Half.com, eBay losing favor with booksellers

Just a few years ago it appeared Half.com might rival Amazon and eBay as an online trading hub for books and music. It combined the best features of the bigger rivals: a community of buyers and sellers like eBay, with simple fixed-priced trading like Amazon.

In 2000, eBay bought Half.com and was expected to make a run at Amazon’s fixed-price trading. Instead, Amazon simply copied all the best features of Half and called it Amazon Marketplace. After Amazon siphoned off most of Half’s traffic, eBay announced plans to close Half in 2004. Sellers were encouraged to move their listings to eBay stores, which offered lower fees and fixed-price trading. After an outcry from sellers, eBay relented, and Half remains open. But the site hasn’t been promoted for some time, and sales are down to a trickle.

EBay was popular for book dealers when the Internet first went mainstream in the mid-1990s. But growth is slowing, and many booksellers have quit using the auction format for common books.

Bookseller gripes against eBay have mounted for years. Every year, it seems bidding volume goes down and fees go up. The listing process is more complicated than ever. “Not enough buyers, too many sellers” is a common refrain these days on eBay.
The biggest drawback with eBay compared to Amazon is it requires so much more time for the same level of sales, yet generates more aggravation in the form of problem customers. Non-paying buyers and quibbling about shipping rates are a problem. One remedy for this is to demand immediate payment via Paypal for all transactions. But this precaution generates still more e-mails from buyers demanding to mail in a check.

Booksellers have had mixed success selling their wares in eBay stores. A major early beef was that store items weren’t visible in buyers’ search results. In a bid to save its Stores program, it seems eBay is beginning to listen to the complaints from booksellers. Store items have been added to search results, and eBay has begun export-ing store inventories to other platforms like Froogle, Yahoo, and
Shopping.com.

eBay has a complicated schedule of fees. Generally, for an item selling at around $25, you’ll pay an insertion fee of 60 cents plus a final-value fee of 5.25 percent. More fees are due for Buy-It-Now, pictures, and other bells and whistles. If you use PayPal, more fees. See the list here.




New in paperback: The Home-Based Bookstore: Start Your Own Business Selling Used Books on Amazon, eBay or Your Own Web Site (by Steve Weber)

Selling books on Amazon Marketplace

Amazon is the most user-friendly bookselling site for beginning sellers. Follow the “Sell Yours Here” button displayed on any product page. For a step-by-step tutorial on listing items for sale at Amazon Marketplace, see the online start guide here.

After you open your seller account, Amazon will deposit funds from your sales into the bank account you designate. You’ll also receive a shipping credit that will cover your shipping costs in most cases.

Fees. In addition to its 15-percent commission, Amazon tacks on another $1.23 per transaction, which is apparently used to cover refunds issued through its A-to-z buyers’ guarantee program. Also, a 99-cent fee applies to each sale except those made by Pro-Merchant Subscribers.

Amazon Pro-Merchant Subscription. For a fee of $39.99 a month, Amazon provides access to bulk selling tools and waives the 99-cent fee charged on Marketplace sales. For sellers with more than 40 sales per month, the subscription pays for itself.

Amazon zShops. The precursor to Marketplace was zShops, launched in 1999 to provide small businesses with storefronts on Amazon. The idea was to make Amazon a venue where practically any type of merchandise in the world could be traded. But most Amazon buyers find items through searches, and do not browse through shops or categories. The shops are not highly customizable, nor are they promoted by Amazon, so their utility is limited. The shops can be used to sell items that Amazon hasn’t authorized for sale on Marketplace. The zShops program is open only to Pro-Merchant subscribers. For items under $25, sellers pay a 5 percent closing fee.

Amazon auctions. When it launched its auction platform in 1999, Amazon hoped to lure auction fans from eBay. At the time, experts predicted that auctions might become the dominant form of online commerce. After a lukewarm response from buyers, Amazon quit publicizing its auctions. Today Amazon’s auction platform is practically invisible to buyers, and most sellers have abandoned auctions.




New in paperback: The Home-Based Bookstore: Start Your Own Business Selling Used Books on Amazon, eBay or Your Own Web Site (by Steve Weber)

For used booksellers, Amazon Marketplace is tough to beat

Auction marketplaces like eBay captured most of the early online bookselling volume during the 1990s. But much of the buying has migrated to fixed-price platforms, and today the real action is on Amazon Marketplace.

Auctions can be fun for higher-priced items. But when it comes down to it, most book buyers would rather just buy the book and be done with it. Some booksellers still prefer auctions for truly unusual, rare books, hoping that a bidding war will erupt. But a growing number of sellers are opting to park nearly all their books on a fixed-price marketplace like Amazon and wait for the buyer to come along at your price.

A well greased marketplace like Amazon works as a reverse auction. Instead of buyers competing to offer the highest price, sellers compete to offer the lowest price.
Amazon Marketplace.

Amazon is the 800-lb. gorilla of online bookselling, with tens of millions of preregistered buyers. In May 2005, the site had 41 million visitors compared to 35.5 million a year earlier. Amazon sellers have access to the world’s biggest online book bazaar at no cost until after the sale, where a commission is due to Amazon.

The biggest advantage for Amazon sellers is that used merchandise is displayed right alongside Amazon’s new items. So buyers looking for a new books discover the used and collectible items at the same time. In just a few years, this has added millions of buyers to used-book trading.

If you are just getting into online bookselling, learn the business while working exclusively on Amazon. Most books will sell faster and at higher prices on Amazon than anywhere else on the Internet. Later, you can decide if it’s worth it to increase sales a bit by listing your inventory on more venues. Before listing on more sites, you’ll need a system for keeping your inventory current to prevent multiple customers from buying the same book on different sites.




New in paperback: The Home-Based Bookstore: Start Your Own Business Selling Used Books on Amazon, eBay or Your Own Web Site (by Steve Weber)

How much to pay for used books

How much should you pay for your inventory of used books? You should have no trouble limiting your costs to $2 or $3 per book by buying at library sales. It’s hard to get into serious trouble when you’re spending only a few dollars per book.

If you’re fairly resourceful in finding books and decent at picking them, on average you should pay about $1.75 per book and your average sale should be about $11.

A good rule of thumb is to try to triple your money when acquiring stock. Remember that commissions, shipping costs, and items that don’t sell will cut into that mar-gin. But like every rule, there are exceptions. If you find a book you know you’ll be able to sell quickly at $100, do not hesitate to pay $60 to get it. It’s a lot easier to make $40 on one sale than making $5 on eight separate transactions.

Nobody bets right all the time, and no matter how good you are at picking books you will inevitably accumulate some losers and pass up winners, if you’re just working with hunches. However, now it’s possible to research book prices even while you’re at a sale if you have a Web-enabled cellphone. You can even hook up a scanner to some of these phones so you don’t need to type in the ISBNs. This type of tool can take some of the pure joy out of finding a great books through serendipity, but it can also help your bottom line.




New in paperback: The Home-Based Bookstore: Start Your Own Business Selling Used Books on Amazon, eBay or Your Own Web Site (by Steve Weber)

What book buyers want: Amazon "buyers waiting" pre-orders

Sometimes a book is in such hot demand and the supply is so low that a “buyer’s waiting” list is formed on Amazon Marketplace. Every day, 2,000 to 3,000 buyers “pre-order” an item, hoping that a seller will come along with an available copy. Buyers indicate the title, price and condition they want to purchase a certain book at.

In some cases these pre-orders are simply a case of a buyer who wants a book at an unreasonably low price. But in most cases, the “buyers waiting” list indicates those titles where demand has outstripped supply. You can view a list of the highest-priced buyers waiting pre-orders here.

Sellers who list lots of new books for sale on Amazon Marketplace at regular intervals will stumble onto these “buyers waiting” situations. If you list a book for sale through the “Sell Yours Here” button and there is at least one buyer with a pre-order, when you reach the page to indicate your price you’ll see an orange box on the right labeled “BUYER WAITING.” There might also be a message indicating, for example, “Average pending pre-order price (based on your condition) $20.”

You can price your item at least double the average pre-order price. If it remains unsold after a week or so at that price, you can always lower it incrementally to find the exact price that will trigger one of the pre-orders.




New in paperback: The Home-Based Bookstore: Start Your Own Business Selling Used Books on Amazon, eBay or Your Own Web Site (by Steve Weber)

Other nonfiction for sellers to avoid

Romance novels. Romance novels will sell quickly if they are brand new. But if you’re going to sell romance novels for profit, you’ll need to be a romance reader yourself. That’s the only way you’ll know which ones are worth carrying in your inventory.

Books by comedians. Books by comedians like Bill Cosby, Paul Reiser and Jeff Foxworthy are usually big sellers and make great gifts. But the books are usually overprinted and don’t have much resale value a short time later.

Paperbacks. Mass market paperbacks are tempting to the beginning online seller because of the low cost. They are lightweight and can be shipped cheaply. Unfortunately, the online price is quite low for most pocket books more than a few years old. You can better spend the time searching for out-of-print books worth real money.

When a title is selling for under a dollar online, that means not only that the title is oversupplied, but that demand is low. So do not hang onto this type of junk hoping to make a bit of profit from shipping and handling. Over time, as your inventory expands and storage space shrinks, those cheap paperbacks taking shelf space will be a serious burden. Deleting and discarding deadwood is a tedious, time-consuming affair. This is a chore you can prevent by investing in quality stock now.

Cheap books will come back to haunt you for other reasons. It just happens that the customers who buy the cheapest books are usually your most demanding buyers. The customer who paid under a dollar for a book is the customer who complains the loudest about shipping fees and delivery times.

The larger-format books known as “trade paperbacks” are not as common and are often profitable.

Another special category is those vintage paperbacks, which are quite collectible. Certain authors, cover artists, series or genres have legions of fans. Avon, Gold Medal, and Dell “mapbacks” are in demand, so don’t automatically trash old paperbacks without a glance at the cover. Every day, thousands of collectible paperbacks are thrown out, or mistakenly sold for a small fraction of their collectible value which can reach $500. A good resource is Collectable Paperback Books by Canja.




New in paperback: The Home-Based Bookstore: Start Your Own Business Selling Used Books on Amazon, eBay or Your Own Web Site (by Steve Weber)

Selling new books

Selling new books on an Internet marketplace is a tough, low-margin business due to the aggressive discounting by Amazon of 30 to 40 percent for popular titles in recent years. Normally the biggest dis-count you’ll be able to get on new books from a wholesaler is around 45 percent. That leaves little room to cover costs like returns, lost packages, damaged books, and other mishaps.

But this business model can work, and there are several sellers who sell thousands of the latest bestsellers right on Amazon Marketplace, just a few cents under Ama-zon’s price. Of course Amazon gets the vast majority of the sales because of their name brand and free shipping offers. But some buyers will choose the Marktplace seller for a single item since standard shipping is $3.49 versus $3.99 from Amazon.

With such a small profit margin on the top best-sellers, some sellers of new books opt not to compete with the most popular bestsellers. Instead, these sellers search for steady sellers in the 100,000 Amazon sales rank range that are not heavily discounted.

Unfortunately several Amazon Marketplace vendors have been known to “game” the system without actually having the books on hand. Only after the customer orders does the seller place an order with his wholesaler. This leads to shipping delays at best, and as a result the feed-back ratings of these sellers are usually horrible. These sellers cancel many Marketplace orders when the book becomes unavailable through their wholesaler, which irri-tates customers and casts a pall on the online shopping experience. Sellers advertising an item for sale should have it on hand for immediate shipment.

The following is a listing of new book wholesalers who service retailers.
Ingram Book Co. of Nashville is the largest U.S. wholesaler to independent book dealers, serving about 9,000 retailers including Amazon itself. With five regional warehouses, Ingram manages next-day delivery to nearly every address in the United States.

If you want to expand your sales potential by adding new books to your inventory, your first step should be to call an Ingram representative at 800-937-0152. The com-pany will want to know if bookselling is your primary busi-ness. If so, you may be eligible to establish an account. If not, it would be necessary for you to purchase at least $5,000 in inventory annually. Initial orders must be for at least 100 books or a wholesale value of $500 or more.

To be eligible for an account with Ingram or most other wholesalers you will need to provide your resale certificate or tax exemption certificate number, which you should obtain from your state’s tax department.

If more than half of your offerings are Christian books, Ingram will probably want to refer you to its Spring Arbor Distributors unit, which can be accessed on the Web at springarbor.com or 800-395-5599.

Baker & Taylor of Bridgewater, N.J., is the pri-mary alternative to Ingram. Baker & Taylor carries more titles than Ingram, but is more oriented toward schools and libraries.

The other major book wholesalers serving U.S. booksellers include:

Academic Book Center. Portland Ore.
800-547-7704
www.acbc.com

Ambassador Book Service. Hempstead, N.Y.
800-431-8913
www.absbook.com

Blackwell’s Book Services. Blackwood, N.J.
800-257-7341
www.blackwell.com

Bookazine Corp. Bayonne, N.J.
800-221-8112
www.bookazine.com

DeVorss and Company. Marina del Rey, Calif.
800-772-4304
www.devorss.com

The distributors. South Bend, Ind.
800-348-5200
www.thedistributors.com

Sunbelt Publications, El Cajon, Calif.
800-626-6579
www.subbeltpub.com




New in paperback: The Home-Based Bookstore: Start Your Own Business Selling Used Books on Amazon, eBay or Your Own Web Site (by Steve Weber)

Running a real business

Once you’ve decided to pursue bookselling as a regular endeavor you’ll need to decide how your business will be formally organized and how you’ll meet your tax obligations. As your business grows you should periodically revisit the question of what is the best form of organization for your business.

Call your county government headquarters to ask what types of business permits and licenses are required in your jurisdiction. Some cities, counties and states require any business to get a business license. For example, if you are operating your book business in a residential area, your local government will likely require a “home occupation permit” or a zoning variance. With a zoning variance, you’ll probably be required to promise that you won’t have walk-in retail customers. Since your business is an online and mail-order business, this won’t restrict your business.

If you are conducting your business under a trade name such as YourBookPeddler you should file a “fictitious name” certificate at your county or state government office. This is so people who deal with your business will know who the legal owner is. This is also known as a DBA name (Doing Business As) or an “assumed name.”
Sales taxes.

Although it is often repeated that the Internet is a “tax-free zone,” this does not apply to state sales taxes. You’ll need to pay state sales taxes on orders you ship to customers in your state. To pay the tax you’ll need to open an account and obtain a “resale license” (in some cases they are known as resale numbers or sales tax certificates.)

You don’t collect state sales tax on orders shipped outside your state. Internet sales (as well as fax, telephone, or mail-order) sales from another state aren’t subject to sales tax, unless you have an office or warehouse in that other state. In some states, shipping and handling fees are not subject to tax.




New in paperback: The Home-Based Bookstore: Start Your Own Business Selling Used Books on Amazon, eBay or Your Own Web Site (by Steve Weber)

Nonfiction books for online sellers to avoid

Some nonfiction books have very limited appeal in the used marketplace and should be avoided: Time-Life series, Readers Digest condensed books, and most National Geographic titles. These are wonderful books, but not in demand after they’re sold new. Sports, art and coffee-table tourist books are all dicey for the online seller. When new, many of these books sell strongly, but hardly anyone wants to buy a used one for themselves.

Business books are fertile ground for online sellers, as long as the material isn’t too dated and the book was not a mega-best seller. Sometimes events can make a business book obsolete overnight. For example, after the stock market meltdown of 2000, books on stock day-trading went in the tank.

Self-improvement is a strong category, as long as it’s not a fad book by a celebrity.
Biographies are a marginal category most of the time. Memoirs of political figures, especially dead ones, are best left in peace.
The history category produces several blockbusters every year, but used copies sell slowly a few years later. Certain sectors of history are the perennial winners: The Civil War, World War II, Vietnam, and anything on the Confederacy. Don’t bother with World War I.

Certain nonfiction categories, like fiction, must be very current to have value. Don’t buy travel books unless it’s this year’s edition. Same with law books.
Cookbooks is a huge area and many sellers even carve out a specialty within cooking. Specialized titles such as bread baking, diet cooking, natural foods and ethnic are areas to explore. One type of used cookbook to avoid is microwave cookbooks, which are nearly impossible to get rid of.




New in paperback: The Home-Based Bookstore: Start Your Own Business Selling Used Books on Amazon, eBay or Your Own Web Site (by Steve Weber)

Used-book sales on Internet jump 33 percent

The Internet has revolutionizing the used book market and the pace of growth in online used book sales is astounding. Used book sales on the Internet jumped 33 percent during the year 2003 alone, according to a study sponsored by the big U.S. publishers.

Today one out of every 12 books sold is a used book, and two-thirds of them are purchased online from small businesses. The annual volume of used book sales over the Internet totals $600 million annually, according to the Book Industry Study Group.

The industry study was recently detailed in this story by the Associated Press.

Another take is this story from National Public Radio.

You can start today because the Internet has obliterated every barrier to entering the used bookselling. No longer must you collect 10,000 to 20,000 books to launch a viabale store. It’s not required anymore to lease a storefront or hire employees. You don’t even need to take out an ad in the Yellow Pages. You can begin in five minutes by listing a book for sale online.

Used bookselling is the perfect online business. No merchandise is easier to find at low cost or easier to ship and less fragile than books. Since most are worth less than $20, the business attracts very few scammers and cheats.
Customers want selection, value and convenience.

The future looks bright for online bookselling because thou-sands of new customers are discovering every day they can get a used book online at a great price. Many of these customers would never have thought to shop for a used book before. Online used booksellers are thriving because they offer value, convenience, and selection. A quick search, checkout, and they’re done.




New in paperback: The Home-Based Bookstore: Start Your Own Business Selling Used Books on Amazon, eBay or Your Own Web Site (by Steve Weber)

Selling textbooks online

Used textbooks are overlooked by many online sellers. True, textbooks quickly drop in value when new editions are published every few years and values plunge. But if you have a source of very cheap textbooks, bulk purchases can be a good way of picking up some valuable stock. Usually a few out of ten will be worth decent money.

And vintage textbooks, particularly graduate-level mathematics and economics, are sought after by academics. Just about everything is collected by somebody. University professors, authors, and researchers purchase vintage texts.

You can usually ignore several categories of textbooks without missing anything valuable: introductory sociology and political science texts more than a few years old, study guides, and introductory economics and computer books. After a few years, these books are basically worthless.

Certain types of textbooks, however, hold their value much longer. Biology texts are revised less frequently than any other text category, so the value is steadier over time.




New in paperback: The Home-Based Bookstore: Start Your Own Business Selling Used Books on Amazon, eBay or Your Own Web Site (by Steve Weber)

Selling penny books on Amazon.com

Sure, that Stephen King or John Grisham novel may have sold a gazillion copies. But a couple years after its release, many copies will be listed on Amazon Marketplace for pennies. So the more popular a book is – unless it was published very recently – the less likely you’ll be able to resell it for a profit. Romance novels will sell quickly if they are brand new. But unless you know what romance novels collectors like, don’t bother with them.

So while fiction is the lifeblood of most book collectors, most of it ends up as dead wood for the online seller. Salable books must be rare and sought after by collectors. Unless you are an expert in certain collectible fiction – or develop an ex-pertise and have access to lots of stock – concentrate your acquisitions on quality nonfiction titles, especially during the early stages of building your business. Today’s blockbuster fiction novel probably will last 6 months to a year. A quality nonfiction title will sell steadily year after year.

After a few months of actively handling books, you’ll develop a sixth sense for books that may be worth big money.




New in paperback: The Home-Based Bookstore: Start Your Own Business Selling Used Books on Amazon, eBay or Your Own Web Site (by Steve Weber)

How to make money selling books

Unless they were released very recently, bestsellers are usually too plentiful on the Internet to be worth your time. Once the sellers outnumber the buyers, prices drop like a stone. For an online marketplace, maintaining good sales volume will depend on having a competitive low prices, or having books that other sellers don’t have. Out-of-print books should be a mainstay of your business. One economic study conducted in 2004 showed that used books that were previously on the New York Times bestseller list sold for only 15 percent of their original retail price on Amazon Marketplace.

Finding just a few scarce books per month can provide a substantial income for your business. For example, Cards as Weapons, a 1977 book by Ricky Jay, regularly sells for $250 online but if you know to look for it, you can occasionally find a copy for a dollar at a yard sale. The book teaches card scaling, the fine art of throwing simple playing cards, and is constantly in demand by magicians, card sharks, and hobbyists. Look for quirky books, or specific scholarly works.

Unless you are already knowledgeable about book collecting a good organizing principle for your business is that nonfiction usually sells for higher prices, yet will cost you about the same to acquire.

Nonfiction is worth more because our customers need nonfiction books. Nonfiction books instruct the reader on how to get a job, fix their car, or use their computer. The nonfiction book saves the reader time and money, and thus has value. Fiction books, on the other hand, compete for the reader’s leisure time. Perhaps the reader will decide to go to a movie or go out do dinner instead of buying that novel.