A lot of people are drawn to selling books because of the freedom it provides. You get to be your own boss, set your own hours and do business the way you see fit. However, the fact that there is no one to impose rules on you doesn’t mean that there are no rules and anything goes. If you want to be successful at selling books it’s important to set up rules for yourself, to have a coherent strategy. Otherwise, as much as you love the freedom of being a bookseller, you may not be one for very long.
One very useful tool for building a strategy is Amazon’s Sales Rank. If you’re not familiar with Sales Rank, it’s basically a measure of how high sales are on Amazon for a given book. A lower number means higher sales so for instance, a book with a Sales Rank of 1,000 might sell 100 copies a week, while a book with a sales rank of 500,000 might sell only one copy a week.
You can make good use of this information when you are developing a strategy for the books you add to your inventory. You can set down a boundary and say “I will only buy books that have a page rank under x number” (remembering of course that lower number s are actually better, just like it’s better to get 1st place than it is to get 128th).
Let me illustrate the importance of having a strategy like this with three different real-life examples. I’ve briefly mentioned that I have helped other booksellers to set up their own businesses. However, as time as progressed, they’ve each decided to run their business in their own distinct way.
The first bookseller has really benefited from having a sales rank based strategy. He would buy anything she could make money on that had a sales rank under 100,000. If he could buy a book for a quarter and sell it for $1.50, he’d buy it. He was very aware of exactly what he was adding to his inventory, and his strategy was heavily based on sales rank, along with the ability to make money on a given book. It worked well for him. He had a very fast inventory turn. He didn’t have more than a couple thousand books at a time, and he’d sell a couple thousand books a month, meaning he turned his entire inventory about once a month.
The second bookseller also had a sales rank strategy. She would buy books with sales ranks under 250,000, where she could make money. She was more aggressive in buying books with a higher sales rank (slower selling books) than the first seller. Nevertheless, she did take sales rank into account. Her inventory level would hover between 1,000 and 1,500 books and had a 60-90 day inventory, meaning she turned her whole inventory every two to three months.
Then there’s the third seller. This guy has no buying strategy. At all. He doesn’t take sales rank into consideration, and he wonders why he has a lot of dead inventory. He also doesn’t want to cull, and so he’s stuck with a bunch of books that are never going to sell. He hasn’t taken my advice and gotten rid of them. He’s stubborn and doesn’t want to take a loss on anything he’s bought. Between not having a buying strategy and refusing to cull, his dead inventory is really weighing him down. No surprise, his business is doing horribly. The last time I talked to him he said that he had sold 5 books the day before.
Are you starting to get the picture? Having a solid buying strategy has a huge impact on your ability to make a profit. Which of the three booksellers do you want to be? Do yourself a favor, and figure out how sale rank to benefit you. Iif you don’t already use it to determine what you buy, now would be a great time to start.
Tags: amazon.com, sales rank
Very interesting article. If you want to track Amazon sales rank over time, you should check out http://www.MetricJunkie.com -you can track up to 10 books for free.
It would be interesting to know the average sales price for these sellers and their average margin.
In the first case this seller turns over 2000 books per month. He would then need to aquire and list 66 books per day. That’s a lot of hustle. I’m not sure I see just how that could be done by one person, so now, perhaps, we’re looking at employee cost in the overhead.
Having slower moving books in your inventory has an advantage. My wife and I list an average of 40 to 60 books and other media (like DVD’s) per day. Since some of my purchases involve quantities of a single title (10 to 50 or more) our daily average listing can be much higher.
Out of each days’ listings some will sell immediately. Others in the next few weeks. Some will take much longer. Over time we’ve built up an inventory of over 11,500 titles and 35,000 copies. I have back-log that sells every day. And, yes, we do cull.
One of the major books on selling books online says that to make a decent living at this you need to have 40,000 books (which I believe he means as single titles) online.
Thank you for this resource. Although I have used Amazon for other information, I have never noticed this ranking system. In the future, I will use it!!
Sales rank is a good tool, but I would not hesitate to buy a book with a 1,000,000 rank or even no sales rank depending on how many titles are listed, the subject matter of the book, and the amount of money I think I can get for the title. I’d be happy to sell 5 books a day at 100.00, rather than slave away mailing out 100 at 5.00.