Sourcing and Understanding the Value of a Book

Understand Used Books

Introduction to Sourcing

Analyzing data is a critical part of sourcing. Let's begin by talking about data analysis and using software to identify books to sell. There are many scanning software options that offer pricing and barcode scanning. Scanning apps usually show the 20 lowest prices for the book. This data can be used to weed out low-value books but does not provide a complete picture. There are other factors to consider, such as season, average price, and sales demand. Knowing how price and demand fluctuate will help you find more books to sell.

In fact, the book you buy today might not be worth as much tomorrow. There are also books that have little value today but increase in value over time. If this occurs, you might be advised to not accept the book, regardless of its profitability.


What is the true value of a book?

How does seasonality affect prices? Looking at sales trends and how they change over time is useful. Book prices change frequently. The price of books fluctuates based on seasonal supply and demand. For example, many textbook prices will rise during the textbook season. (August, January, June) and this is an opportunity to increase prices as the textbook season begins.

In contrast, October is a challenging month for booksellers. The textbook season has ended, sales have declined, and competition is driving prices down. The low prices make it difficult to find inventory as scanning apps suggest rejecting otherwise profitable books. Thus, seasonality affects sales and sourcing.


FBA vs. FBM (Fulfilled by Merchant) Evaluation



How do we determine the true value of an item? (using Keepa Graphs)

To identify a book's value, we have to dig deeper. Keepa is the best resource for information on this topic. Keepa tracks an incredible amount of product data. This data includes the average price of each product over time, price changes, and all sales since the product was first offered for sale. This is extremely useful, as the graph will help you figure out when the next sale may occur and at what price you should list the book. Scanning apps provide a link that will direct you to the Keepa graph once you have scanned an item. There is currently no scanning app that fully utilizes this information, so we recommend investigating sales data while scanning. When in doubt, be sure to check Keepa for an overall picture.




Analyzing Keepa Data and Graphs

Note the green line that moves up and down in the graph above. Every time the green line drops down, that tells us that a sale has occurred. The more activity, the more confident you can be that the book will sell. This book, for example, is sold multiple times a day. The book would sell in no time if it were listed for sale and priced right. 

The dots represent various offers of the book on Amazon (by condition). For example, every green dot represents a Very Good Condition used book from Amazon. Observe that over time, those green dots are trending downward in price. In August the market price for this book was close to $30, in September it was $25, and in October it was only $18. This illustrates how high prices are prevalent during peak season, but gradually decrease as competition forces the price lower.

We sold this book and thought it was a good example of how important it is to ship books quickly. When I bought the book (in late August), I saw that it would sell for close to $25, making a profit of about $15. By the time the book was processed and received by Amazon, the market price was nearer to $19.99. By the time it sold, it had a profit margin of closer to $10. This is a good example of how prices can quickly change. 

Additionally, on October 22, Amazon was selling brand new copies of this book for around $20. When that happened, most of the other used offers stabilized in price at around $18. This illustrates a few points. Market value is controlled by Amazon's stock of new items. Sellers who use repricing software tend to set their repricers to always stay below the Amazon price. With this book, you can see that the price actually rose compared to the week before.  

This might seem complicated, but the fact is that market price changes due to many factors. Prices fluctuate, seasons influence value and Amazon controls the price when it sells the book as new. It's hard to see the whole picture just by using an app's information. Understanding Keepa graphs can help you make better purchasing decisions.



Why Merchant Fulfilled (FBM) Prices Matter

Merchant Fulfilled sellers have an important influence on the used books market. Although Amazon sellers do not directly compete with Merchant Fulfillment in terms of pricing, MF prices are helpful in determining how to price FBA items. The MF price is almost always Amazon's lowest price and if a book isn't popular, FBA sellers will price their offers close to MF prices.

Prime Bump

Customers should expect their books to arrive from a Merchant Fulfilled Seller within 2-10 business days. Prime books arrive in two days or less, so people are willing to pay more to get them faster. The "Prime Bump" exists because most Amazon buyers avoid MF offers and want Prime shipping. The image below depicts the "Prime Bump." (Merchant price is $19, and the FBA price is $85). 



Merchant Fulfilled Prices and Rank

This book has an average rank of 1.37 million and sells once about every 13 days. When a book isn't sold for a day, its rank falls by about 100,000. The current ranking of 510,000 indicates that the book sold 5 days ago. (These numbers are approximate).

This raises a question. If this book sells once every 13 days, how much higher can an FBA book be priced above the MF book? The answer depends on if there are FBA sellers involved. Above there are FBA offers for $89.99 with another for $85.99. In reality, the retail price elsewhere online is $26 dollars. What is going on here? It seems an FBA seller took a shot at creating the market. This book is overpriced and unlikely to sell for more than $26.

When this screenshot was taken, Amazon was not selling the book, so FBA sellers raised their prices. If Amazon were on the listing, the book would sell for about $26, and used FBA offers would be cheaper. The true used price should be about 19 to 26 dollars. The MF price is a more accurate indicator of the book's retail value. Many Merchant Fulfilled operations have hundreds of thousands of books available for sale. These sellers use proprietary pricing software that takes into account retail value and other factors. The lesson here is to use MF pricing as a guide to determine the market value.



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What is Amazon FBA?  (Fulfillment by Amazon)

Is the Market Oversaturated?

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This information was last updated, September 2021.

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