Profits Everywhere

The ability to sell lots of good quality very cheaply sourced books and to turn them over for profit just makes sense.

“There are so many opportunities out there when you take a peak outside the box.” ~ Unknown

One of the areas of growing interest in book arbitrage is local sourcing. By that I mean, attending local thrift bookstores, library sales, college campuses & book fairs etc. and picking up books for $0.50c – $1.00 and selling them online for $12.00-$15.00 in a lot of cases & for $80.00-$100.00 in fewer instances but those are still available.

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The profit margin on the smaller priced books in themselves (in small volume) are not earth shattering after fees etc, however from a business ROI standpoint are still pretty healthy.

As discussed in previous blogs, to date some of the main reasons US based Book Arb business owners local sourced was for the benefit of feedback which is incredibly valuable in your health score but also for the benefit of velocity of sales.

In short, a busy store brings more customers. Amazon rewards busy stores with more customers.

The ability to sell lots of good quality very cheaply sourced books and to turn them over for profit just makes sense. Increasingly some Book Arbers in (and outside) our community are specializing in this model as way of creating compounding sales and profits.

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It’s a question of volume with locally sourced books but you get the picture. Truckloads of good quality cheap books sold quickly and easily every day doesn’t take long to grow into a big operation and big success.

Our US Book Arb community have the ability to physically local source, very inexpensively, adding this wing to their business. They store the books at home then when sold they pick & pack and ship the books to the customers themselves saving costs & making money.

Obviously there is more effort off-line with this model in the U.S. but this too can be outsourced & automated over time which is another huge benefit to the book business.

“Always think outside the box and embrace opportunities that appear, wherever they might be.” — Lakshmi Mittal, Chairman & CEO of ArcelorMittal

Even we as internationals who cannot physically local source are working on ways of benefiting from this avenue of income because of the ability to automate it.

We are members of a team of international sellers (from our Book Arb community) who are actively working on cost effective ways to add this structure to our business.

Initially we didn’t focus on local sourcing as a form of additional income that was feasible for us. Now we realise the potential in it for our business especially as it is something that we can set up once and then enjoy automated profits and sales on a continuing basis.

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As internationals we have even tighter margins involved in local sourcing (they’re already pretty tight). We have additional costs of paying locals to find the books for us, the warehouse costs to store the books then the pick & pack fees when the books sell.

However, this method once set up will be hands off for us which is a huge benefit. We love automation, it’s automatic, hands free success……

“If opportunity doesn’t knock, build a door.” ~ Milton Berle

In the next blog I will discuss the benefits of being mentored by the best in the Book Arb business & why it’s so important to continue learning and growing.

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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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Compounding Money

If you think of a business expanding 8 fold in 7 months in its first year of business it’s pretty unbelievable and it is growing because we are rolling all our profits back in. The bigger the inventory the greater the speed of expansion and the more powerful effect of compounding.

“The smallest good act today is the capture of a strategic point from which, a few months later, you may be able to go on to victories you never dreamed of.”   ~ C.S. Lewis

At the time of my writing this blog we are over half way through our current peak season for textbooks. As I have stated before, textbooks sell all year round it’s just that there are 2 big bumper seasons (January & August) and one mini one (May) as well. It’s like Christmas comes three times a year in terms of a sales boost which is pretty awesome.2018 08 30th Sales Screenshot

 

As you can see creating over $2,000 a week is a substantial boost in profits and that figure will only continue to rise.

For our first textbook season we had an inventory of 54 books and sold 22, so nearly half our inventory. Roll on 7 months later and we have an inventory of 400 books which is almost 8 times the number of books we had in January and we are making weekly sales of $2,000 and more. Remember too that we have been selling books nearly every day in between.

If you think of a business expanding 8 fold in 7 months in its first year of business it’s pretty unbelievable and it is growing because we are rolling all our profits back in. The bigger the inventory the greater the speed of expansion and the more powerful effect of compounding.

If we were to open any well known franchise for any other kind of business we would never have been able to begin with just $1,000 and create this level of success (one of our community members started with $100 in the pot and has grown that into a multiple 5 figure business in 18 months or less). Not to mention we don’t have to deal with the hassles that come with running that kind of operation (franchise) with employees, insurance etc.

So, we are growing our own business that we can do from anywhere in the world. Our business is growing in a predictable and powerful way. We are continuously honing our  skills for working smarter and not harder. We are becoming wealthier.

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Our money works for us all day every day. The boost we get from sales in textbook season further accelerates our book buying power and therefore book profits so by the next peak season we will be hitting even juicier numbers. What’s not to love?

Next, I will share the value of great customer service and how that adds to our bottom line personally and professionally.

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