The Roadmap to Entrepreneurship consists of three steps: Start Up, Scale Up, and then Step Back. I’ve been embarking on a blog series this year to explain each step in more detail. Today’s post will highlight the Start Up phase, thanks to a guest interview with a brand new Amazon seller.
Say hello to Nathan Walsh. Nathan has a day job – although it’s part time – which allows him to build his Amazon business on the side and re-invest his profits. He tried to start his Amazon business during the “FBA Freeze” last December. The warehouses were so backed up that Amazon put a temporary ban on new FBA sellers until the Christmas rush slowed down. Nathan used this time to prepare by reading blogs, watching YouTube videos, and learning from the FBA community. As soon as the ban was lifted, he jumped in with both feet.
In his first three months, Nathan sold $15,000 on Amazon, profiting nearly $6,000. His ASP was $19.45, and he achieved these numbers selling 95% books. His start-up capital? Just $600. You can’t beat those margins! That’s why many Amazon sellers get their start selling used books.
What stood out most to me was Nathan’s turn rate. He sold 81% of his inventory in the first three months. He did this by pricing competitively and by sourcing books with a sales rank under one million (he only had 13 books ranked higher than a million). This “fast nickel” business model set him up for some early wins, and as his business expands and matures he can afford to start purchasing some longer tail inventory.
If you’re still sitting on the sidelines waiting to jump into the FBA game, take a page out of Nathan’s playbook and jump in with both feet! If you start your own Amazon adventure, be sure to leave a comment below and let us know how it goes. I love to hear success stories from other sellers, especially those who start up for the very first time. And remember, there’s no better category to get started with than books. But don’t take my word for it – learn from Nathan’s story below:
Nathan, thanks for sharing your story on the blog! Tell us a bit about yourself.
My name is Nathan Walsh and I currently live in western North Carolina. I am in a career medical profession working part time. Aside from this, I am working diligently every day to create a sustainable business that can provide the financial freedom that I’m sure many of us are looking for.
What’s your favorite breakfast food? Being I am from the South, I would have to say livermush. You can find it at most every diner in my area, and it is served with that southern hospitality.
Colgate or Crest? Crest. Never had a cavity. I will let that speak for itself.
Have you sold online before? What attracted you to selling on Amazon? Before starting my journey with Amazon FBA, I had sold just a few of my personal items on eBay. Once I heard about the Amazon FBA program, I was all in. Having the opportunity to reach a massive audience without having to drive traffic to my own website was a no brainer for me. Also, having Amazon’s team pick, pack, and ship my products to my customers and handle customer service was very valuable to me. We should all feel very appreciative to have such a great opportunity.
Do you sell MF, FBA, or a mixture of the two? What other platforms do you sell on? I have never sold MF. On Amazon, I have utilized the FBA program for all my sales. Outside of Amazon, I have listed products on eBay and the Facebook marketplace. I personally believe it is a good practice to diversify your online presence.
You tried to start selling on Amazon FBA during the “FBA Freeze” in December, so you weren’t able to send in any shipments prior to December 19. How did you prepare during that down time? Were you still sourcing? What materials did you study along the way – blogs, training videos, mentors, etc? When I heard about the temporary “freeze” for new sellers I was highly disappointed because I was about to send in my first shipment. Instead of letting this adversity get the best of me, I made the decision to use this time as an opportunity to research and continue to source products. This preparation was key to my success when the ban was lifted. I focused on sourcing books every chance I got, and watched many YouTube videos as well as read many blogs. This time enabled me to learn the “nuts and bolts” of the business. One of the resources I used was a group on Facebook called FBA Rockstars. This group consist of many new sellers as well as experienced ones who worked together to answer common questions for beginners. I would highly recommend this group when just starting out to learn the basics. I also watched a variety of different YouTube channels to get the inside scoop on many different techniques. My favorite blog to read was thebookflipper.com. This blog was very beneficial to my success, and it takes a more sophisticated approach to the book business. (author’s note – I didn’t pay Nathan to say this, I swear!)
What tools/software do you use?
-InventoryLab for my listing software. This allows me to keep all of my inventory organized and speeds up the listing process.
-The Dymo 450 Turbo for printing item labels. This works well in conjunction with Inventory Lab.
– TaxJar for my sales tax needs. It helps you comply with sales tax regulations and answers all sales tax related questions.
– Just started with the eFLIP software. Great software that helps you find profitable books to flip from merchant sellers to FBA. This software takes online book arbitrage to another level.
– I understand why many sellers turn to a bluetooth scanner paired with a downloaded database like FBAScan. However, I just use the Amazon Seller app. It’s free to use and gives me all the information I need to make smart buying decisions. If you have bad reception in many of your sourcing locations or will be traveling far away from home, I would recommend using a downloaded database paired with a bluetooth scanner.
– Keepa and CamelCamelCamel – These are must have tools and are also free to use. These tools give you a more detailed history of the product you are looking at buying. I would highly recommend learning how to effectively read these charts early on.
-Goo Gone, Scotty Peelers, and a shipping scale round out my tool arsenal.
What are your primary sources? (General categories – don’t give up any local gems!) The majority of my books come from thrift stores. I go to the same book sale in my area every month. All other methods of sourcing come from online arbitrage.
Any unique sources that you’d like to share? Facebook marketplace. When I travel to other towns to source, I am always looking the night before for people selling their books. Also I use an app called Offer Up which is similar to the Facebook marketplace. Letgo is another similar app that I have not yet used, but would imagine this would make another great way to look for books.
You’ve spent $2,186 and generated over $15,000 in sales in just three months. You can’t beat those margins! How do you see the business scaling over the next 3 months? I have been very fortunate that the Goodwills in my area have been putting all donated books on the shelves. However, they have now started scanning the books themselves and keeping the ones that fit their parameters to sell online. Most of these are the ones we are all after, but occasionally one slips by or you can snag one that has the barcode covered. So far, Goodwill purchases have been a huge part of my sourcing efforts. Now that this has changed, I will have to take a step back and look at other sourcing methods. I would predict a decrease in sales until I can find other solid sourcing methods. My number one goal is to scale the business, and I am constantly working to find ways to do so. I hope I can continue in an upward trend.
If you have a current job, do you have aspirations of quitting that job soon? (Don’t worry, your boss won’t read this!) I do not see myself quitting my current job. I look at this job as a great way to fund my daily living while I can funnel every penny I make from the business back into my business funds.
What’s been the hardest part of running your business so far? Consistently finding profitable books to sell. Some days are great and others are not. Staying persistent and finding a variety of sourcing methods has been key for me thus far. It can also be hard to remember that I can only do so much at one time, and not all days are winners.
What have you enjoyed the most about selling on Amazon? Being Amazon is the world’s largest online marketplace, I feel privileged I am able to sell on this platform. I enjoy being able to be my own boss and work the hours that work best for me. It’s nice being able to do some hard work upfront and then sit back and watch the sales start rolling in. The FBA program really gives you the freedom to spend more time scaling your business rather than spending all of your time with busy work.
How many hours are you working in a typical week on the Amazon business?
As of now, I’m working at least 50 hours a week on my Amazon business. I hope to decrease this number by making tasks more automated. If I want to continue to scale my business, I know I will need to make parts of my business more efficient to free up more of my time to do more “big picture” planning.
How far away do you drive to source inventory?
The farthest trip I’ve taken was an hour and a half drive. On average, I drive anywhere from thirty minutes to an hour away from my hometown.
Have you done any online sourcing?
Yes, I have bought books from Amazon to resell on Amazon. I have also spent many hours sourcing on Ebay. I am also looking on a consistent basis at classified sites to find good deals in my area. I have recently signed up for Eflip, which enables me to find low merchant fulfilled prices on books and then turn around and send the books in FBA at a much higher price. The advanced features from this software help me to narrow down search results, which in return helps me find profitable books to flip much faster.
Your turn rate is exceptional! Can you tell us a bit more about your pricing philosophy? Do you use a repricer? Do you match the lowest Prime price? How often do you reprice manually, if ever?
Although I’m a newer seller, I currently have 17 reviews and have 100% feedback so far. Each book is unique, so I always try to be as transparent as possible with the book I’m sending in so I can maintain 100% positive feedback. I do clean up some of my books by wiping away any marks, smudges, stickers, sticky residue, etc, but recommend not spending a lot of time doing so. I have a default description for each book condition, but always make sure to make note of any flaws. I make my descriptions as specific as possible and try to put myself in the shoes of the buyer. I try to stay positive about the book’s condition while being honest about the book they will receive. I think my personable condition descriptions and bold, professional company name have helped my sales conversion rate.
I’ve never used a repricer. I price very competitively. Sometimes, there will be one or two sellers coming in at a much lower price than the other sellers on that book. In that case, I will price above them and wait it out to turn a higher profit. I do match the low FBA offer often. Sometimes, I go in right under the lowest FBA price. If I have a spare few minutes during my day, I will grab my phone and reprice. Although I’ve sat down and had mass repricing sessions a couple of times, I mostly do this in little chunks every now and then. On average, I’d say that I’m repricing every week or so.
You stick with books mostly with a rank under 1 million. This has helped you sell them quickly! Do you plan to ever branch out and source higher-ranked books? I hope to start sourcing higher ranked books more often, if the numbers add up. I have found that many books with higher sales rank can make the day from time to time.
What’s your target list price for books? Minimum list price? (Your actual list price is $20.36)
Instead of looking so much at the target list price, I’m looking at my return on investment. I have no problem with turning a $0.25 purchase into a $2 profit if it looks like an easy flip. I basically look for any books that have a good return and are likely to sell. There are many different factors I consider for each book, such as the buy price, condition, average price and sales rank, FBA offers, and more.
How much money will you spend on a book? (Your average is $2.36)
So far, I think the most I’ve spent is around $30 or $40. For me, it’s all about the numbers. I would spend $100 on a book if I felt confident that I could sell it and make a good return on investment. If the book has a strong sales history and price history, I’m more than willing to pay more to make more.
If you could go back in time three months and start over, what would you do differently?
When I first started, there would be some books I would put back down believing the condition wasn’t up to par. Where as now, I pick up books that cosmetically don’t look as good as long as they don’t have water damage or are a complete disaster. Especially textbooks. Most college students just want a book at a good price. Now, I just make sure to make note of any flaws for the buyer. I use to put back many books that I was too afraid to sell because of condition. I still highly recommend buying good quality books and being completely honest about the condition, but there are some books I regret putting back on the shelf.
What advice would you give someone who’s on the fence about starting an Amazon business?
I would definitely say to jump in. With an Amazon business, there’s a lot to gain, but not a lot to lose. Unlike most businesses, it’s relatively cheap to get started, especially if you’re buying books. So the worst that could happen is that you would lose a few hundred bucks. The potential profits are so high, why not start? You can always test the waters and see if it’s a right fit for you. Even if it’s not the right fit, you haven’t lost a lot. You are going to have some failures. I’ve had my fair share. Don’t get discouraged and just know that everyone has many of the same learning curves. Realize not every day will be a winner, and there will be some mistakes here and there. Building any business is not easy, and the same goes for Amazon. Treat this like a business and you will see results. Stay persistent and try to learn something new each day. Look at everyday as an opportunity to make money. Remember every time that you’re watching Netflix or surfing on Facebook, you could be building your business. Also, stay organized. This will help declutter your mind and turn your focus to building and scaling your business. I think Amazon FBA is a great opportunity for all of us, and we should feel privileged to be able to sell our products on such a great platform.
Do you see yourself sticking to this current business model, or do you think you’ll pursue Private Label, Wholesale, Online Arbitrage, etc. in the future?
The book business has been good to me so far. I really like sourcing and selling books. It’s hard to find other products that have the returns that books have. Private labeling is something that I’ve definitely considered, and may consider at some point in the future when I feel like it’s the right time. I would rather learn the book market first and try to succeed in this than try to jump into hundred different things. I would like to continue to make books work and build this business, even though there are some challenges I face. I have also looked into Merch by Amazon to provide additional automated income, but have just scratched the surface so far.
Anything else you’d like to share with other Amazon sellers? Again, I think Amazon FBA is a great opportunity for all of us with minimal risk associated with it. Mindset is key. Amazon is always changing. When it does, adapt to it. I also believe that research and education is very important, but the only way to see real results is to get out there and take the plunge!