Selling Books On Amazon

My little amazon comic book store startup has been continually turning in a 200% Y/Y growth, with a 300% M/M growth rate over the last 4 months. As we close out the quarters financial books, there are two things that are directly contributing to the success, one is social networking, and the other is listening to what people are saying. Without those two things, I doubt that my startup would be having this growth rate in the middle of a recession.

All companies at some point depend upon having something that a person wants to buy, and owning an online book store is no different. You have to carry the goods that people want; otherwise you consume space with inventory that will just not move. While being an online bookstore can be entertaining, the same issues that apply to regular bookstores apply to the online world as well. You have to have what people want; otherwise you are consuming space, space that could be used for something else.

The first thing I had to admit was that the things I think are cool most people will yawn over. I love comic books, I love science fiction, and any combination of those two are awesome. I also love anime, but realistically the margins are too tight for carrying much anime. The margins are much better for comic books, but what comic books do I want to get? This is where two social networks are coming into play. The major source of information is the FriendFeed comic book goodness room, this room allows people to vote on comic book covers. If the cover gets no votes, then the 137 subscribers to the room have no interest in the comic. If I get a lot of votes then the comic book is interesting and I should carry it. This has been a huge success factor in helping me find things to buy that will sell quickly in the store. It does not mean that I won’t buy a dud here and there, but it does give me a window into popular culture and comic book culture that I would not otherwise have visibility into.

The other is an internal trade group that talks about the ups and downs of owning a bookstore. The internal trade group is one of the few that allows conversations between purely online sellers and physical store owners. There is a lot of synergy there that allows both to be more competitive in a highly competitive environment. The thing that is the most interesting is that while no one in the trade group is giving away top secrets, they are sharing what works and what does not work. This sharing is critical to everyone’s success in selling books regardless of venue. You can make all the mistakes you want, but sharing them helps other sellers become stronger.

While competition is good, sharing things that work and do not work are also important along the way. Sellers can gain much by following where popular culture is going, and using that to tie into your book buying habits. You will end up being a stronger seller in the longer run.

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This amazing report from Barron’s and picked up by the Seattle PI states that Amazon.com is now carrying 1/3 of all internet sales in the USA. If you are selling online, this is the place you need to be then, no one can afford to pass up that big an audience. But this also helps put EBay into perspective.

Amazon and EBay have been slugging it out as the must go to place for people looking for deals. While both sites differ in what audience they collect, if the numbers from Barron’s are right, then EBay is somewhere around 40% of all ecommerce transactions on line. That means the two big sales sites, Amazon and EBay account for a staggering 73% of all internet sales in the USA.

Given the graph above from Compete.com Amazon gets some 65 million unique people coming to their site each month, while EBay gets some 79 million. To grow out your business you have to be on both platforms, but you also need to find goods that work on one platform or the other, some goods like books and some toys work great on both platforms. While I would love it if eBay would just to go to a fixed pricing model (mostly because I don’t like auctions, either to purchase or to sell) the ability to reach over 70% of the internet buying public between the two is an important number to know about.

The key to success is where you sell, when you can reach an audience of some 144 million unique visitors that is one very large audience to sell to. There is going to be a certain level of cross over, people who go to both sites to price compare, but in the longer run, no online third party seller can afford to ignore the numbers. Smaller sites are great, but combined they are going to make up less than 27% of all internet sales, and you have to include department store web sites, and the tons of smaller independent web stores on the internet.

Tags: amazon, ebay, sales, percentage, audience, interesting, Technorati

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This is going to be one of the more tricky things for sellers to deal with, the upcoming tax on all sales on line, not just Amazon, but eBay and a host of other systems are going to start charging sales tax. Amazon already charges sales tax for sales to Washington state residents who shop at Amazon, the problem is going to come in when and where are those taxes going to be collected.

It will be easier if Amazon, EBay and other systems collect the taxes like they do now for Washington state residents. It makes sense to do this, and makes local sales tax an issue that third party sellers do not need to deal with. If the system changes so that third party sellers have to account for sales tax, many will simply eat the taxes when they price because of pricing pressure on goods. It is going to be hard to collect the 8.5% Washington state sales tax on a book selling for a penny, but cash strapped states are going to look for their .085 percent of that penny.

One of the advantages online retailers have had over the decade since broadband brought millions of retail customers to the internet is that they could avoid paying local taxes. With the economy in trouble, that could change very soon. According to The New York Post, “This would be fiscal relief for the states that wouldn’t require any money from the federal government,” said Neal Osten, a senior policy analyst with the National Conference of State Legislatures. Source: Daily Finance

If the system stays the same, and Amazon, eBay and other systems continue to collect sales taxes like they have been doing in the past where they need to then there will not be an issue for third party sellers. While there is a lot of angst amongst third party sellers on this, the internet as a sales tax haven has seen its final days. There is too much demand for new money to flow into state coffers, and internet sales represents too much of a target to pass up. We have dodged the bullet on this one since Bill Clinton was in office, and it looks like times are going to change.

If the sales systems that we use stay the same, then there is little to worry about, if those sales systems change to require that local sellers cover sales tax as well on their quarterly or annual reporting, then life is going to be interesting for third party sellers that are not geared towards running their business as a regular bricks and mortar business. In the longer run through, let’s hope that the systems stay the same, and that tax accounting and collection remains in the hands of Amazon.

Tags: Amazon, internet tax, tax, taxation, business, collection, future

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There are some changes coming for people who are selling collectible books on Amazon. This means that to sell collectible books, much like other categories, you will have to be pre approved to do so. In an announcement today on their sellers boards, Amazon states:

In order to become an approved seller of Collectible books, sellers must meet several objective criteria. These include:  the quantity of collectible and rare books available for sale on Amazon.com (and other websites), the length of time a seller has been doing business on Amazon.com, the size of a seller’s business, and the detail of the descriptions (including images) of the books listed for sale. In addition, only sellers with low order defect rates and high seller performance ratings will be considered.

For some sellers this will be a concern, either they will not have enough sales to merit selling collectible books, or they really do not have collectible books. There have been cases where the collectible category has been flooded with books that were not really collectible.

In all for some this will be a positive change, for others this will not be a positive change. In all though, it will help buyers who are looking for something collectible find what they are looking for much easier.

tags: amazon, collectible, book, changes, rules, interesting

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Robert Scoble, one of the best technology reporters on the internet interviewed a new company called Vendio that is offering a solution to working Ebay, Amazon and your own web site with a unified system to manage and work your inventory. Most of the base systems are free, but some of the more interesting plugin’s for the system are charge pay as you go. Robert did a video with them, which is below.

The interesting thing about Vendio is that is so far is just Amazon, Ebay and your own web site. So sellers who also use ABE, Alibris, ecrater, bonanzle and other systems will still have to maintain a separate inventory list for them, or work with Vendio to show that there is enough demand to make integration with tier 2 book selling sites work with the Vendio system.

It is an alternative, and something worth checking out if you are working with Ebay, Amazon and your own web site. This is a very crowded market, there are a lot of systems out there, and some that will work with all your sales points, or at least the major sales points. That is what makes this interesting; Vendio will want to bake in a lot more support for other systems rather than focusing on the top three.

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