Selling Books Online: An Overview

The basic principles of running a used bookstore are the same whether you are running a physical or a virtual store. If you're an experienced bookseller, you'll already know most of this. But beginners often overestimate their own time and underestimate the amount of work involved.

Finding Inventory

All dealers get books from the same places: walk-in traffic, garage sales, thrift stores, church sales, library sales, estate auctions, newspaper ads, scouts, other bookstores, remainder outlets, and so on. But every one of these sources will take up substantial amounts of your time. Generally, the cheaper the source, the more time it takes. And yes, every so often you'll score a real treasure for a pittance — but those won't happen often. Pay more for fewer but better books. You are competing for those higher quality books.

Supply and Demand

The biggest problem a used bookstore faces is that you can't easily apply standard retail wisdom. Books on retailing will tell you that you can go for volume with low prices, or go for service with high prices. But to sell in large volumes you need access to nearly unlimited supply — and in this business, there is no easy way to obtain the stock you need. A new bookstore can order and re-order many copies of a bestselling book. A used bookstore can't.

What usually happens to a store that tries to go for volume and lower prices is that it ends up with a lot of books that are in low demand. It's very hard to sell those. And it's magnified online, where there are thousands of other booksellers — many of them trying to sell that very same title.

Set your prices high enough on your decent books. Your supply is limited. It's easy to accumulate a lot of low-quality books, but difficult to maintain a stock of really good ones. Ever notice how certain books fly out every time you stock them? You should be charging more for those titles.

If you don't charge enough, all your good stock will be cleaned out by bargain-hunting customers or by other dealers. You'll be left with the books nobody wants, and when new customers come along, they'll browse and decide it's not a very good inventory.

Condition Rules

Do not buy books in poor condition. Even if they are hot titles. Shabby books make your entire store look shabby — even online.

Reality Bites

Don't depend on cheap books for your income. You cannot possibly supply and process enough to make a decent living. This is not a question of markup percentages — it's a question of fair return for time and education. Have you ever actually added up the time spent per book?

In a bricks-and-mortar store, you will be buying, sorting, pricing, shelving, helping customers find books, ringing up the sale... Let's say conservatively five minutes per book if you're really fast — that's 96 books per day (so long as you don't waste time going to the washroom, talking to your children on the phone, or tossing out salesmen who want to sell you beach towels...). And yes, I know you can sell more than that on a busy day — but on a busy day you have to put aside the pricing and shelving until things quiet down. At an average of $10 per book, working flat out all day, the grand total for an eight-hour day is $960. Take out what you paid for the book, the cost of rent, hydro, phone, insurance, wages (do you ever want a day off again?), bank fees, equipment and shelving, and so on. Account for slow days, and for the books that won't sell — probably 30% or more of your inventory will still be in your stock five years from now. Now you're likely down to well under $200 per day in profit for working harder than you ever have in your life, and being unfailingly cheerful about it.

An online store may have much lower costs — though not always — but considerably higher demands on your time. You need to do data entry on every book. Before you can call something a first edition or a book club copy you need to know for certain that it is, which means research. Your store is no longer self-serve: you have to find the book for your customer in every case. Communication takes time. You have to pack the book, ship it, maintain records, upload new inventory, remove sold items. Let's say 25 minutes per book — which would be better than most of us can manage. That's about 19 books per day. At $10 per book you'd take in $192. At $20 per book, $384. At $50, $960. The numbers improve considerably as your average selling price goes up.

A useful rule of thumb: roughly one sale per day per thousand books listed. To sell 19 books a day you'd need close to 19,000 books listed at any given time. Most of us hit a ceiling well before that — one of the unexpected realities of the business is that at some point you reach a maximum inventory number you can't seem to get past. As you sell more books, you have less time for cataloguing, and cataloguing is the easiest chore to put off.

The lower your prices are, the more you'll work and the less money you'll make. Keep an eye on your average selling price.

And one last point: if you are working long hours for too little return, you'll fall behind on what's happening in the trade. Things change. What worked a few years ago may not work now. You'll also fall behind in your knowledge of books, collecting, and the market — and knowledge is your most valuable asset. Cultivate it. Read books.