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:
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:
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,