give me life-changing income, but I thought exploiting this market inefficiency could be worth a few hundred dollars each month. Some further digging online confirmed my suspicions. I even stumbled across videos and blog posts of individual sellers making a full-time income by selling on Amazon.
So I went back to my local thrift shop, and bought a handful of books. These were really solid books too, the kind of popular business books you’d spend $15 or $20 on at a typical book store. They were all lightly used, but free of page markings and any real flaws.
So I brought the books home and posted them on all sorts of marketplace sites. And after scanning Facebook Marketplace, Craigslist, eBay, and Amazon, I realized the only liquid used-book market is Amazon. Book listings on every other platform were sporadic, making price discovery almost impossible, and high-volume selling a nightmare. So I went ahead and uploaded my first batch of inventory to Amazon.
My First Amazon Book Sale
Within a day, I sold my first book, but I quickly realized my margins sucked. I had bought a copy of Sheryl Sandberg’s Lean In for $3 at the thrift shop and sold it for $8.49 on Amazon, but I forgot to account for shipping fees. In Canada, the cost to ship a book across the country is about $13 per book. Brutal.
So I was going to lose more money on shipping fees than the entire purchase price of my new book. But I got lucky. The buyer happened to live in Toronto, not far away from me, so I drove to the buyers home, and hand-delivered the item. Amazon still gave me a small shipping credit, but I didn’t have to pay any carriers. I dodged a loss on that book, but it wasn’t a sustainable strategy.
When Amazon took their cut for selling on their platform, I was left with only $4.73 on my $3 book. Technically a positive return, but not a scalable one. The hour I spent on packaging and delivery was not worth the $1.73 return.
A New Strategy: Amazon FBA
I had to come up with a new strategy. This time I tried a program called Amazon FBA. FBA means Fulfilled by Amazon, and the basic idea is that instead of me shipping individual products to customers on Amazon, I can ship all my books to Amazon in one giant box, and they store the books in their warehouse and send individual books to customers whenever they buy them.
I don’t have to worry about customer service, returns, or storage. Just pack one big box of books and ship them to Amazon. And the biggest benefit of this program is that I can send a box of 32 books for $10. That’s $0.30 per book, or a 98% discount compared to my $13 shipping costs as an individual. Insane.
And the only reason I can get this deal is because I’m under Amazon’s shipping umbrella whenever I send them inventory, they’re passing on their deeply discounted rates they’ve negotiated with UPS to me. Amazon sends me my shipping label whenever I create a new batch of inventory, and I just print it off. With FBA, any seller can piggy-back off Amazon’s shipping rates and save a ton of money.
So between labelling, boxing, and shipping, I now spend only $0.50 per book, which turned my unprofitable idea of selling individual books on Amazon into a pretty profitable side-hustle.
How To Start Selling On Amazon FBA
Step 1: Sourcing books. First I spent a few days visiting thrift shops and used book sales all over my city. Super easy to find them. Google is your best friend here. Then I used the free Amazon seller app to figure out what books are worth selling and what books aren’t, pretty straightforward to use. I just scan the barcode or the front cover and buy the books I can make a profit on and leave the rest.
Step 2: Prepping books. I ripped off old stickers, tried to remove any earmarks, bookmarks, and sticky notes left inside the books, to make them as nice as possible. Then I added the books to my Amazon inventory, priced them, graded them, and labelled them. For a shipment of 50 books, this can all be done in under an hour.
Step 3: Shipping books. I got a large cardboard box and filled it up with books. Then I printed my Amazon shipping label and dropped off the box at the UPS store. Just walk in and walk out.
Step 4: Wait. It took about 5 days for Amazon to receive my inventory, and by the 6th day, my books were live on the site.
Step 5: Profit. On my first day, I made no sales. But on my second day, I sold 4 books, followed by another 2 books a couple days later. So after 4 days I was at 6 books sold for a total of $102, which I was pretty excited about. But Amazon seems to be promoting my books more this week, as I’ve now sold an additional 13 books for $210 in the past 5 days. And the best part? I did nothing. I’m just sitting back, collecting money.
Average Revenue And Costs
The figures below represent averages that have remained consistent in my first two weeks of selling on Amazon.
Selling Price: $17
Purchase Price: $3
Shipping/Prep Costs: $0.50
Amazon FBA fee: $9.50
That’s $4 per book on average. And now I’ve got over 200 books that I’ve shipped off to Amazon warehouses. If all my books sell for a $4 profit, and I think almost all of them will, that’s $800 of profit from my $600 investment in underpriced books.
And now that my books are in the Amazon warehouses, they’re always online, and Amazon is trying to sell them for me as fast as possible. I do nothing. My prices are competitive, and automatically adjusting, so most should sell eventually, but some of them might take a couple more days, weeks, or even months depending on their popularity.
Winning The Amazon Buy Box
Since I’m a new seller on Amazon, I face one temporary challenge that seasoned sellers don’t deal with. I have to work extra hard to earn Amazon’s ‘Buy Box’ recommendation. Amazon’s Buy Box is an automatically populated button that offers buyers items from Amazon’s most trusted sellers. Since I have no customer reviews, I have an extra tough time getting my inventory featured on the Buy Box.
Even undercutting Buy Box prices is no guarantee that I’ll get preferred placement. And with over 80% of Amazon sales going to the featured Buy Box seller, it’s an uphill battle to start selling on Amazon. Over time, as I get more features on Amazon’s Buy Box, I anticipate also getting more sales than I have in the first couple weeks. But even with this challenge in place, I’ve still managed to sell over $300 of books in just 9 days of being live on Amazon.
Overall, I’m happy with my first couple weeks on Amazon. I’m going to double down and find ways to lower my costs and raise my average selling prices, to keep margins strong. For anyone looking for a side-hustle on weekends, this is a low-hanging fruit. Selling used books on Amazon FBA is also a great way for e-commerce entrepreneurs to get their feet wet in the space. You’ll learn lots about shipping, packaging, logistics, and sales, without having to create demand for a unique product.
And the best part, is that anyone can set up their own Amazon FBA account and launch within 48 hours. I’m going to do a full deep-dive on setting up your Amazon FBA operation on my YouTube channel shortly, so subscribe here if you want to learn more.