Know Your Markets and Earn Some Cash: Ebay vs. Amazon

By Linsey Knerl on 25 July 2007 (Updated 18 August 2007) 20 comments

Most online shoppers I know are very familiar with Ebay and Amazon. The problem is that the hardcore Ebayers are not very familiar with the Amazon Marketplace. Those faithful to Amazon third-party sellers are put off by Ebay. By carefully studying the markets of both retailers, it is possibly to not only get the best deal, but make some money in the process!

I have been homeschooling my children for 2 years now. Those that aren’t familiar probably aren’t aware of the cost of textbooks for just one year of curriculum. My daughter’s 2nd grade books would have cost over $500 from the publisher, and that is just not something we could afford. In my quest for a better deal, I hit Ebay pretty hard. I was able to get most of what I needed for about $80 during the off-season (buying in the middle of the school year for the next year.) There were, however, a few items that just weren’t being listed reasonably on Ebay.

I headed over to Amazon, and what did I discover? Various copies of the books I needed were being sold for a steal by third-party sellers. Items that I had won on Ebay auctions for $10-12 were being sold for a couple of bucks on Amazon. A static shipping rate on Amazon also ensured that I wasn’t being extorted for having it mailed to me. Stiff competition among Marketplace sellers and incentive to have the lowest price by offering best placement on the site kept prices in check. Sellers were literally dumping their product.

This really got me thinking: What would stop a person from buying low on Amazon during the off-season and selling high during back-to-school time on Ebay? Nothing, and I did just that.

While Amazon certainly has its drawbacks (no photos of individual books, vague descriptions of item conditions, an unreliable volunteer feedback system), I was able to find many copies of the books months before they hit their peak demand on Ebay auctions. Books I paid $3.00 for were resold at 500% profit and more! After shipping, Ebay fees, and Paypal fees, I was seeing some serious cash. To further sweeten the deal, I was quick to use my Amazon card for my Marketplace purchases to earn 3% back and my Paypal card for the shipping labels on my Ebay sales to get 1% back. While some items without detailed condition descriptions came to me in less-than-great condition, I was able to throw those undesirable items in with a nice lot to keep them moving at a profit.

Textbooks are just one of many specialty markets that this method could work for. Any product with a seasonal peak, mass production, and a niche consumer group would work well to buy low and sell high. Take time to learn the market, and you can save a bundle or even make some extra cash!

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Myscha Theriault's picture

That's really savvy, Linsey. Good for you.

Guest's picture

This is known as arbitrage...and isn't necessarily anything new. You just need access to both markets. Your added value is based on your knowledge, or their disinformation...or inability to access the markets that you have access to.

Linsey Knerl's picture

for the clarification. My understanding of arbitrage was usually used in relation to bonds, funds, betting, etc. I guess I never even realized that this was another example. Profit is good no matter what you call it. And when you have consumers who are unwilling to explore other means of purchasing a necessary item, it can create a very unbalanced market.

I guess this proves that the best consumer is an informed consumer! Thanks for the comment.

 

Julie Rains's picture

The concept may not be new but the application certainly is, at least to me. You've added a nice bonus with the rewards programs. Also, I love that you have a knowledge of this market and can benefit while, most likely, still giving your customers good value.

Greg Go's picture
Greg Go

Textbooks are really heavy! If you were you able to make a profit despite all the heavy shipping, more power to ya!

What do you think of half.com? A lot of my friends use half.com to unload their old textbooks. That place seems to be THE place to go for textbooks. At least, according to my friends. I still have several boxes of 10-year-old textbooks under my desk....

Guest's picture
Douglas Clark

The USPS has a "book and media rate" for about $3.00 to ship an obscene amount of books. I have sent entire encyclopedias by mail while paying next to nothing and delivery times is often better than parcel post and almost as good as 1st class. When traveling abroad I have been able to ship lots of books by post rather than paying excess weight in my baggage allowance (yes I buy that many).

Also the advantage of selling online is that the buyer pays for shipping anyways and even after that charge still comes out cheaper than buying a brand new book at a bricks and mortar store.

Linsey Knerl's picture

While shipping has increased, it actually works out to my benefit. Amazon has not raised most of their shipping rates with the lastest increase (bad for sellers, good for me), and I am still able to charge fair price for media mail shipping on my Ebay sales. Shipping has, in a few instances, actually been profitable by a small margin.

Textbooks for homeschoolers are not nearly as heavy as college textbooks. (think back to the hardcover textbooks you had in elementary and high school) I'm not sure about the market on college textbooks. It doesn't seem to do as well because professors are constantly updating the edition that needs to be used, therefore lowering the used textbook value. With homeschool textbooks, it is pretty much an understanding that older editions still hold 80% value as the new editions. (How much has additon and handwriting really changed over the years?)

Half.com usually has the same value as Ebay (not surprising since they are the same company.) So this would be an area to sell with and not buy from. I did notice that their selection for my niche isn't a wide, which would give me an advantage. I find that by starting the Bay bids at a low price of 1.00 with fair shipping, my items will always sell at a good price. With someplace like Half.com, not using an auction-style listing make keep the book around for too long without a sale. I like to get rid of my items immediately, while the market is still hot.

Guest's picture
Guest

I wish that the internet had been around when I was in college. We could purchase "used" books from our bookstore. They'd sell a new book for $150 (science, usually), buy it back at the end of the year for $20, and then sell it as "used" for $100 the next year. We all knew it was a scam, but our college was in a tiny town and there was nothing we could do about it.

Selling your books directly to the next-year's students was an option, but difficult. There was no online place to do it. Students often didn't know what book they needed until the class started, as professors were in cahoots with the bookstore.

Sigh.

Anyway, that was college. As someone who wants to homeschool my (as of yet unconceived) children, I'd like to hear more about your homeschool methods.

Linsey Knerl's picture

I'd love to share more in the future... I'm working on ways to relate the homeschooling / unschooling lifestyle to frugality.  If you do decide to educate your children at home, you WILL need all the savings you can get!  Good luck!

Lynn Truong's picture

yes media mail rocks. that's the benefit of selling books.

Guest's picture
David S

I like to use addall.com to find the cheapest prices on books. It's not up-to-the-minute current, and it doesn't detail what the condition of used books are, but it trawls several websites and includes the cost of shipping so you know where the best price is. Paperbackswap is an even cheaper alternative, but only if you want to find dirt cheap, very popular mass-market books/outdated books (texts, game guides, etc).

Guest's picture
Chelsea

ha! You made my day with this post. I am an avid ebay/amazon.com seller and buyer. I alwasy compare the two sites before purchasing an item. I found that sometimes amazon has lower prices, which baffles me. Here's why:
I don't know if you have ever sold something on either of these sites. When listing an item, you pay nothing (i am refering to half.ebay.com - Ebay's book site). Then you sell something (woohoo, right? NO!). Half.com takes a relatively low commision (.80-2.00 maybe depending on the book cost). Amazon.com is a killer!! Just yesterday I sold the great gatsby for 2.99 on amazon. I look at the receipt and shipping info they sent me and I notice, they took 3.34 commision! WTF?? They gave me money for shipping, but I broke out in the end (after shipping media mail) with 0- -.05 profit. WOW.
I don't understand why half.com users list items for the higher price. I think it is that not so many people know about it, while amazon is highly publisized.
Anyone have any ideas on this??

Yours truely

Linsey Knerl's picture

I was an Amazon seller until this latest postage increase.  When I found out that they were NOT raising the shipping credit for sellers, I got out.  When you add the 99 cent listing fee to the commission it was ridiculous.  Obviously the way to go would be the $39.99 a month premium package where they waive the 99cent fee.  But this is only good for high-volume sellers.  I don't know what they are going to do when all their smaller Marketplace sellers go bust and leave.  Half.com will probably see alot of new business!

Guest's picture
Guest

Someone asked about college textbooks. I don't try to profit on my college textbooks, but I do try to recoup some of my costs. Someone feeling more entrepreneurial could go for profit, but what I do takes little time and saves a great deal.

For books that are infrequently updated or that I may want to refer to (mostly tend to be more specialized--e.g. junior-senior level/graduate in my major areas), this isn't really worth it. But for lower-level things, they are updated every few years. I have realized that if I spend $100 for a book and keep it, it costs me $100. If I sell it off for $80, then I paid $20 to "rent" it for the semester. If I sell it off for $80 and change my mind later, I can get it "back" for $15 once the new edition comes out and only have spent $35.

Procedure: To buy, use a meta-search such as ISBN.nu, campusi.com, or... well, I can't remember the name of the other one at the moment. Buy from whatever store has the best value. Check the listings carefully to ensure that the seller has decent ratings and is selling the book you want (current edition, U.S. hardcover if you prefer).

I start as soon as they start listing books at the bookstore/website, or if I know based on an early syllabus or conversation with the instructor. Also, it's rarely tragic if you don't have the book during the first week, although in some subjects I'll get a good jump start and read several chapters before the class even starts.

End of semester I list several things on half.com, choosing a price based on what else is listed, what I paid, etc. I haven't gotten into ebay very much, even now that they've bought out half.com. What I like about half.com is that if I don't get it listed in time for this semester's rush, then someone will usually buy it before next semester starts. This works for me because it's really low volume; higher volumes would be better off at Ebay. Pick one place you mainly want to sell (whether it's an auction or a fixed-price sale) and list everything there so your brain doesn't explode. Always include priority mail or similar as an option for textbooks because sometimes students have last-minute changes and need books fast; the student will pay for a more expensive copy if they trust your listing and will get the book quickly.

Guest's picture
Anne

I use bookfinder.com. This is a wonderful site that is linked to many, many used book stores nationwide. I have found incredible prices for standard books, and for many hard-to-find out-of-print books too. One book I was recently looking for, a college textbook, I found listed from about 40 different places, ranging from $9 and change to $89! The shipping prices are quite reasonable, and you're dealing with a store, not an individual, so they're pretty reliable on sending you the book.

Guest's picture
RitaB

Hi Linsey-great job with the book profits! I am planning to start homeschooling my high school daughter soon and would like to save money on books. The problem is, I have no idea how to figure out what books she'll need. Any ideas or resources you can point me to ?

Linsey Knerl's picture

There are many resources to determine what curriculum your child may need.  I'm working on an article that lays it all out, but if you want me to immediately send you a list I use for getting the right books, you can shoot me an email via my profile, or send an email to tips@wisebread.com and let them know to forward it on to me!  Thanks!

Guest's picture
Guest

How I made money is over "Free after Rebate" on Amazon, mostly yearly update software. For example, two months before Norton 2009 is out, Norton 2008 must have a huge price cut, combining coupon and it becomes free! You load them up with your home addr, your work addr, your parents addr to break the rebate limit. Then you list these things out on eBay once the promotion is over.

Another example is TurboTax and TaxCut. The biggest discount you can get is around Thanksgiving. The publisher desperately wants to cash in early profits while the majority folks are not in the tax mood. You usually can see deals like buy TurboTax get a free Norton and a free Quicken. Guess what? You load them up and sell in February!

Guest's picture
Bruce

Finally figure out those Amazon Final Fees. Now you can download an excel sheet to calculate your selling prices, with those Amazon fees by margin percentage or gross profit dollars. Download the Amazon Pricing & Profit Calculator Excel sheet. Perfect for the beginner to Amazon Marketplace.

Guest's picture
Pablo Graham

Actually, I was a bit surprised, when I learned that Amazon was selling cotton socks.I buy from Amazon re-sellers all the time. I haven't had any more (or less) problems with them than I've had with any other internet vendors.

Recently I came to know that there is a website named AmazingWatcher.Com which is a free website that will “watch” items for you on Amazon and let you know when amazon has them in stock at regular retail price.It got so awesome!
Good luck everybody!