Sell Books Blog

**DISCLAIMER** The following is based on my own experience, yours may vary. I am not claiming to provide professional financial advice, legal advice, or tax advice. Find out for yourself what the laws are where you live, and consult a professional before making important decisions.

Sales tax can be a sticky subject in the world of online bookselling. If you sell on Amazon, you’ve agreed to Amazon’s Participation Agreement (whether you know it or not). One of the terms of that agreement reads as follows:

Sales, Use, or Similar Taxes. You agree that it is the Seller’s responsibility to determine whether sales, use, or similar taxes apply to the transactions and to collect, report, and remit the correct tax to the appropriate tax authority. You also agree that Amazon is not obligated to determine whether sales, use, or similar taxes apply and is not responsible to collect, report, or remit any sales, use, or similar taxes arising from any transaction.

Basically this means that Amazon will not collect taxes for you. There is also no mechanism for you to collect taxes through Amazon. This means that whatever taxes you owe, you have to take directly out of your profit. In my opinion, since Amazon is the one collecting payment, they should really should be the one to collect the taxes. But the fact of the matter is that they don’t.

The good news is that for now, sales tax generally only applies to sales made within your state. I have heard rumblings that in the future internet sales tax could apply to all states, collected either by the state or even federal government.

If you look around on sellers’ forums you’ll find people doing all kinds of armchair lawyering, talking about this loophole or that loophole. For example, I’ve seen people claiming that you don’t have to pay taxes on Amazon sales in a certain state because Amazon is considered a “virtual consignment shop”. Be smart. Don’t take legal advice from anonymous people on the internet. They won’t be there to turn to when the taxman comes knocking. Find out for yourself what the laws are in your state. If you think you don’t have to pay taxes for any reason, you’d better get it directly from the government and you’d better get it in writing.

I also hear about sellers who just try to “fly under the radar”, not paying sales tax, not reporting their income when they know full well that they are legally obligated to do so. Don’t do it. It’s a huge risk, and it’s just not worth it.

Personally, I pay my sales tax, and in when it comes to Amazon, I pay it out of my profit. I may not like it, but not paying is just not worth the risk. My business is a corporation, which provides certain benefits, especially since I have employees, etc. It’s works out better than being a sole proprietor, LLC, or partnership for me. I’ve made all these decisions with the assistance of professional advisers. I always consult my accountant, my attorney and my banker. They are experts. I’m not, and you probably aren’t either.

One unavoidable challenge of selling used books is figuring out just how exactly you’re going to store them all. When you’re first starting out, you’ll probably have them in your home. Be careful where you keep them. It’s not necessarily a bad idea to store your books in your garage, for instance, at least as a temporary measure. If you do, however, beware of moisture. The same goes if you rent a public storage space. Moisture is your enemy, it will damage your books and destroy your profitability. But regardless of whether you’re operating out of your home, a storage unit, or even if you step up to a small warehouse, you still need to decide how you’re going to store your books within that space. I’m talking, of course, about shelving.

Shelving is an interesting problem in and of itself. There are a number of ways you can go, some better than others.

Dorm Room Chic
You can always go the “cheap” route: makeshift shelving made out of cinder blocks and planks of wood. Admit it, you’ve at least considered going this route at some point in your bookselling career. I know I have. The problem, other than making your storage space look like a library built by frat boys, is that it’s actually not that cheap. Worse, it’s not that safe. Using a shelving system that actually poses a threat to your inventory is just bad business.

Mr. Handyman
Another seemingly cheap and effective option is to build your own bookcases from scratch. Again, I’ve tried it so you don’t have to. It’s time consuming and just not cost effective. I wouldn’t recommend going this route either.

Used and Abused
What could be wrong with getting cheap (or even free) used bookcases? Well, a lot actually. If you go on craigslist, you may find plenty of bookcases, but using an variety of different bookcases will bring you a variety of headaches. Bookcases with different heights, widths, number of shelves, etc. will cause you nothing but trouble in terms of organizing your inventory. Making it easy to locate your books is one of the primary functions your storage system needs to provide. Mismatched bookcases just don’t fit the bill.

Mass Production is Your Friend
An option I can recommend is pre-fab build-it-yourself jobs. Ikea’s Billy line in particular has worked well for me. They may be more expensive than other shelving you can scrounge up here and there, but they’re good for your books, and they’re good for organization, which means they’re good for your business.

Industrial Strength
If and when you get to the level of volume seller, you’re going to need something a little more heavy-duty. The majority of the books in my warehouse are stored on metal “gorilla” shelving, the kind you can get at Costco or through industrial supply companies. Truth be told, they aren’t actually as good for the books as my beloved Billy bookcases, but when you start dealing in high-volume business, you really need a high-volume solution.

Anyway, that’s the breakdown of the main options I’ve seen and/or used myself. Do you have a different take on any of the shelving options I’ve gone over here? How do you store your books?

Selling books on Amazon is just about mandatory for anyone wanting to get into online bookselling these days. You can make a lot of money there if you’re smart and you follow the rules. Amazon is in business to make money, and if allowing you to make some money along the way benefits their bottom line, they’re all for it. But never forget that it’s their playground and you have to play by their rules.

Most of the rules are in place to protect Amazon’s reputation. Amazon is the brand, they want you to be almost invisible to the customer, and that’s fine. But the second you start threatening the strength of their reputation, you become a liability and they will not hesitate to give you the boot. Don’t kid yourself; there are a billion other sellers out there climbing over each other to sell on Amazon. Amazon will not miss you. But if you can’t sell on Amazon you will miss that income.

Become familiar with “A-to-z” claims. If a buyer files one against you, you’re being accused of violating the terms of Amazon’s A-to-z guarantee, and you’d better hope you’ve dotted all your i’s and crossed all your t’s. Know the rules and follow them to the letter. I cannot stress this enough.

If you do not comply with Amazon’s condition guidelines you will lose the claim. If you list a book as “Like New” and Amazon considers it “Very Good” or “Good”, you are in the wrong. It doesn’t matter what arguments you can make for listing it as “Like New”, you will lose. Do yourself a favor and err on the side of safety, list your books’ conditions on the low side. It’s just not worth losing money or even your account over.

Similarly, if you don’t comply with Amazon’s shipping policies you will lose the claim. You need to be able to show you’ve shipped items within 2 days of purchase. There are different timeframes for standard, expedited, and international shipping. They don’t regulate how you have to ship it, you can use the post office, you can use UPS, you can have your brother-in-law drive it over in his ’83 El Camino. Amazon doesn’t care how it gets there, but it better get there on time.

I don’t mean to frighten you away from Amazon altogether. If you play by the rules you’ll be just fine, and like I said, there is definitely money to be made there. Just always keep in mind that Amazon will prioritize covering their own you-know-what.

Another example of one of the ways that Amazon protects itself is by putting a hold on funds for new sellers. This has pretty much become their standard operating procedure these days. They’ll put you on a “review” status, and you won’t get paid for up to 4-5 weeks. This is basically to weed out fly-by-night scammers who try to collect payment and never ship what they promise. It can be tough to wait out this review period, but it’s definitely worth it.

Not all of Amazon’s policies are restrictive, either. While they do put a hold on new sellers’ funds, one nice thing is that you can get paid early if you need the money. Typically you get your funds deposited every two weeks. However if for whatever reason you need the money sooner, you can request deposit of your balance before the two weeks is up. This is a nice perk not offered by others like Half or Alibris.

It may seem like a lot to remember, but I’ve really barely scratched the surface. Do you have any questions about selling books on Amazon? Let me know and I’ll try and answer them in a future post, along with more Amazon-related tips.

Buying and selling books to bookstores is something I’ve mentioned briefly before. I went over it pretty quickly though, so lets take a little bit of a deeper look into exactly why I do it and how it works.

I am fortunate to live the SF Bay Area. There’s still some bookstores left around here that will pay cash or store credit for books I bring in.

The key to the whole thing is that I know the types of books each store wants. If you know what they are looking for, you have a pretty good idea of what they will buy.

I usually take a in about 10-15 boxes at a time. Depending on the day, I’ll sell up to 25% to 30% of what I bring in. On a bad day I’ll sell maybe only about one box worth of books. Keep in mind that I bought a lot of these books dirt cheap at bag sales, so my average cost per box works out to about $10. Again, depending on the day and the store, I get up to $100-150 in trade-in credit for each box.

I then take that credit and use it to buy other books in the bookstore for “full price”. I put “full price” in quotes because since I’m paying with store credit I’m really getting quite a discount. Once again, I know what I’m looking for, and select books I know I will be able to quickly resell online.

When I do sell the “full price” books I usually make back about 1/2 the value of the store credit I paid for them, around $50-75 per box. All in all, not a bad profit on a $10 investment.

I stress that this is a method that requires a little experience and knowledge, both about what your local bookstores are looking to buy, as well as which books to invest your store credit in. It can be tough, and it’s definitely not for everyone. It’s also a method which unfortunately is not nearly as lucrative as it was even a few years ago. But I do make money this way, and it keeps me in touch with the market and helps keep my eye and mind sharp.

In part 1 of this series I talked about the math of selling books for a penny and explained the narrow profit margins that selling penny books may (or may not) make possible. Given the seemingly miserable financial outlook of penny selling, lets take a look at some of the reasons people do it anyway.

First of all there are the books listed for a penny by small, individual sellers.

Some of these are people who just can’t stand to see a perfectly good book recycled into pulp. They knowingly lose money selling their books for a penny, in exchange for the peace of mind of knowing their books have found new homes. While I can appreciate the sentiment, to me selling books is my business, and such an elaborate method of paying to recycle my books just doesn’t make any business sense.

Another group of individual penny sellers are newbies. A lot of people go on Amazon, see a bunch of books listed for a penny and decide they need to list for a penny too. They either don’t know enough about how the process works, or they just don’t do the math, but whatever the reason, they usually learn fairly quickly that they’re actually losing money.

For the big bulk sellers on the other hand, there may be other reasons that penny selling makes sense (and not just cents).

Speaking for myself, I have used penny selling in the past. I don’t right now, but who knows, I might go back to it at some point.

I can’t say for sure what other sellers’ motivation for penny selling is. Some people argue that penny selling is a good way to generate positive feedback. Others are happy with the few cents of profit they make per book. For me, penny selling isn’t about either of those things.

Penny selling makes sense to me as a means to drive people to my own website. It also makes sense when it leads to multiple sales. For example, when someone buys a penny book as well as another book from me. Amazon sends me two shipping fees, and I can ship the two books together, leaving me a more reasonable profit.

Another reason that some larger sellers might use penny selling is as a means of inventory control. As a bookseller, you need to be able to identify and remove books that have no profit potential. If books aren’t going to sell, they’re not only failing to make you money, they are actually costing you money by taking up space in your warehouse, space you are paying for, space which could be used for profitable books. Going through your inventory, pulling and disposing of the books that need to go is sometimes referred to as “culling”. Some sellers may decide that rather than having their employees go through and cull their inventory, it makes more sense to list those books for a penny. The logic is that they might make a small profit, and even if they end up losing a little money on the deal, they would have had to pay anyway, in the form of their employees’ time spent culling their inventory. I don’t subscribe to this theory myself, finding it’s better for running an efficient operation to regularly cull my inventory.

So those are the main reasons people list books for a penny. Have you ever sold penny books? Do you have a reason for doing so other than the ones listed here? Please let me know, I’d love to hear from you.

One of the most common questions new sellers have is “Why are there so many books listed on Amazon for a penny? How can people make money selling books for one cent???”

Well, they can and they can’t. The truth is that when a customer buys a “penny” book, they’re really paying the one cent plus $3.99 shipping. Amazon collects the $4, deducts their fees, and gives the remainder of the shipping fee to the seller to ship the book. Let’s look at an example, just to make things clearer.

Let’s say I list a book for a penny. Joe Blow in Nowheresville, Il purchases it and pays Amazon the $0.01+$3.99

From that $4.00 Amazon deducts $1.35 as a “closing cost” ($4.00-$1.35=$2.65)

I have an Amazon Pro Merchant account and am therefore exempt from Amazon’s usual additional $0.99 fee.

Amazon gives me $2.65

Assuming I can package and ship the book for less than $2.65, I have made a small profit. (Very small, actually. No more than a few cents.)

Expedited and international orders means larger shipping fees are collected, meaning a slightly higher profit margin. Larger sellers can also save even more if they use bulk rate shipping.

It should be noted that even if you are a Pro Merchant and don’t have to pay the .99 fee, it costs $40 a month for the Pro Merchant account. So even if you sell a couple dozen penny books, if your monthly profit doesn’t exceed $40, you’re still losing money on the deal.

Some people go so far as to use improvised packaging materials, shipping their books wrapped in butcher paper, or even cut-up paper grocery bags.

No matter how far people go to try and squeeze a few extra cents out of selling a penny book, the bottom line is that there’s just no profit in it for non-bulk sellers/shippers, and not much profit even if you do deal in bulk.

For this reason, it seems like traditional penny sellers, those who just try and eke out a few cents of profit per book, even they are moving away from literally selling books for a penny.

Still, there are plenty of books listed for a penny. In Part 2 I’ll discuss some of the different reasons books get listed for a penny, both by small, individual sellers and by larger bulk sellers.

If you are serious about selling used books, you don’t want to limit yourself by only listing on a single marketplace. On the other hand, creating individual listings on all the different marketplaces, Amazon, Ebay, Abebooks, etc., can be very time consuming. The best solution I have found is to use Inventory Management Tools which allow you to list across multiple marketplaces simultaneously. Here’s a breakdown of some of the major players in that space:

Fillz
Site: www.fillz.com
I currently use Fillz, and they seem to have become the leader of the pack when it comes to inventory management. Fillz can be a little difficult to get used to at first, and because of thie they actually may be changing their interface, but I really hope they don’t. Once you’ve gotten to know a little bit about how to navigate the service and understand how it works, it’s actually very logically set up and utilitarian. Fillz is a web-based tool, an example of what’s known as “cloud computing”. In other words, their service exists entirely online, as opposed to you having to actually download a program and install it on your machine. They support all the major marketplaces. Also, they’re now an Amazon company, which may bring with it certain advantages in the future.

Monsoon
Site: www.monsoonworks.com
I have used Monsoon in the the past, and didn’t have a great experience. I was signed up by a sales rep who didn’t fully disclose their fees. It was only after I decided to leave that they offered to change their fee structure because I was a volume seller. Unlike Fillz, you download install Monsoon, and it exists locally on your own computer, which some people prefer. More on that later.

Indaba
Site: www.goindaba.com
Indaba is essentially modeled after Monsoon. I contacted them back in 2006, but never got a reply. Back then they were going through some tech issues. Since then it looks like they’ve gotten themselves together fixed their issues.

The Art of Books
Site: www.theartofbooks.com
Just as Indaba is modeled after Monsoon, The Art of Books is modeled after Fillz. They also provide their service on the web, or in the “cloud”. I contacted them and they never got back to me. At the time they did not support the all marketplaces as I understand they do now. I’m not sure how well they can handle large volume, but I’ve heard positive reviews.

Basically, the choice seems to be between the Fillz, web-based model and the locally-installed Monsoon model. The cloud-based solutions cost less, whereas the locally installed solutions provide a greater sense of security. Web-based tools also leave you at the mercy of your connection speed. Those who take issue with the web-based model alsoe usually point to concerns about their data residing elsewhere. They worry about their data being hacked, misused, stolen or worse, lost. There is a certain amount of validity to those concerns, however any smart business owner will have their data backed up somehow, no matter what kind of tool they use.

In any case, judging by what I’ve seen, the marketplace has pretty much spoken and cloud computing seems to be the solution of choice. What do you think? Do you use an inventory management solution? Which one?

In last week’s 2 part series, “Selling Books Starts With Buying Books” I talked about library sales and how they are one of the go-to sources for finding books to sell. However, what I realized is that if you’re new to bookselling, it doesn’t do you a lot of good to know libary sales are a good resource if you don’t know how to find them. So here’s couple of tips on finding library sales:

A great resource for finding library sales in your area is booksalefinder.com. You can select your region and see all the upcoming book sales near you.

The site provides a valuable service which is free both to those listing sales and those looking for sales. I remember going on the site back in 2000, when there were relatively few ads posted on the site. Those days are long gone; it’s now full of ads. Don’t let that put you off though, because advertising is how the site remains a free service. Also, some of the advertising points you to some of the resources that are available to help you as a bookseller.

There’s a lot of good info on the site, but of course, despite it being free, not every sale will be posted on the booksalefinder. The only really foolproof way to find out about library sales is to just go down to your local library and ask. They will be more than happy to tell you about any upcoming sales.

In talking about buying used books, and explaining why it is that I’m sharing information about selling books, I’ve already mentioned “scanners” and “scanner people” a couple of times, which to some of you out there may beg the question “Just what the heck is a ‘scanner’ anyway?”

To understand scanners, you first have to understand lookup services. There are a number of services out there, ScoutPal, ASellerTool, MediaScouter, etc. who (for a fee of course) give you access to the current listing price of books. Amazon lookup is pretty much the standard, but some are starting to expand into other marketplaces as well. In addition, some companies that offer Inventory Sales Management throw in lookup service for free.

No matter who’s providing it, lookup services work in one of two ways: they either let you request and receive prices in real time, or they provide a download of all the latest prices at once. Of the two, the download variety is the more efficient, letting you look up more prices in a shorter amount of time, especially if you are using a scanner.

A scanner is basically a barcode scanning device attached to a handheld computer of some kind, usually a cell phone, smart phone or PDA. It cross-references the book’s barcode against the lookup service’s data and displays the price of the book. Say you are a brand new bookseller and you walk into a thrift store that is selling used harlequin romance novels. Even if you’re completely unfamiliar with the books, you can pull out your scanner, scan the barcode and instantly know what price you can get for each book.

Scanners have become quite controversial lately. They have become something a necessity for new booksellers, or booksellers who haven’t developed an eye for what books they will be able to sell for a profit. There’s nothing wrong with this, in and of itself. The problem comes when enthusiastic sellers, armed with scanners show up to library sales or other events, grab books by the armload or suitcase-full take them off to a corner and scan them all, leaving their discards all over the place. Unfortunately this has become all too common, and there has been a recent backlash against scanners, with some library sales considering strong restrictions on scanners or banning them altogether.

I am fairly neutral on the issue. As far as I am concerned scanners are a tool which can be used in a responsible way just as easily as it can be used in a disruptive and inconsiderate way.

I myself have used scanners in the past. I used ScoutPal and BookHero, mostly because they were some of the first services on the scene. I’ve used a couple since then too. I don’t use scanners at all any more, however. I find that there’s really just no benefit in it for me. I have been in the game long enough to have developed a tool faster and more powerful than any scanner: my eyes. I can look at a book and have a good idea of whether I’ll be able to make money on it, and how much.

To scan or not to scan, that is the question. If you’re new to the business of selling used books, by all means, go ahead and use a scanner (and I would recommend using a download service). It may be a great help to you. But if you’re serious about making this a career, I cannot stress how important it is to invest the time and energy into developing your knowledge of books and cultivating the ability to recognize their value.

You need to buy books to sell books. You have to pay cash for books to get cash for books. There’s no two ways around it. In Part 1 of this guide I discussed buying books from libraries, bookstores, remainder dealers, and thrift stores. Now let’s look at some of the other resources experienced booksellers use to build and maintain their inventory.

Estate Sales
This is where you will find a lot of the old school Book Scouts practicing their craft. Estate sales are not about “scannable” books. Here you’re looking for real quality, rarer books, older books. Estate sales have become very competitive. There will be expert book buyers with years of experience and keen eyes, as well as not-so-experts playing the numbers game buying up just about anything. Do not be afraid to make a mistake. Even if you end up buying books you can’t get much money for, books that perhaps aren’t as valuable as you might have thought, it isn’t a really a loss. What you’ve actually done is spent a little money to learn a valuable lesson that will benefit you over the long term. Keep in mind that you aren’t only a book buyer, but also student, investing in your own experience and knowledge.

EBay
There are good opportunities on EBay, especially if you specialize in collectable books. You can find people who sell used books by the lot. In fact, I’m one of them. I sell wholesale on eBay all the time. It’s a win-win situation. I get to move inventory without having to find individual customers, and you get a good price on books you can turn around and sell yourself.

Yard Sales
Yard sales and garage sales are a still a largely untapped resource, and for a good reason: it’s hard. Just finding the ones that actually have books can present something of a challenge. I suggest that if you spend time going to yard sales, do what I do. When I go to yard sales I’m not just there to buy books, I’m also buying ham radio equipment, old electronics, old documents and papers, etc. If there’s anything you have a little expertise in, invest in that too. If you don’t know much about other collectibles, find something that interests you and spend a little time and learn about it. It will make going to yard sales worth your while.

Classified Ads
I can’t speak from experience about using newspaper ads. However, there is a colleague of mine who often goes to different shows in different cities. Before he goes he always takes out an ad in the paper in his destination city saying what days he will be in town. He’s actually done very well over the years using this method.

CraigsList
The main challenge in buying books on Craigslist is that it can be difficult to sort through all the clutter. From time to time you will find that family or household which is really just trying to get rid of a bunch of books they have had sitting around for years. The catch is that you will usually it in the garage sale category rather than the book category. The book listings will generally be booksellers just like you. When you do find that quality listing, you have got to be fast. If you don’t get there in the first couple hours, it will probably be gone.

These are your best bets for steadily increasing and replenishing your inventory. If you’re serious about selling books, you’ll probably need to use some combination of most or all of them. If it all sounds like hard work, that’s because it is. Selling used books is not for everyone. It is increasingly competitive and requires a serious commitment of both time and effort. But if you are willing to put in the work, these resources can be incredibly valuable and put you well on your way to success as a bookseller.