For those rock-dwellers out there, the kindle is Amazon’s handheld device for reading e-books and other electronic media. Since the original Kindle came out in late 2007, two new versions, the Kindle 2 and Kindle DX, have already been released.

The Kindle isn’t the first attempt to replace paper books with digital counterparts, but it has certainly been the most talked-about and the most successful. Amazon has even developed a “Kindle for iPhone” app.

So should we all be looking for a new line of work? Is the paper book destined to go the way of the dodo? Will the Kindle kill the used book business?

No.

The first video ever broadcast on MTV, way back in 1981, was a song called “Video killed the Radio Star”. Only it didn’t. Turn on your radio and you’ll still find news, music, politics, advice and more up and down the dial. Video may have killed radio serials like The Lone Ranger and The Green Hornet, but that’s about it.

The same principle holds true for the Kindle. Sure it may absorb part of the reading market, but what part do you think that will be?

I’ts going to be the casual buyers who read for entertainment. In other words, mass-market paperbacks, the books that aren’t worth trying to resell anyway. Buyers looking for specific non-fiction, textbooks, modern first editions and most of the other kinds of books you can actually make money on will still be in demand.

Besides that, the Kindle is still way too expensive to gain wide adoption. The Kindle DX sells for $489.00. That’s almost five hundred dollars! Way too much for most people to shell out, especially in this economy. Those who can just drop that kind of money on it are going to be those who are pretty well off, and were probably never looking for deals on used books in the first place.

There’s also a bunch of technical issues that Amazon is going to have to iron out. For one thing, the light text and poor contrast ratio on the Kindle 2 have led to complaints of eye strain and headaches. This is really a developing technology sector. Who knows how long it will take to fine tune the concept to fit the needs of the average consumer. The Kindle may be the clunky, expensive Laserdisc to the streamlined and affordable dvd and blu-ray formats of future digital books.

The bottom line is that books aren’t going anywhere any times soon, especially used books, and especially the kind of used books that you really want to be selling in the first place. So don’t go filling out employment applications at Starbucks just yet. After all, if video killed the radio star, why doesn’t MTV ever play music videos anymore?

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UPDATE:

Here’s a site worth checking out. Their name pretty much says it all, it’s a site where you can sell used books: sellusedbooks.com

In this case, the violation had to do with my confirmation emails. I am in the practice of sending out an email whenever I ship a book, just to let the customer know that their books are on their way. It’s good customer service and doesn’t take much time once you develop a boilerplate message to send out. The issue was that in the signature of my email was the URL of my own website.

Now, these emails are only sent after the transaction is complete. I would never try and divert a customer from buying a book I had listed on Amazon to buy it from my own site instead. That is pretty much Amazon’s cardinal sin and if you get caught doing it, you can pretty much expect instant expulsion. The way I justified what I was doing was that the customer had already bought the book and Amazon had already got their cut. What was wrong with letting the customer know I also had an independent site after the sale was complete?

A lot.

You might think that what goes on between you and the customer is none of Amazon’s business. After all, their Participation Agreement makes Amazon’s role pretty clear:

“Amazon provides a platform for third-party sellers (”Sellers”) and buyers (”Buyers”) to negotiate and complete transactions. Amazon is not involved in the actual transaction between Sellers and Buyers and is not the agent of and has no authority for either for any purpose.”

You might think that but you’d be wrong. Here’s the thing, you’re entitled to interpret Amazon’s policies any way you want, but they have their own interpretation. Only one of the two interpretations counts. Guess which one? I’ll give you a hint: it’s not yours.

Amazon’s interpretation of their rules is that at no point during the process, before, during or after the sale, can you do anything that might be seen as diverting customers away from Amazon to somewhere else, such as your own site. I could have argued my point, tried to fight them on it.

But I didn’t.

Whether you’re right, wrong or indifferent, it does not pay to get cute with Amazon. If you are ever contacted by them regarding a violation, I highly recommend you do exactly what I did.

First of all, I stopped doing it. No more URLs in the emails.

Second, I spoke to someone at Amazon on the phone to confirm that I was now in compliance with their policies and standards. Amazon has a feature in their help section where you can request to have someone call you. It works like a charm.

Finally, after I got off the phone I sent an email to Amazon in which I referenced the phone call. I suggest you always call AND email, that way if there is discrepancy later on, you have some kind of record of the resolution of the issue.

Don’t try to take on Amazon. They will win. Play by the rules, and if they call you on something, fix it and then make absolutely sure they know you fixed it. Do that and everybody wins, and everybody gets to keep making money, including you.

I’ve also warned you about taking on Amazon. Amazon is an 800 lb gorilla, and pretty much nobody is going to make it do anything it doesn’t want to. Some state lawmakers just learned that the hard way.

In an article published yesterday in the Wall Street Journal, Geoffery A. Fowler reports that Amazon has “ended its business relationships with marketing affiliates in Rhode Island so the online retailer could avoid collecting sales tax in the state.”

Rhode Island, like many other states, is facing a massive budget crisis. One solution that they came up with was to pass a bill requiring any businesses who have online marketing affiliates in the state to collect sales taxes. This isn’t the first state to try this tactic to generate revenue, New York passed a similar law last year.

When North Carolina seemed poised to do the same last week, Amazon cut its ties to all of its North Carolina affiliates. The same thing happened yesterday with Rhode Island affiliates, with Amazon again dropping them before the bill had even been signed into law by the governor.

Now, to be perfectly clear, this doesn’t directly effect us as sellers. Affiliates are businesses who get a sales commission for linking out to other sites. However, this goes to show how far Amazon will go to keep doing things they way they do things.

I for one think that Amazon should be the one to collect taxes for us as sellers, but I’m really not holding my breath. Amazon has shown it is unafraid to tangle with the government, not to mention the advantages of its sheer size.

The Rhode Island legislature was hoping to generate additional funds but, according to the WSJ article, the net result of all this was to hurt “2,000 online affiliates in Rhode Island, who pay about $3 million in state income tax.” In other words, they are going to end up losing tax revenue, rather than gaining it, because the affiliates will now be making less money, and therefore paying less income tax.

Rhode Island went up against Amazon, and they lost. Let that be a lesson to us all.

You can read the complete Wall Street Journal article here.

It’s simple. Just find 100 books that you can sell for $10 each.

Still sounds impossible? Here’s a true story:

Back in 1999, I was still working for a high tech company, but I was already involved in selling online in my free time. Back then, Craigslist wasn’t really as well known, and I used to find a lot of great stuff there to resell on Ebay.

One particular time, I had just acquired 25 books from a craigslist posting, when I got a very interesting email. It was one of your standard spammy-type emails, you know the kind, it said something like ““make x number of dollars by selling the items you’ve purchased from Amazon.” That email was what first led me to create a seller account on Amazon.

I listed those 25 books on Amazon and the very next day had 7 sales. I made about $150 on those 7 books. That’s when I really knew that this was a good way to make some money.

As you could guess, I was able to acquire unwanted books from my fellow employees and pickings from other sources were very good.

Now, I didn’t make $1000 in 7 days that first week. But I know if you were determined and really concentrated on it you could do it.

Back then it was pretty much trial and error, but now there are resources like this blog that can bring you up to speed with sellers like me who have been at it for ten years. I’ve told you everything from where to find books to how to avoid running afoul of Amazon.

Granted, the book selling environment is a little different than it was ten years ago. But honestly, it isn’t outside realm of possibility that by going to thrift stores, garage sales, library sales, etc., you could make $1,000 in 7 days.

All you need to do is find a hundred books you can sell for ten bucks each, or two hundred you can sell for five, etc.
It’s possible. Use the resources on this blog, and if you have any other questions at all, leave a comment on this post and I’ll try and answer it in an upcoming post.

Basically, auto repricing is done through applications which are hosted either on your desktop or remotely on the web. You set up rules for a group of listings, and the software automatically reprices your listing based on listings by other sellers. For instance, you can set it to take the lowest price for a book and either do a price match, set the price slightly higher than that price, etc. Some sellers even set the rules to set the price lower than their lowest competitor but that, in my humble opinion, is just plain stupid. You can also set up more advanced rules, for example, you can set them up to base the reprice off of the third lowest price, rather than the lowest, or set them to match condition, etc.

I’ve used a few different repricing applications over the years. There’s some overlap with the companies I talked about in the post about inventory management tools.

Seller Engine
Site: www.sellerengine.com
I used Seller Engine early on (between 2003 and 2005). At the time, it was the best out there, but these days there are a lot more vendors to choose from. Seller Engine was great for me in that it gave me a the ability to scale and grow. Ultimately though, I decided that I needed to make a change. I got to a certain size and I just outgrew it. I needed something with a bit more flexibility.

Monsoon
Site: www.monsoonworks.com
When I used Monsoon, the main problem I had with their repricing service is that it didn’t offer a lot of flexibility. However, that was a while back, and things may have changed since then.

FillZ
Site: www.fillz.com
The great thing about FillZ is their flexibility. You can write your own script, set up any rules you want as to how to reprice.

This is just a very basic overview of how automatic repricing works and some of the services I’ve used. In part 2, I’ll go a little more into the “how” and “why” of repricing. Then in part 3, I’ll talk about how Amazon changed everything with consolidated SKU’s.

Selling on Amazon is not the same as selling on Ebay.

Learn it, love it, live it.

As I’ve discussed in a previous post, Amazon is a stickler for their rules. It’s easy to understand why, once you realize that, unlike Ebay for instance, they are on the hook to the customer should anything go wrong. I’ve said it before, and I’ll say it again: know the rules. It’ll save you from having to deal with headaches and consequenses up to and including losing your Amazon account.

Here’s a few ways that Amazon is different than Ebay:

Multiple Accounts

On Ebay, a lot of people will recommend that you have different accounts for different things. Ebay doesn’t care how many accounts you have. You can have as many accounts as you can open free checking accounts and email addresses. As far as Ebay is concerned, you can have an account for every day of the month and another one for holidays and special occasions. Amazon is different. You cannot have more than one Marketplace Seller account. Not only do they have a policy against multiple accounts, they actually check. They have several ways of trying to find people skirting this rule, and if you get caught, you could be looking at being permanently banned from Amazon.

That being said, you may see some sellers that do have more than one account. There are some megasellers who get exceptions to the rules. This doesn’t mean you can do it. They have special approval from Amazon. You don’t. Often times these different accounts represent separate locations, separate operations, completely different segments of a corporate structure, etc. The point is, it doesn’t apply to you.

Returns

On Ebay, you’re the selling company and you get to set up whatever kind of return policy you want. A better return policy may make you more successful, but ultimately it’s up to you. Once again, Amazon is different. Amazon considers you to be little more than a dropshipper. From their point of view, they are the public face, the company, and they will set the return policy. Read the rules here. The bottom line is that you’re probably going to have to take any returns made within 30 days. You’re free to take returns beyond that 30-day window, if you so choose, but you cannot have a shorter return window. Personally, I’ve been contacted by Amazon to issue a return on a sale that was 40 days old. I refunded the order. It’s just not worth it to take on Amazon on these issues. Don’t take my word for it though, read and learn the rules in their entirety for yourself.

Blocking Buyers

You can’t. On Ebay you can create “blocked bidder” lists to weed out any undesirables. Not on Amazon. As long as their money is green, Amazon wants them as a customer. This goes for anyone who’s considered a “domestic” customer, including APO/AFO, Hawaii, Alaska, Puerto Rico and Guam. You can opt not to ship internationally, but that’s about it. Some sellers that specialize in selling used textbooks complain that certain buyers are actually other sellers who turn around and resell their books to students or textbook stores. Well, tough. There’s no way to block any buyer from buying any book. And as far as I’m concerned, if someone is reselling the books you’re selling, there’s no point in getting mad at them. It’s your own fault for pricing your books to low.

Anyway, these are just a few of the differences between selling on Ebay and selling on Amazon. As always feel free to ask me any questions you might have, and I’ll try and answer them in a future post.

Calm down, take a deep breath and repeat after me:
“When it comes to selling on Amazon, there is no such thing as repeat business.”

That’s right. Oh sure, it happens occasionally, you’ll get an order from a customer you’ve sold to before. It’s usually by accident as much as anything else. But in practice, repeat business just doesn’t happen. Customers just have too much choice, they have too many options. Think about how the customer finds used books on Amazon. They search for the book they’re looking for and see who’s selling it. They don’t try and look up sellers they’ve used before, attempting to see if that seller happens to be selling anything they might want to buy. I’ve said it before, Amazon goes out of it’s way to try and make you as the seller invisible to the customer, and that’s just fine. Just be realistic. If you want to build repeat business, get your own website. If you’re trying to build a loyal customer base on Amazon, you’re wasting your time and effort.

So what does set you apart as a seller? It’s gotta be your seller rating right?

Wrong.

Hold on, let me back up for a second. The importance of your rating/feedback does vary from marketplace to marketplace, but let’s start by taking a look at Amazon.

There’s a percentage of customers who will look at your feedback and rating. However, in my experience they tend to be fairly lenient. On Amazon, a rating of 4.5 out of 5 stars is considered good. It sure sounds good, right? But let’s think about that. 4.5 out of 5 means that a full 10% of your feedback was neutral or negative. 10%! In my opinion that makes you a pretty poor seller. Unless you are seriously messing up, you should have no problem maintaining a “good” Amazon seller rating.

Then there’s a whole other segment of Amazon buyers who don’t care about your rating at all. These are the customers who are just looking for the lowest priced seller and don’t look at anything else. These are the same buyers who purchase books that are clearly listed as “acceptable”, thinking that they are going to get new books. Whether it’s by virtue of ignorance or apathy, they just don’t pay attention to anything but price.

Ebay is another animal altogether. Ebay evolved in a completely different way. Because Ebay’s transactions weren’t and aren’t backed up by a big company the way Amazon’s are. That’s why Ebay developed much more of a community component; it was necessarily built on trust from it’s inception. As a result, its rating system is better at assessing sellers performance. There is also more of a tendency to look at feedback than there is on Amazon. On the other hand, it’s a much worse place to try and sell books these days.

Half.com is more like Amazon. Again you’ll find that buyers here are usually just looking for the lowest price.

Other marketplaces like Alibris and AbeBooks rate you as a seller based solely on your fulfillment percentage. However as you move into dealing in high volume, a lower fulfillment is just part of doing business.

Feedback and ratings are something to be aware of, but don’t lie awake at night worrying about it. If you’re generally doing the right thing, you’ll be just fine.

Beware of scammers. Especially if you’re selling used textbooks online. There are a lot of college students who will try to pull a fast one on you, but it can really be any kind of customer or any kind of book. They will especially target new sellers, so it’s important to be on your guard from the get-go.

A common scenario goes like this:

You’re selling a used chemistry text book, you list it, someone orders it and you ship it out. Everything seems like business as usual, until all of the sudden the customer claims he never received the book.

Now a certain percentage of customers who say they never received a book are totally legit. On the other hand, a certain percentage aren’t.

A lot of sellers, especially small, individual sellers will just believe the buyer and give out a refund.

This is why it is so important to use delivery confirmation or tracking, especially on more expensive books. A lot of the time if you get a customer who claims to never have received a book, you can just give them the tracking number and you’ll never hear from them again. But believe it or not, there are some who will stick to their guns, even in the face of evidence against them. They will try and beat you with persistence. They think they can bully you into giving them what they want, even when you know you’re right. Don’t let them.

What I do when I run into a situation like this is to provide them with the delivery or tracking information, and if they still demand a refund, I very politely invite them to file an A-to-z claim. They can’t file unlimited A-to-z claims, they only are allowed a certain number. Even the most persistant of scammers will usually leave you alone at this point.

Don’t be afraid to have an A-to-z claim filed against you, especially if you can prove you are in the right.

Using delivery confirmation is a hugely useful tool, and a great deterrent. A lot of potential scammers won’t even bother with you if you use it. It’s also just good customer service.

Be aware that the post office’s delivery confirmation isn’t the same as having a FedEx tracking number, for example. Often times the only status update you will see is when it’s delivered. If I get a customer asking where a package is I check, sometimes they’ll get lucky and there will be an updated status I can give them. Otherwise, it’s the usual spiel about media mail taking 1-3 weeks, please be patient, etc. The important thing is to respond.

The other consideration is where to draw the line, deciding what price justifies shelling out for delivery confirmation. I’m still experimenting with this, but I’d definitely recommend using confirmation for any book over $3-$5. Again, just taking this one step will dissuade a lot of scammers from going after you, especially because they tend to go after the more expensive books.

So I’ve told you not to let unreasonable customers take advantage of you. I’ve told you how to stand up to scammers. You may be thinking to yourself “That’s great, what about my rating and feedback? What about repeat business? Can’t these people sabotage my business?” I’ll address all that and more in part 3.

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.

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.