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Does condition matter? A closer look at the data.

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It’s back to the data this week, fellow flippers!

We’ve spent a good deal of time analyzing sales rank and its impact on the book business.  As you can see in the chart below, sales rank is directly correlated with sell-through rates.  Here’s my most recent data, looking at books that have been on the market for at least three months:Screen Shot 2016-05-05 at 11.11.03 AM

In other words, the better the rank, the more likely your books are to sell (provided that you price them correctly).  Once you understand this concept, you can implement a smarter scouting philosophy to maximize your time and boost your bottom line.

Sales rank isn’t the only factor that plays a role in selling your inventory, however.  Your seller rating, the book’s condition, your description of the book, and your pricing strategies also affect how quickly your books will sell.  We’ll spend time looking at these factors over the next few months, but today’s post will be centered around a book’s condition.

The Theory:  My hypothesis about condition is that better conditions will have higher sell-through rates.  If that holds true, then Very Good books should sell more often than Acceptable books.  Let’s set out to test that theory!

Background:  When I list my books, I track all of the key metrics including current sales rank, condition, list price, and even my description for that book.  I then import that listing data into my Tracking Spreadsheet, where I can carefully analyze it.  When I took a closer look at my books that have been on the market for at least three months, here’s how I expected the data to look:

But instead of a direct correlation between rank and sell-through rates, here’s how the data actually shook out:

New books sold significantly better than used books – no real surprise there.  But across the board, used books sold at roughly the same rate, regardless of condition.  Even more surprising, my Very Good books actually had a lower turn rate than my Acceptable books!  Now if that’s true that used books sell equally well regardless of condition, surely the better books would have higher average selling prices, right?  Again, that’s not the case.  My average Acceptable book sold for $19.89, while my Very Good books averaged $16.95.

Full Disclosure:  Now before you come to the conclusion that a book’s condition doesn’t matter at all, let me disclose a few things.  The majority (80%) of my books get listed as Good or Very Good, and I don’t sell many Acceptable, Like New, or New books.  So my data is not necessarily statistically significant.  Also, most of my Acceptable books are textbooks with stickers and highlighting all over the place, which would explain my higher selling prices for the Acceptable category.

So where do we go from here?  We need MORE DATA – and fortunately I happen to “know a guy”.  My good buddy Greg Murphy (busproofbusiness.com) is a mega-seller and has plenty of data to help answer my questions.  More importantly, he was also kind enough to share his data with me.  A bit of background info on Greg first: he only lists his books as Acceptable, Good, and New, and he uses boiler plate templates to speed up the listing process.  Because of the large scale of his business, speed is paramount to maximizing his revenue, so he simplifies processes as much as possible to gain more efficiency.  Here’s what his data reveals about the sell-through rates for each condition:

Screen Shot 2016-05-05 at 12.20.19 PM

As you can see, Acceptable and Good books sell at roughly the same rates, while New books turn over at a significantly higher rate.  (And for all of you data nerds, these metrics are statistically significant since each category has at least 10,000 books being measured!)

What about the average selling price – does that differ by condition?  Greg’s Acceptable books sold for an average of $10.61 and his Good books sold for an average of $10.89.  There’s not much of a difference there!

Takeaways:  It looks like my hypothesis was disproved.  A book’s condition doesn’t appear to have a direct impact on its likelihood of selling, or its overall sales price.  There are so many more variables in play, and I firmly believe that your seller rating and your book’s price play a larger role in the customer’s purchasing decision.  Books are commodities, where price and convenience (i.e. selling using the FBA program so customers get fast, free shipping) trump everything else.

Here are a few actions you can implement today based on this data:

  • Stop spending so much time trying to “condition hack” your books.  The amount of time spent upgrading a book from Acceptable to Very Good will not likely make your book sell faster or for more money.  Your time is better spent getting out there and finding more books.
  • Speaking of prepping your books, there are people out there who still shrink wrap or poly bag every single book.  While this may help protect them, consider your time and its impact on the bottom line of your business.  In other words, stop shrink wrapping and go find more books!
  • Don’t pass up Acceptable books when you’re scouting at your local thrift store.  I subscribe to the Golden Rule of book buying: if I wouldn’t be happy buying it, I won’t sell it to my customers.  Leave the water damaged books behind, but almost anything else is fair game.  The exception to this rule is with expensive textbooks.  If I find a mangled book (that is still readable) that is selling for $40, I’ll list it appropriately for $25 or $30 and sell it to someone looking for a deal.
  • When you grade your books, the purpose is to describe it accurately to manage the customer’s expectations, not to garner a higher price tag for your products.  This will go a long way toward improving your feedback and seller rating – factors that may actually help you sell more books at the end of the day.  When I am faced with a book that could be considered Good or Very Good, I’ll downgrade to Good to keep my customers happy.  And I’m no longer worried about leaving money on the table!

Today’s post may spark a bit of debate, as some sellers feel quite strongly about grading their books.  Feel free to share your comments below, whether you agree or disagree.

Until next time,

-Caleb

 

 

 

35 Comments

  1. Appreciate your analysis. I would add this-I will MF high price books say $70 & above. I cannot risk Amazon losing them or damaging them in a warehouse. I am also able able to answer any potential buyer’s question. Murray

  2. When I first started selling on FBA, I religiously shrunk-wrapped each book. It created a high log-jam in processing, so I changed to only shrink-wrapping books priced over $20.
    Then I dropped that. Now, I may shrink-wrap a book that is up over $200, but then only if it is in some way fragile or a first edition with a primary value based on rarity rather than the knowledge contained within, like a scholarly work. If it is a hardback collectible and the dust wrapper is showing wear, I will usually throw on a Brodart cover instead to prevent further wear and make it look nicer for the buyer. I tend to get good feedback on those, but I don’t do it often.

    In the last month, when Amazon allowed free returns. I had about 200 items returned that I had no hope of selling. Some had been in over a year, so many were still in shrink-wrap. About 40% of those had the shrink-wrap torn and in tatters from warehouse handling – yet surprisingly, there was no difference in wear and tear between those, the books still fully sealed, and the ones with just a tag on the back and no wrapping. I really think having the book arrive with the shrink-wrap all torn up would look worse to the customer than having none at all.

    • Now I find that interesting. I was under the naive assumption that Amazon was more more protective of our merchandise than that. This is a big issue for me because I was planning on buying an impulse sealer and shrink wrap bags. My concern is that if the shrink wrap gets torn and that would look unprofessional, wouldn’t we have to fear that unprotected dust jackets would be further damaged without shrink wrap.

      What about poly-bags? Have you found books better protected with them than shrinkwrap?

      • It’s not Amazon’s fault.. it’s their $10/hour employees who don’t care much 🙂 I have never poly-bagged or shrink-wrapped a single book, so I’m not the best person to ask. But I haven’t had any issues with condition over the several thousand books I’ve sold. For what it’s worth!

    • Crazy… but not surprising. Thanks for sharing!

  3. Super interesting read. I can’t help but thinking that the average sales price could have more to do with an individuals repricer settings than the condition of the book. The more aggressive the settings across the board, the closer I would assume the final sales prices would be for any given condition.

    • Likely true – but neither Greg nor I use a repricer for our FBA items. It’s extremely difficult (if not impossible) to isolate data for any single category (i.e. condition or price), but it was fun to pull the data and try to draw conclusions at any rate!

  4. Caleb,
    Along the lines of Nathan Godwin’s comments above, my view is that price is by far the main factor that drives sales. So if Greg is pricing his acceptable and good books at virtually the same price then the data is reflecting that books priced at a certain point sell better than books priced at a higher point. Another way this would play out in real life is that if a person ordinarily prices his books at the lowest FBA price for instance, regardless of used condition, then the acceptable and good books will shake out about the same. I don’t think most buyers get past the price point and don’t search for a book in very good or like new condition if it is several dollars higher than a good or acceptable copy.

    • This sheds light on the point Caleb made that bottom line, books are commodities.

    • I would tend to agree with that assessment, Stephen. But I believe the conclusion still stands – more books are more important than “fixing” the ones you have! Thanks for reading and chiming in.

      • I agree. It is much better to have a lot of good and even acceptable books for sale than to fixate on finding books with higher condition ratings. The only caveat I would have about that would be in the case of really expensive books, say $100 or more. I wonder if “like new” or “very good” make much difference when the lowest price is north of $100?

  5. One of my concerns is new books. I used to run a very successful, large new and used bookstore in the 90’s and have been away from that industry until recently getting involved with Amazon. My question is that Amazon states in its boilerplate that you can only list books as new if you have the original receipts. I have any number of books I get in mint condition but are from library sales, etc and there is now way I have receipts that they came from a store or distributor. My concern is if I list these books as new and, for whatever reason. a customer has a complaint that is was used, and Amazon investigates, I know that’s a suspendable offense.

    Now if Greg Murphy moves massive volume and a large number of new books, how would he navigate that issue? I don’t list any books as better than Like New for that reason and would love to list books as new but am afraid of getting suspended if, for whatever reason, I have to justify the book as new with a receipt.

    • Mark,

      I’m not sure that you need a receipt for new merchandise. Do you have a link that states that fact? Here’s what I found on the subject: http://www.amazon.com/gp/help/customer/display.html?nodeId=201231500

      • I had left Amazon a message stating that their boilerplate (as per your above link) does not state you need a receipt to sell a new book. However, I could have sworn I had seen that somewhere. Nonetheless, I find that once a case leaves the computer, it can disappear in Amazon’s infrastructure. I had posted this to Amazon a week ago and haven’t gotten a response. When I need a title cleaved because the metrics are wrong and call the catalog dept, I have actually waited 2 months for them to get a new ASIN cleaved, which is ridiculous. I’ve also had people create one with me on the phone in 10 minutes.

        So my specific message to them asked for Amazon boilerplate that specifically states we need a receipt from a store, publisher or distributor to prove a book is new. I have searched Amazon’s help screens and have not seen that stated emphatically anywhere and if it is, who knows when or if they will answer me.

        I know that one of Amazon’s big suspension issues is when they catch a seller selling used as new, so I want to be on the right side of this.

  6. I also am concerned about the growing number of $4 FBA wholesalers who are lowering the bar. When I see that Greg Murphy’s average price for a Good listed book is $10.61, how does he compete with sellers that post listings at $4 for the same book if condition appears to be less of an issue than price? I’m not worried about the penny-sellers because I only sell FBA but I see books like the Hunger Games scanning at 1000 with a mass of $4 sellers and I can’t see marketing anything FBA at such prices. I’m not even sure how wholesalers see a profit at that price considering they have to hire outsources, there are FBA storage fees and processing costs.

    • Sometimes it’s cheaper for a seller to sell a book at $4 FBA and lose a dime than pay 15 cents to have the book destroyed. No one builds a business around $4 books – it’s just when the prices tank or people are irresponsible with their repricers that these things happen.

      • This is what I find confusing. There are about 7 wholesales who sell all their FBA books at $3.75 to $4.50. Every time I post books, I see them on page one with those prices. It makes no difference if it’s a romance novel or the Gutenberg Bible (they list at the above prices. I have never seen them listed anywhere FBA at realistic prices). Now the only thing I can think of is that if someone is making $.50/book and they sell 3000 books a day, they are grossing $1500 in profit but from that they have to pay a team of outsources to process those books, list them, etc, buy supplies, pay a sales tax accountant or Tax Jar substantially, rent warehouse space, etc. I don’t get it. What am I missing?

  7. A very interesting reading Caleb. Nevertheless, I think we have a difference in customers between USA and EUROPE. Especially in Belgium and The Netherlands people would not likely buy “Acceptable” condition. People in Belgium and The Netherlands want to buy “New”, “Like New” and “Good”. To give you an example : I sold last week a book which looked new but was been read once and on the first blank page you found the name of the owner. So I listed this as “Like New” mentioning that the name of the owner was on the first blank page. I had to refund the buyer. So from that day on I list those books as condition “Good” although most people would rate this as “Like New”
    As what concerns the shrink wrapping : BOL (the Dutch Amazon) doesn’t oblige you to shrink wrap books but they do recommend you do. Seems that books lying in the warehouse for some time collect dust and suffer from that. What is your opinion on that ?

    • Perhaps American customers are more concerned with cheap products that they can throw away… which is part of our problem as a country! Quality doesn’t seem to matter as much anymore…

      Regarding shrink wrapping, I’m still not going to do it. A little dust won’t hurt a book 🙂

    • Jose, it appears to me that you covered the bases but your customer was a jerk. If you stated the owners name was in the book and the customer still returned it, it might be that the customer was looking for a free read.

      When I owned and operated a large new/used/collectible bookstore in the 90’s, any number of customers would buy brand new books then return them to get a free read.

      Unfortunately, we have no control over the ethics of customers.

  8. Caleb, are you competing against Amazon with your new books? My understanding is that Amazon does not share the buy box if they have new copies of the book for sale. Do you still have such a high sell through rate on new books if Amazon is on the listing?

    • Linda,

      I only sell a handful of new books, so I can’t really comment on that. But you’re right about the buy box, which is why I typically sell my books as used unless they’re in the original shrink wrap.

  9. I pulled out about 200 books from Amazon warehouses and had them returned to me (this was 2 months before the free return month in April). I had several books at Christmas returned to Amazon with negative feedback because the books did not appear to the buyer to be New. Even though most looked New to me, I did find a few returns that even I didn’t consider New (or Like New, if you go strictly by Amazon’s book condition guidelines). Thus, everything was relisted and nothing now goes to Amazon except Acceptable, Good or Very Good. And I go strictly by the written guidelines. My feedback ratings took a BIG hit, and now that I have my rating back to 100, I make sure to err on the side of caution.
    I even went so far as to put a special mark in each book so that if the buyer had a complaint, I could have them check for this mark and confirm that it was MY book that was sent to them. With some previous books that I had Amazon return to me, the books were labeled with labels that I have never used in my 4 years of doing this, so I don’t know where “my” books ended up.
    I even began recently bagging every book. And, yes, it does slow you down.
    BUT, after reading these discussions, I think it is time to put aside my recently developed paranoia and stop marking and stop bagging the books. It is not the expense of bagging but rather the time it consumes. Although, I will continue to bag the expensive books. I recently held an expensive book for MF because I didn’t want it lost or damaged by Amazon. Unfortunately, I have International Shipping selected and this book was sold to Mexico. NO good way to ship MF to there; lowest cost was greater than the $24.95 Amazon gave me. Plus, no good way at a reasonable cost to get confirmation that it is ever received (even with UPS ground, I was told). I am still holding my breath on this one.
    So, Caleb, I will follow your suggestions and get back to being an efficient seller.
    Two questions, though. 1. Do you use strictly generic condition notes for each condition category, or do you go further to add specific comments for each book condition (which I do)? It sounds as if you ad specific comments relative to each book. 2. Kind of off the topic, but you mentioned before that you do not use a repricer, and reprice after about 6 weeks from shipment to Amazon date. How do you manually reprice SO many books, considering the volume of inventory that you have?

    • Great comments, Ed – thanks for taking the time to share! I’ve heard complaints that Amazon doesn’t send out YOUR particular book, and I’m not terribly surprised. If there is a shelf with the same books and an employee just snags a random book this could happen easily.

      Regarding your questions, I put specific comments on each book since this helps to set apart my listings from generic boiler plate templates. I have a spreadsheet I use that makes this process quick and painless. I reprice using the Inventory Health report to keep my older listings competitive.

      • I will look further into the Inventory Health Report. I have used ScanLister since the first day it came out, and I find it easy to use the generic comments I have for each condition, BUT, add any special notes to the generic comments after I scan the book and the item shows up.
        BTW, after 4 years of doing books part-time, and now going more heavily into them, there has been some great info that has come out in the last two months, and I find yours to be VERY interesting. Yep, I did sign up for the Busproof business course ’cause I know there are some topics in there that I don’t know enough about. I am now trying to limit all of my time to just 2 or 3 discussion groups. When going full-time, it is easy to get side-tracked in listening to many different people, and not only can it stop me from listing but it becomes confusing and almost overwhelming. So it looks like you, the “Busproof” boys and Nathan (who has always been helpful over the years) have made the cut. Thanks, and please don’t waste your time commenting. I have no current questions that need to be answered now.

      • Supposedly, Amazon doesn’t send out someone else’s book if you have co-mingled inventory unchecked. But this raises a reason one might want to bag their books–it would stand out and discourage warehouse workers from choosing someone else’s from yours.

        Now there has been a lot of discussion in the past year on MST about processing books. Some bag, some shrinkwrap, some bubble-wrap, some don’t bag or wrap any books and some only put a covering on the higher priced books.

        Now I realize that the time taken to add coverings loses you money but I’m wondering if it discourages negative feedback. The comments on MST have been all over the place on this and it’s confusing.

  10. Unfortunately, the problem with speed is some sloppy grading. Books can slip thru as good when they are barely acceptable.

    I get the premise/conclusion, but us lower volume sellers can’t subscribe to the ‘ #’s will bury negative FB ‘. High FB satisfaction is especially important to Q4 business when there is a huge influx of sellers.

    And not everyone FBA’s.

    Thanks

  11. And when you use FBA as your venue, most buyers are not going to focus on condition. IOW, FBA is an equalizer. In addition, when it pertains to book condition, Amazon is decidedly hands off. Which is contrary to their policy and ‘practice ‘ is telling us this. That ‘ actual standard’ is also setting the tone on book condition.

  12. I sell a lot of acceptable books. While none are damaged, they often have “used” stickers and highlighting and/or margin notes, and scuffed covers. Students don’t seem to care, as long as they can get the information. A lot of books I sell are on esoteric academic topics. I never turn away an acceptable book unless it has water damage. When I first started, I avoided them thinking they would not sell – but soon realized it was a big blind spot. I don’t remove used stickers, because books seem to sell anyway with them. I sometimes will lightly sand a book’s textblock if it looks dingy.

    I polybag the occasional book when it is either old, particularly small, or missing a dust jacket.

  13. From my data which now is about close to 34k sales in books, new books tent to sell frequent less than used books. However expensive new books tent to also sell less frequently while the over profit is much better with new books assuming you’re paying close to what you pay for used. I have tons of new textbooks I buy directly form the publisher, these are textbooks selling at $150+ a piece but my used books always have faster sales. It make sense too when I was a student, I would buy my textbooks from Amazon and would always buy the cheaper very good or good because it was always half of what I pay new. We forget that buyers also reason as so. I was at a book store at the mall and was surprised to see the condition of many of these new books. It was bad they were books I would sell for very good or good. Not like new. But they’re selling them full retail price. Cheaper books always have faster more frequent sales. I guess you should be focusing on books you can get $5 profit or more than on books that you can get $50. Cheaper books just sell faster used than new.

  14. Hi Caleb, It seems to me that the condition question is closely related to pricing. So there is a camp of sellers that price based on lowest FBA regardless of condition and another camp that will price higher for better conditions (“match my condition or better” on repriceit). So if you are pricing against the lowest FBA regardless of (sub)condition, it would make sense that you might get more VG sales than the other guy who marks his VG higher than similar G FBA offers (he’ll have to wait longer for the sale). Since you are using inventory health report to reprice, I’m assuming you are going off of the lowest used FBA price which does not take condition into consideration? Are you pricing taking condition into consideration on your initial pricing? I’m diligently working on my pricing/repricing strategies and trying to identify the sweet spot for “condition premium” or how many $/% higher I can charge for better condition. Some say Amazon buyers don’t care about condition, they just want FBA, but I’m not convinced of that as I sell better condition books at a premium every day. The question is, how much of a premium is best? I’m willing to let a few buyers go for cheaper options, but I don’t want my book to sit and sit while the price falls lower and lower. No clear cut answers and no empirical data out there that I have access to to answer this question.

    • Hey Dondie – great questions! First off, you’re right in that there’s no empirical data, and no “one size fits all” approach to pricing. I know that some buyers pay close attention to condition, some pay close attention to a seller’s rating and quantity of feedback, and some simply snag the cheapest price and move on. It’s a delicate balance between pricing an item to move and yet maximizing its profitability. Some buyers will pay 5 or 10% more for a VG book vs. an A book, but other buyers may pay 25-50% more! It really depends on which buyer happens to be looking at your particular offer. I don’t ignore condition, and I certainly do ignore price outliers (someone at $8 Prime, while the next 4 offers are all closer to $15). I use the Inventory Health report to help guide me to items that I can move quickly (great rank, high Prime prices, etc), but I don’t use it exclusively to just match the lowest Prime price. That would be foolish in my estimation. It’s a guide I use, along with some basic API calls and Keepa graphs, etc. Find a strategy that works for you, and then keep tweaking it and analyzing it along the way! I wish I had a better “data” answer for you, but there’s very little available to us for the time being.

      • When the book is a pretty low sales rank (less than 25k) I always notice that the prices are tiered out in increments based on quality. For those situations I’ll always price my book in compared to other used books with the same condition. Since the books are selling so many copies you get the customer who would rather have a higher grade book and you get a better margin.

        • In certain cases I would agree with you, but for the average book that sells a few copies a month, stratifying based on condition may give you marginal benefit compared to the added effort. It’s worth pricing a hair higher in certain instances, but not worth trying to spend 10 minutes “upgrading” the condition of the book, if that makes sense.

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