- Business and Employment
Online Bookselling For Small Sellers: The 1000-10-1 Model
Most independent online booksellers who are willing to share their business models approach the business much differently than I do. I’m a bookseller, not a collector, so I strive for as much turnover as possible, and I don’t think I sacrifice much profit to do it.
Now, I’m naming and articulating my business model and sharing it with you.
The 1000-10-1 Model
It’s a simple idea: An inventory of only 1,000 books that are each selling for around $10 or more can provide a full-time income for one person.
I admit that I haven’t done any complex statistical analysis of this model. (If I wanted to do that, I wouldn’t have gotten into bookselling.) But this is essentially the model that has kept me in business for years.
I regularly see boasts on message boards from sellers proud of their 10,000-volume inventory. Many claim 20,000 or more books and have the listings on sales venues to back their claims of massive inventories.
According to my model, however, a person who holds 10,000 books is failing.
Here’s the question: What’s wrong with their listings or their inventory that’s keeping it all from selling? If the object is to sell books, they hold 10,000 mistakes, a potential liability rather than an asset. (True, the listings could have all been recently posted by a staff of dozens of people - all dependent on this one business for income - but that’s not likely.)
I’ve never had more than about 1,250 listings online at one time, and selling books in my only job. I delete items when their selling price drops below $5, and I rarely buy books with selling prices under $8, even if they are very cheap to obtain. Low-priced items require too much investment in time per item, although I do list a few inexpensive items and I don’t delete the ones that go bad as often as I should, so some of my income is from cheap stuff.
That said, I make plenty of sales well over $10, too. Periodic $75 and $99 items skew the profits upward nicely.
Until recently, I’ve repriced listings monthly or so, often by hand since my inventory is small, excluding items with high sales ranks that probably don’t need adjusting anyway.
I often place my items at the lowest price overall (by only a few cents and not all the time), despite claims by some sellers that this results in a gradual lowering of the overall sales price. It does not. Once my item sells, the price gradually rises as each low-priced item sells. If supply is high and demand is low, the price continues to drop as each seller lowers prices on unsold items, as it should in a marketplace.
About one-third of my inventory is items others consider undesirable – items with Amazon.com sales ranks over 1,000,000. These sell regularly, too, despite their ranks, and these sales are often at higher prices.
That’s it. That’s my big secret -- my successful online bookselling business model.
I’m choosy with what I list, relentless in deleting item and zealous with repricing. I make money by selling smart rather than collecting.
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