Anatomy of a Sourcing Adventure

My wife and I spent six days visiting Portland and the surrounding area, and attempted to pay for our entire adventure by sourcing, listing, and shipping books while we were on the road.  If you missed the post which outlined our goals for the trip, you can check it out here – it also includes an in-depth look at calculating and understanding your margins when selling books via Fulfillment By Amazon.

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The Goal:  

Our aim was to source 193 books, at an average list price of $17.50.  Our anticipated cost per book was $1.50.  And we wanted to ship every book to Amazon’s fulfillment centers to avoid bringing a single book back to Denver with us.

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The Results:  

So, how did we do?  Let’s take a look at the results:

• Books sourced: 325
• Total list price: $6,635.15
• Average list price: $20.42
• Total buy cost: $793.00
• Average buy cost: $2.44
• Average sales rank: 559k

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As you can see, we exceeded our goal to source 193 books by well over 100 books!  Our average list price was a bit higher than targeted, but so was our average buy cost.  The Portland thrift stores charged between $3 and $9 for the majority of their books (ouch!), but we were able to dilute our average buy cost by sourcing at cheaper locations outside of the city.

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List Price Analysis:

‍Let’s take a closer look at the data to gain some insights from what I would consider to be fairly typical results for us when we source from thrift stores.  A few people asked me if I avoid books selling for less than $17-$20, so allow me to address that question first.  My AVERAGE list price is usually around $20, but I do purchase lots of books in the $10 range.  Even though the margins are lower on cheaper books, if the sales rank is great and the purchase price is cheap enough, I’ll still flip these cheaper books.  This would be the “fast nickel” philosophy on these titles, and $10-$12 books are typically easy money at thrift stores.  Here’s a detailed look at the list prices for our Portland haul:

As you can see, I have started to avoid books selling for under $8, due to poor margins and increased competition at those lower price points.  But that’s the topic for a future blog post.  The bell curve in the above chart is fairly typical for thrift store finds.  There are lots of $10-$35 books on the shelves, and a smaller number of higher-priced books, coupled with a gem over $100.  By selling just a few of the more expensive books, I’ll be able to pay for the entire haul and the rest will be pure profit.

Sales Rank Analysis:  Due to the higher prices at the Portland thrift stores, we minimized our risks by being cautious about purchasing higher-ranked books.  If I found a book ranked 2.5MM that was selling for $15 from other FBA sellers, I would normally pick it up for a buck or two.  Since the costs were $3-$5 on most books, that didn’t make good financial sense on this particular trip, so our average sales rank was a hair better than normal.  Here’s how the histogram chart shook out for sales rank:

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Bottom Line:

Based on the 48% rule (from last week’s post), I expect that Amazon will eventually deposit $3,185 into my bank account, after the books have finished selling.  If we subtract out the $793 buy cost, that leaves me with a total expected profit of $2,392 – or a 332% return on my investment.  And that, my fellow flippers, is how to pay for a trip by sourcing on the go!

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Travel Tips:  

Are you interested in doing a bit of sourcing on your next trip?  Here are a few tips I’ve learned along the way to make the process easier:

• Planning your stops – start with thrift stores, using Google Maps to find nearby stores.  Do your best to hit them in bunches so you don’t spend too much time driving between stores.  You can also research sales on booksalefinder.com to see if there’s one nearby.  Stop by libraries and college bookstores to see if they have books for sale.  Even if they don’t have any for sale currently, they may have a few boxes in the back that they’d be willing to part with for the right price.  If you adopt this approach, bring cash.  You’ll have a better chance of completing the transaction that way!
• Bringing supplies – we bring our phones and scanners, along with a Scotty peeler, a roll of tape (don’t bring the whole tape gun, as those aren’t allowed in carry-on luggage), and a shipping scale.  You could do without the scale, but it’s nice to have with you, and it doesn’t take up all that much room in your luggage.  You can buy boxes at Staples or Home Depot, or just ask the thrift stores for smaller boxes when you’re buying books.  For filler material inside the boxes, you can either rip the pages out of one of your duds and crumple them up, or pick up paper bags from the grocery store.
• Labeling and shipping – since we use 30-up labels, we can print those out from any printer.  Staples has ones you can use, or you can always use the one in your hotel lobby or at a local library.  If you keep your shipments to 50 units or less, you can usually avoid split shipments that way.  Then you can print your book labels and address labels at the same time – then simply label the books, tape the box, and slap your shipping label on the box!  You can find a UPS store locally or drop the books off at a Staples.
• Moving books around – unfortunately, books are heavy.  If you’re staying in a hotel, borrow the luggage cart from the bellman and move them that way.  Or simply stay at an AirBnB home and have all the space you need to process your books!  We did most of our processing in this tiny house just north of Hood River:

P.S. If you ever get the chance to hike the area around Mount St. Helens, it’s well worth the drive!

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