What is Online Book Arbitrage?

While digital media has disrupted a lot of industries, physical books still outsell e-books in the USA and across the world according to Statista Advertising & Media Outlook. Physical books are one of the most popular categories on Amazon and continue to provide solid business opportunities year in and year out over many other Amazon-based business models such as private label, retail arbitrage, wholesale, drop shipping and replenishables.

One of the ways you can make money from used books on Amazon is by buying books online and reselling those same books online (book flipping) - also known as online book arbitrage; you buy books directly on Amazon.com, usually from Amazon Merchant-Fulfilled (MF) sellers, or other websites, and then resell them books via Amazon FBA (a.k.a., ‘prime’) at a higher price for a profit. The profit margins with this business model are usually significantly higher than the other business models mentioned above.

Utilizing the FBA business model, Amazon will store your books, fulfill customer order and handle the customer service - all on your behalf.

The entire business can be run using your computer from anywhere in the world with an internet connection and, if using a USA-based prep center, you don’t even need to touch a book at all!

If you’re new to selling on Amazon, or new to online book arbitrage, you may have spent some time researching how this business model actually works. But the challenge that you have is sifting through a dizzying amount of information and knowing what applies to you and what doesn’t. There’s an endless amount of “sell used books on Amazon” information online (YouTube, Facebook, etc.), but much of it either doesn’t apply to online book arbitrage, or, perhaps even worse, is provided by those that don’t actually understand all that is involved with running a successful online book arbitrage business (hint, they focus on sourcing and not much else). Therefore, if you want to build a successful business on Amazon, it’s important to take advice from experts that actually understand and work the business and not just the software that helps facilitate it. So in this article, we put together top-notch advice from a level 5 Amazon seller who knows selling used books on Amazon with the online book arbitrage Amazon business model inside & out.

Master Book Flippers has compiled 5 important pillars of online book arbitrage and proven strategies that will give you a better understanding of what’s involved with selling on Amazon using the Online Book Arbitrage Business (a.k.a. retail arbitrage) model and help avoid making mistakes.

#1 - SOURCING

Sourcing Amazon FBA inventory is the most important pillar for an Online Book Arbitrage business model. Like any kind of business selling physical products, you need to acquire the product before you can start selling it. But sourcing books on Amazon.com, or other websites, can be a time-consuming & tedious process if you’re using the wrong software or no software at all. There’s been many sellers who have tried other online book arbitrage tools only to become frustrated in the time in which it takes to source inventory - despite the fact their marketing materials make it seem so easy.

Thankfully, Master Book Flippers has changed the industry and completely revamped the online sourcing process making it much faster and easier than ever before! Master Book Flippers is the first and only software to include a human element (i.e.,real people researching books for you!) built into the software - one of our favorite features we call Diamond Flips; on your behalf, real people look at Keepa charts, review seller ratings, look at book condition condition notes, suggest a buy cost & condition and selling price. Sourcing inventory has never been this quick and easy - really! And there’s not a whole lot you can compare it to since there’s very few, if any, arbitrage tools that also include this type of service.

#2 - INVENTORY MANAGEMENT

For any online book arbitrage business, a solid and effective inventory management system is a must-have. If you have physical products in your inventory, you need to be in control of what’s going on with your inventory.
And by “in control” we don’t mean looking at your inventory on Amazon and knowing how many books you have in stock.

Inventory management comprises the processes and activities that take place between the moment you source your books and the moment they sell to customers. Some of what “being control” of your inventory means:

• Knowing your profit margins after you purchased books and when you update your prices
• Knowing the details (date, condition, order number, condition, etc.) of the books you ordered
• Tracking returns & refunds (books you need to return to the seller and get refunded as the buyer)
• Knowing the value of your inventory.
• Ability to easily move/copy your information to other sources (i.e., repricers, bulk price changes within Amazon, etc.)

You can start your inventory system by taking note of every book you listed on a piece of paper or putting the details into a spreadsheet, but it’s not something that you can rely on long-term. As your business grows, it will be harder and harder to keep track of your inventory and it becomes a huge time-suck as you purchase more and more inventory; this is something most new book sellers seldom think about when they first get started. If you’re going to do it, you might as well do it right from the start.

Fortunately, Master Book Flippers software has you covered for inventory management. Our software has the inventory management component built directly into the software and you have complete & flexible control; another industry first!

#3 - LISTING AND SHIPPING

The Amazon FBA business model, regardless of product, involves sending your inventory to Amazon. But you can’t just send your books to Amazon without doing some pre-work. You have to let them know which books are coming in, their condition, etc. This step is called listing & shipping.

If you’d like to scale your business and free up a significant amount of your time working the business, it is highly recommended to have a prep center physically handle books on your behalf. But, if you have the capability and are physically located in the USA, we recommend that you physically receive & process the books yourself before handing the process over to a prep center. You’ll get a better understanding of the process. Your finest teacher will be your experience.

HUGE TIME SAVER...

Unlike other used book business models like the local where you go to your local brick-and-mortar stores or library sales, scan the books using an app, buy the books, bring them home, scan them again the second time, price them and send them over to Amazon – using Master Book Flippers, the process is much easier and quicker because our system uses Amazon’s bulk inventory loader where we list all the books at once. Let me repeat that - you list ALL your books at once. You don’t need to scan and look up every single book as you go in to list your books because you’ve already done that the moment that you bought the books using our system. So, using Master Book Flippers, it doesn’t matter if you’re sending 5 books or 500, the amount of time you have to spend listing your books on Amazon is essentially the same - just a few minutes.

#4 - REPRICING

Once you have your books for sale on Amazon, it is highly recommended that you reprice your books; ideally, you should be repricing all your inventory all the time. It will make a tremendous difference in your business by increasing your cash flow and improving your IPI score. 

Repricing helps you capitalize on having the right price at the right time. You can do this manually, which can be time-consuming, or you can use a repricer tool and automate the repricing of your books. If using Master Book Flippers software, since you’ll have a great inventory management system, it will make it easier to work with any repricer - Amazon’s repricer, or another 3rd party repricer.

#5 - AMAZON ACCOUNT MANAGEMENT

When you start selling anything on Amazon, it is important that you closely monitor your Amazon Seller account in “Seller Central”. That’s where you can find your sales in real-time, reports about your inventory, all the fees that Amazon charges you, policies of all kinds, information on how to sell on Amazon and key metrics regarding your Amazon account health. One of the more important metrics that you need to keep an eye on if you are selling FBA, is IPI or Inventory Performance Index. You need to keep tabs of your IPI because if it gets too low, you can no longer send your inventory to Amazon which you obviously want to avoid at all costs. You can learn more about IPI here (must be signed into Amazon Seller Central)

If you think that Amazon has a perfect way of managing your inventory where everything is well accounted for, you’re sadly mistaken. The truth is that Amazon loses products all the time; given the sheer volume of merchandise that flows through their warehouses each day, this is understandable and part of the business.

For example, if a customer returns a book, or any other product for that matter, the general expectation is that Amazon will put it back in your inventory and put it back on sale for you. But unfortunately, this process is not always perfect and Amazon can/does lose seller’s inventory (without reimbursing the seller either). You might be losing inventory and money without even knowing it - so it is important to keep track of all of your inventory outside of Amazon and that’s where Master Book Flippers comes in. Entire businesses have been created to help Amazon sellers get funds from Amazon because Amazon has lost their inventory; simply google “amazon reimbursement companies” to see what we mean.

Conclusion:

The Online Book Arbitrage Amazon business model, using the right software, can be one of the most rewarding Amazon business models out there. It's especially helpful if you have a better understanding of exactly what is involved in all aspects of running a successful business. We hope you now have a better understanding, through the 5 pillars mentioned in this article, of the actual work involved and how to navigate it.

To learn more you can try our service 100% free and also download our free quick start guide.