Is it Worthwhile to Buy Books that are Only Going to Turn a Buck or Two in Profits?

Before deciding whether or not to buy a book that only has a profit potential of a dollar or two, you really need to know and understand your own business model, your break-even, and in some cases, the expected turn-around for that book.

There are some booksellers that make a very handsome living selling penny books, but they do not sell only penny books. One such bookseller that I know has 2,500,000 books in his inventory and six people that do nothing but list new books for him each day at the rate of 12,000 every day (2,000 per person). If he were to only maintain his inventory level, he would sell 84,000 books per week. If he got all his books free and sold them for a penny each I would really question his business model, $840 in profits would not be worthwhile – he couldn’t even pay his six listing employees, let alone all his other employees or himself. The reality is that he makes about $0.60 per book from postage reimbursements (my estimate). If he only made a dollar each on average for every book he sold, and sold 84,000 books per week, plus his postage profits, he would be profiting $134,400 per week. The truth is that I do not know his real margins and I wouldn’t even ask, but I can easily estimate them based on my own experience in very large random book lots, and he probably makes about $175,000 per week from his sales of books profiting only $0.01 to $1.50 each. His business model is based on low margin and high volumes using automated packaging and shipping tools.

This is not a practical option for the home-based bookseller and the time spent cleaning, packing, and shipping books from home like this will end up making you $0.15 per hour for your efforts and you will have to clean and pack around the clock. Unless you intend to invest a lot of money in automated packing systems and hire a bunch of employees, I would stay clear of the penny books and focus on the ones with higher profits.

When I go out book scouting, I consider factors other than just the expected margin for a book. If I pick up a book with an online value of $4.00 and know it will cost me $0.90 to buy it, I might consider buying it if other criteria are met. The book must have a good Amazon Sales Rank, it must be in extremely good shape requiring very little cleanup or prep work, and it also needs to be less than a pound so that the shipping reimbursement covers all packaging and shipping costs with a little margin. Ultimately it might make me $2.50 after commissions are paid. I consider this to be analogous to seeing money laying on the ground, or perhaps at the top of a stairwell. If it is worth the time to retrieve it and the risk is not high, it is probably worth climbing a few stairs to retrieve, but if the stair treads are rickety or I have to pass a few vicious Rottweilers to get a couple dollars, I am not likely to take the chance or invest my time.

Remember, the sale of 20 books that each profit you $2.00 spread out over the month will pay for your listing subscription and the rest of the books you sell define your real profits. Don’t get too carried away with stocking a lot of low margin books. It is okay to stock a few that sell quickly to cover all your direct costs, but having too many will burden you with spending a lot of time packing for little return and your shelves will quickly fill up with low margin books leaving you no room to add valuable ones when you find them.

For my own business model, I do not generally pick up books anymore that are not going to make $5 in profit. I really enjoy being an online bookseller, and I am willing to accept less per hour doing it than I would make working OT on my regular job just to be doing something different that I enjoy. However, when I am realizing less than $30 per hour for the time invested in bookselling I have to re-evaluate how much fun I am having and what my time is worth. It is difficult to justify working at anything on my own time that pays only a fraction of what I would make working some OT at my regular job. This is why I emphasize that you spend the time to determine your break-even and do some business planning, you cannot know what will work best for you if you don’t have a plan.


Post time: 04-13-2017