Return On Investment Today

Repricing (selling our books) is part of our daily work flow. When we reprice our books, it keeps our books competitive and ensures more sales, if you do it right!

If you’ve been reading this blog for a while, thank you for that, I really appreciate your time, you will have heard me mention the term ROI i.e. Return On Investment. Everyone has at least heard of ROI.

How is it then that I have been speaking about ROI and hearing about it since Day One on our Book Arb journey and only now am I really starting to apply it properly?

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It’s funny how we can think we know something and still not apply it or think we are applying it.

“There is nothing so useless as doing efficiently that which should not be done at all.” ~ Peter F Drucker

Let me explain how that plays out in Book Arb. Of course I have been familiar with the concept of buying and selling books and making a profit, I run an online bookstore after all.

However, I was applying the concept in a micro management way thinking that I was being “penny wise” i.e. looking after the profits on each book and that would take care of the overall profits.

Repricing (selling our books) is part of our daily work flow. When we reprice our books, it keeps our books competitive and ensures more sales, if you do it right!

“There seems to be some perverse human characteristic that likes to make easy things difficult.” ~ Warren Buffett

Now obviously making a profit on each book is important but because we were focused on getting as much profit out of each book individually we squandered time, momentum and compound interest.

Over the past year and half I have spent countless hours repricing our books daily. It’s part of the business and also shows Amazon, Big Daddy, that you are actively selling your stock as opposed to using Amazon as a warehouse for products that may or may not sell. This brings other benefits other than profits alone such as more exposure to more buyers thereby increasing your market share.

However, we were way too focused on holding onto our books to get a better price as opposed to selling as much stock daily for an overall ROI. We forgot to think about ROI on our overall investment monthly.

“Compound interest is the eighth wonder of the world. He who understands it, earns it…he who doesn’t, pays it.” ~ Albert Einstein

The chart below demonstrates how the same $10 compounding with only 20%, 25% & 30% profit over the course of a year way out performs holding out for a 100% profit every 8 weeks.

COMPOUNDING at 20% 25% and 30%

When I think about how much time I spent ‘nursing’ books i.e. repricing every day but not effectively I scratch my head. When I think about how much compound money I left on the table by not selling and turning over profits I am astonished.

For the record we have found that the longer our books are on the market, unless it’s a textbook season, the more inclined the price of the books are to decrease over time unless they are year round books. Hold that thought in your back pocket when repricing as it will serve you well. If you can sell for a profit today, sell.

Our strategy was ineffective on both a profitability and time wise front. Man, I didn’t really get it until recently. This business is about turning over as much inventory every month to compound the money for a staggeringly high year round ROI.

Can you see how ineffective our strategy was? We thought we were doing it right but man were we off?

Remember, it’s not about being busy, it’s about being effective. We have still made a lot of sales over the year but this one strategy slowed our progress big time.

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I would add that it’s not to say that it’s not possible to make 100% profit on most books, it’s just don’t delay holding out for it. A bird in the hand philosophy in this business will serve you much better.

It’s just all about buying the right books at the right price at the right time. When and where to look for these books and knowing how to read the Keepa charts makes this easy.

Do not be the bottle neck in your business by being ineffective. Buy and sell books every day. Compound your money by selling as much as you can as quickly as you can and you will be astonished at your progress.

Now that we have corrected our approach to repricing our profits are already increasing exponentially and we have more time back to ourselves. Repricing used to take me hours every day. Now, it takes a lot less time. Less time and more money, who knew?

Next, I will discuss the power of streamlining daily tasks & how we are doing it in our business.

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Pack A Powerful Punch

By us focusing on just 3 of the many powerful strategies in the Book Arbitrage business these small but systematically used techniques have had a powerful impact on our ongoing business.

To accelerate our profits we are following several strategies as recommended by the creators of this book arbitrage opportunity i.e. Jon Shugart and Luke Sample to great effect. Anyone in the community who follows these strategies see ongoing wonderful results too.

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“Energy and persistence conquer all things.”   ~ Benjamin Franklin ~

One of the most important strategies to ongoing profitability in book arbitrage is REPRICING. Amazon reward active accounts by exposing those books to more buyers. We reprice daily which lets Amazon know that we are actively working on selling our inventory. This way we sell more books and Amazon continue to display our bookstore to more customers.

I think of it as flinging open the doors of a brick and mortar bookstore with a banner to let our customers know that we are open for business. In addition to using Amazon’s automatic repricing software we spend some time every day manually repricing to ensure ongoing sales. Our bookstore may be virtual but our due diligence isn’t and our resulting profits are real.

Another strategy we apply is we buy our books based on RETURN ON INVESTMENT (ROI) and sell them based on the market. What I mean by that is when we purchase a book we do so based on the ROI we expect to get based on the Keepa charts e.g. 100%. However, by the time the book arrives in Amazon via the book prep centre the market can have changed somewhat so we now sell based on the current market value.

Keepa Chart Example 001
Keepa Chart Example

We do not hold out for the 100% return on investment any longer unless the market is still selling at the percentage. We immediately reprice our books to sell which could be for a profit of 60%. That’s still a whopping return. Initially, however, we made the mistake of holding on too long and waiting for the market to go back up.

This meant that instead of receiving a profit of 60% within 30 days and reinvesting that profit 2 or 3 times we held our books at a price set for 100% ROI which took in most cases 90-120 days to recoup, based on what we had originally paid for the book, and we thereby missed out on a lot more profit in the meantime.

This is an important point in this business. The market doesn’t care what you paid for the book. Sometimes, especially in the beginning with a small inventory we can become attached to our books or our return on investment figure. This slows the whole process way down.

The way to grow this business is speed of sale and reinvestment of profits. In the above example we could’ve had 180% return with the same money, had more sales i.e. profits, more activity on our account and thereby even more sales and expansion. This business is about flipping money as quickly as possible through the sale of quality lower priced books.

Having this as your premise for your business will accelerate your profitability and ensure that your financial freedom comes quickly and easily. Who doesn’t like that?

Over time it will be possible to hold out for more profits but until we are at the hundreds of thousands in sales mark, the above strategy is the most effective by far to get us there.

The third strategy that I would like to share is to regularly change the FILTER SETTINGS in the software when searching for books. There are literally millions of books available to buy on-line. Jeff Bezos, founder of Amazon recently revealed that Amazon has over 100,000,000 prime customers.

That’s our target market. So there are hundreds of millions of books and there are at least one hundred million customers available. That’s powerful supply and demand by any standards.

Book Arb Filter Results
Example: Results from 1 Filter Setting

By changing the filter settings even slightly on my search for book deals a whole new array of books are accessed. For instance, I may put books with a low ‘sales rank’ e.g. 100,000 (this means it sells really fast) and ‘price used’ between $10-$15 in the search filter. I could then change this filter setting to a sales rank of 200,000 and set the used books price at $30. This will then give me a whole new set of books in my search results to choose from. There are so many settings available and each search presents new opportunities thereby an almost endless supply of books.

“Motivation is what gets you started. Habit is what keeps you going.”   ~ Jim Rohn ~

Taking this approach to our business model ensures that we are active, dynamic and successful. With this method we are really finding that there are no limits to how successful and financially free we can become.

Next, I will discuss the power of creating a compelling emotional vision for your business. This will mean that you no longer try to get there but you are coming from there which makes all the difference.

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