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Anatomy of a Sourcing Adventure

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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.

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.

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

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.

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:

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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!

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:IMG_2061

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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38 Comments

  1. Hi Caleb,

    I do agree with you 200% ! I also don’t touch books who aren’t selling at least for €10 but then buying price can’t be more the €0.7. And as you I am selling most books between €16 and €40. And sometimes those gems makes the “cherry on the pie” (as we say here in Belgium)
    But I do think that a good mix of prices is what we should achieve. Sometimes you need those easy flipping cheaper books. Makes people aware that you are existing.
    Nevertheless I seem to be driven to a certain “niche” in books where the margins are a lot higher and in which the work can be done between me and my wife. So no more hustle with employees who at the end take all of your margin. I don’t want to work for my employees. I want to work on a pleasant way for myself. Just enjoying life and have no headaches. It’s nice being a small entrepeneur 🙂

  2. Thanks for showing, in detail, that this can be done.

  3. Wow, left Colorado to visit another mountain? Do get enough of them there?

  4. Thank you so much for sharing this! The idea has been on my mind for awhile now and you’ve helped to solidify the nuts and bolts for me especially since all I do is books.

  5. I loved reading this post. Thank you Caleb.

  6. Great post buddy

  7. Great info for starters like myself.

  8. Loving those excel charts. My wife and I have traveled before to do book sourcing. We would travel to cities in the surrounding area and hit up book sales. Usually they give us generous discounts since we’re taking so much inventory off of their hands. I hope you got some textbooks. Textbook season is right around the corner. 🙂

  9. It’s helpful in your case that you have a partner in crime helping you find twice as many books at any given stop… ;). And if you want to hit up Seattle with me on a weekend sometime this winter, I will volunteer to be your sourcer(or)’s apprentice!

  10. Awesome job! And very inspiring!

  11. Really enjoying your posts! Could you give us an idea of how many hours you believe it took to source the books that you found?

  12. Great post! This is a strategy I’ve considered, but up to now I have always lugged the books home in luggage.

    Question: do you change your Ship From address when you travel source? How does shipping direct from your hotel or wherever affect 1) the fulfillment center Amazon routes your inventory to, 2) your UPS rate?

    This was my first time on your blog, I’ll definitely be back!!

    • Thanks for stopping by, RD! I do change my ship from address, since it’ll usually update to a closer warehouse and will be accurate rates for UPS rather than paying to ship from Denver when actually shipping from Portland. The rates are based on the total distance to the facility, so it will impact the rates – usually for the better, in my case!

  13. Great Post Caleb. I am on my way to Fl this week, and due to your post my family and I will definitely be doing some book sourcing!!

  14. New to books, were do I start?

  15. How many hours per day would you say y’all spent working on books?

    • For the most basic part of our book business, i.e. scouting and listing, my wife and I spend about 8-12 hours each week on the business. Some weeks we spend more, some weeks are less. We spend lots of time recruiting and training our team of scouters, and working on the blog and other software ideas as well.

  16. Do you sell books as new if they appear to be new or do you always list as used?

    • Personally I only sell them as new if they are in the original shrink wrap. Others sell them as new if they look unblemished, but I’m a tad conservative. Plus, you can’t get the Buy Box if you sell new and Amazon is also on the listing, so selling them as Like New seems to help move them out the door. To each their own, though!

  17. Did you try to source at Powell’s! I went to Portland a few weeks ago, and tried to scan with no luck at that monster store!

  18. A non-book question: what’s providing the blue/purple in the meadow off your porch? (I’m new to flipping books on Amazon–got my first 60 listed out of my own library–but I have an interest in low-maintenance gardening with native plants.)

    Located in Chattanooga, Tennessee.

    • Honestly I have no idea! They came with the house when we bought it. If you ever find yourself in Denver, you’re welcome to dig up one of them and see if it can be transplanted!

  19. Great post and great comments. Learned a lot from both of them, since I am new to books.

    Caleb, do you have something, maybe a guide, that you breakdown what you pay your scouters and how you train them?

    I’m great to be in this group!

  20. Hi Caleb I like you post and stuff.
    I really see potential in selling books.
    But maybe you have any tips for outside usa sellers ?

    There are has any method or ideas how to source online ?
    when I will make sell few books after I sourced them manually I will buy the eFlip. but before I buy any tools I think I need to try to work with my hand .
    So I will be happy for any tips \ articals \videos 🙂

    Thanks , Mark

    • Hey Mark – I usually recommend people learn how to do online arbitrage at the same time as they are learning physical sourcing. The skills go hand in hand and what you learn in one arena will help you in the other. If you’re out of the country, you could source locally and then look to branch out with eFLIP and a prep company here in the States to manage the process for you. We have a preferred prep company that gives reduced rates to eFLIP customers. Check out texaspps.com for more info!

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