Section one, why books. Amazon is the world's largest storefront. From day one, you as a seller can list products to sell on Amazon using their platform. You can even compete with Amazon themselves. As a beginner on Amazon, you are restricted from selling on most categories. However, books are always unrestricted.
Selling books is how Jeff Bezos, the CEO of Amazon, started amassing his fortune and eventually built the company that we see today. You can step right into his shoes from day one. If you master selling books or other unrestricted products, you will eventually be automatically unlocked to sell on other product categories. This is why selling books is a great introduction to selling on Amazon. If you can master the sale of books, you will be more prepared to take advantage of the massive buying season during the winter holidays. Even booksellers will pivot their business model to start selling toys and holiday merchandise during this time of the year to make huge profits.
I know what you're saying. Why used books, books are a great way to start on Amazon because guess what books are everywhere. You probably already have a bookcase full of inventory ready to sell. used books are great because you can buy them very cheap and potentially sell them for a very high price. It's entirely possible to buy a book from a thrift store for 50 cents and resell it for over $20. That may seem small, but that is a 3,900% return on investment.
You can't get those kinds of returns on the stock market. You can trade very little time and money for a lot of passive income. When selling books on Amazon, you have two pathways merchant fulfilled or mfn or fulfilled by Amazon, or FBA. With FBA, you send books into Amazon's warehouse and they shipped to customers from there. With that pathway, you do not have to deal with customer support or shipping. So many sellers prefer this method of selling books.
If you sell items through the FBA pathway, your products will ship to customers for Amazon's warehouse with free two day shipping. Customers will pay a higher premium for products sold this way. Since your books will be selling via FBA, you will not encounter competition from merchant sellers. You'll be pricing your inventory against other FBA sellers. There's also the potential to work from anywhere. It's entirely possible to travel across the United States while sourcing, listing and shipping to Amazon.
All of your inventory sits in Amazon's warehouse. If you're strapped for time, you can even pay a small fee per book to have Amazon store and label your inventory for you. However, there are downsides to selling books with that being the first downside would be fees. With FBA, you have to pay the inbound shipping fee, monthly storage fees, fulfillment fees, referral fees, which can range anywhere from six to 20% based on product category booksellers Pay about 15% per item. And lastly a variable closing fee, which will be $1 and 80 cents for media products such as books. Next, we have the potential for lost inventory inside of Amazon's warehouse or on the way to the warehouse.
It can also take a while for your inventory to become live on amazon.com you may even get split shipments. A split shipment is where Amazon tells you to ship your inventory to two different warehouses, and the shipping costs may be more if you have to ship it further out. Lastly, it's harder to make a profit on most books because of all the fees. With selling books through the merchant fulfilled pathway, you control the means of shipment. You have complete control over your inventory. You can also be quicker to market with your books because you do not have to ship your books to Amazon.
Like on the FBA pathway. You are also able to sell way more books because your profit margins will not be eaten up by Amazon's FBA fees. However, like everything, there are some costs To using this process, first you must package ship the items yourself. You must keep the books in your own home garage or storage unit, you must prevent the books from getting damaged. You must deal with customer feedback, and you're forced to compete with other mega sellers, who can afford to have dramatically reduced shipping rates and can sell their books for under $5. This course will focus on the FBA pathway.
When selling a book through the FBA pathway, your fee structure will look something like this. Let's take a use book that sells for $14 and 99 cents. For example, I have to pay the Amazon referral fee of $2 and 25 cents, a variable closing fee of $1 and 80 cents, and the FBA fulfillment fee of $2 and 48 cents. The cost of shipping this book to Amazon's warehouse is approximately 35 cents for one pound book. And this rate is from where I live currently, your rates may be different depending on which warehouse you're shipping it to the total fees for this book will be $6 and 88 cents, subtracting that from $14 and 99 cents, we are left with $8 and 11 cents. Assuming I paid 50 cents for this book our total profit will be $7 and 61 cents in my return on investment we 1400 and 22%