by Joe Waynick
There are a lot of misconceptions about the profitability of selling books on the Internet. First, it has be understood that selling books online is not a way to “get rich quick” Far from it.
Internet bookselling requires just as much work and dedication as owning and operating a brick-and-mortar used book store. Like any other business, there are certain metrics you must understand if you want to be successful.
I want to introduce two crucial concepts that will provide a crystal clear understanding of how to estimate the potential profits of an Internet bookselling business:
- New Listing Sales
- Residual Sales
Once you understand these concepts, you’ll be able to project your sales and profits with ease. In this article, we’re going to tackle New Listing Sales. We’ll cover Residual Sales in Part 2.
New Listing Sales”
Mathematically, when you sell books online, you can be certain that a fix percentage will sell within 30 days out the total number of books you list each month. This is called New Listing Sales.
The rate of New Listing Sales you achieve is dependent upon your listing criteria and the availability quality inventory you have to work with. For example, if you have a plentiful supply of book in good to like new condition, and with Amazon sales ranks below one million, you can pretty much count on at least 33% of your books to sell within 30 days of their initial listing date.
Therefore, if you list 100 books every single day, within 30 days you’ll find that you’ve sold at least 33 of those books, leaving you 67 remaining in your inventory. If the average revenue per sale is $14 per book, you can reasonably expect to gross $462 per day for your efforts! That’s a gross monthly revenue of nearly $14,000.
These are not pie in the sky numbers. These are actual sales figures from my Internet bookselling business that I’ve operated since 2006.
Of course, you need to subtract your marketplace fees (commission and closing fee), Cost of Goods Sold, shipping supplies (bubble mailers and/or boxes), postage, transportation (gasoline, oil changes, automobile maintenance), and labor. (Always include estimates for labor, even if you don’t have employees. You never want to fall into the trap of working for free.)
If you’re working out of your home, that’s pretty much it. If you’re working from a storefront or warehouse, you’ll have additional expenses such as rent, electricity, telephone, and Internet access to cover.
What’s Your Profit?
Calculating your potential profit margin is relatively simple from here. Lets use the following assumptions:
| Revenue | ||
| Average Sale | $10.00 | |
| Average Shipping Credit | + 4.00 | |
| Total Revenue | $14.00 | |
| Expenses | ||
| Marketplace Fees | $2.85 | |
| Average COGS | 2.00 | |
| Average Postage | 2.75 | |
| Mailing Supplies | .35 | |
| Labor ($20/hr) | +1.33 | |
| Total Expenses | $9.28 | |
| Gross Profit | $4.72 |
As you can see, based on the above assumptions, you can earn a respectable 34% profit on each sale. If you’re operating your business from home, this is an excellent profit margin.
If you’re the current owner of an existing physical bookstore, again, the additional profits will be a welcomed addition to your overall profit picture.
Notice I didn’t include transportation cost in the above expenses. That’s because those costs are highly variable and you’ll need to factor those in according to actual expenses divided by the number of books you purchase each day.
Good hunting!
For more free articles about selling used books online for profit, visit: http://
www.internetbookselling.com
Joe Waynick is author of “Internet Bookselling Made Easy! How to Earn a Living
Selling Used Books Online” (ISBN 978-0983129608). You can contact him at: http://
www.internetbookselling.com/contact.html.
Hi Joe,
I have certainly make some good sales selling books on Amazon. While I don’t do it for a living or anything, I’ve done it when I’ve needed some extra money. There’s always someone looking for your book, especially if it’s cheaper than a new book.
I’ve tried selling books on eBay and am less successful than I am on Amazon.
Great tips!
Hello Morgan;
The best way to sell books on eBay is when they are part of a set. It’s very difficult to make a profit selling individual books there.
For example, I’ve found that sets of the classic “American Girl” series sell well on eBay when they’re bundled in groups of six to ten different titles in each auction.
The number of sets that can be created is almost endless. Try reviewing completed auctions to get a feel for what’s possible.
Good hunting!
Looking at completed auctions regularly is a great tip Joe. I used to create a search for books that have sold for over $75 with at least 3 bids (showing some interest) and see what was completed successfully. This is how I discovered The 16th Round (The Hurricane). I’ve since found 4 copies in various bookshops selling for $10 and have sold all four on eBay for between $60 and $115.
I just had a bad experience as a new seller on Amazon. I wanted to see how the process worked so I listed a few books under what I thought was a free trial period. I was royally excited because my newly purchased wholesale books sold very quickly. What I quickly learned, was that Amazon Fullfillment fees, merchant fees and commission fees took whatever profit I made.
On a positive note, Amazon is working with me to resolve the issue.
Jack;
I’m not sure why you had a bad experience. You already know in advance what fees will be charged. Consequently, you must price your books at profitable levels.
If you low ball the market, you can easily lose money. There are no free trial marketplaces. Once a book sells, the marketplace will deduct its fees from the proceeds of the sale.
Please revisit the article and familiarize yourself with the various fees so you can price accordingly in the future. I hope this helps.
Good hunting.
Joe Waynick, author
Internet Bookselling Made Easy! How to Earn a Living Selling Used Books Online
Bookseller Resources: http://www.InternetBookselling.com
Follow me on Twitter at: http://twitter.com/joewaynick