Revisiting Books - Are They Necessary?

Looking back at a common piece of advice for new sellers

Welcome back!

This topic was inspired by a Twitter thread I wrote last week (click here), where I talked about the bare minimum costs for starting an arbitrage business. I determined that if you want some wiggle room to test your first few products, you would need around $450 - although an experienced seller could probably start over with less.

After looking back at my experiences with selling books and then transitioning to other products, I thought about a common piece of advice that many Amazon sellers give to newbies - “Start by selling used books”. It’s not bad advice by any means, but it made wonder if you really need to go down that route to become a successful Amazon seller.

The Upsides of Starting With Books

There are some benefits to starting with used books, which is why it’s common advice in the Amazon space. Firstly, used books in your local area can be bought for very cheap (usually $0.50 - $2.00). These low cost inventory purchases allow you to learn the ropes of selling on Amazon without a lot of investment - not to mention the dopamine hit you’ll get when that book you bought for $2 sells for $25.

A big barrier to entry when it comes to arbitrage is the process of getting ungated - you have to spend anywhere from $30-$200 to sell in a specific brand / category if Amazon decides to restrict it for new sellers. Another advantage that books have is you’re typically ungated for most publishers, the exceptions being textbook publishers like McGraw-Hill that have had issues with counterfeiting.

The final upside I can think of for selling books specifically has to do with account health. With the exception of one publisher I’ve heard about (I won’t be naming them but they deal with medical books in the $500+ range so don’t worry about it), IP / authenticity complaints aren’t really a thing when it comes to selling books. If you end up on a brand’s bad side, they can put you through the wringer and slow down the growth of your business.

Why You Should Consider Skipping Books

The more I thought about it, the more I realized that the well-intentioned advice of “start with books” may not be as good as I thought it was. There’s nothing inherently bad about starting out this way, but given the context of my audience and the type of people on this side of the internet I now believe that books aren’t necessary if you’re serious about succeeding with arbitrage.

It is true that starting without books requires a larger capital investment, but the truth is that extra investment isn’t that much. Like I said, you can start an arbitrage business with just over $400. I imagine the people who read (or will eventually read) this Substack have at least $400 to invest into their first business - most of you are likely not 16 year-olds looking to start from the very bottom.

Getting ungated in the major categories like Grocery and Beauty should cost you less than $100, and those ungates alone should open up tens of thousands of items that you can sell right out of the gate. Not only that, but as you build up a larger selling history you’ll be automatically approved to sell more brands. Even as someone who’s been selling for almost 2 years, Amazon is still slowly giving me permission to sell brands I wasn’t able to before (e.g Dior).

The last reason I’m starting to think books are overrated for beginners is cashflow. In this business model, the amount of money you make depends on how many times you can turn your inventory over. You could get 100% ROI on a book after waiting 6 weeks, but in that same amount of time you could’ve sold 50 units of a beauty product at 30% ROI and use the profits to buy another 50 units + test another product. Volume is a very important part of selling on this platform, because it’s very difficult to consistently find high ROI items that sell quickly.

What Should You Do?

After writing this post out, I’ve determined that the path you should take depends on which of these categories you fall into:

• Someone who either has no money or wants to prove the concept before making a larger investment

• Someone who has the capital to invest and wants to grow an arbitrage business as fast as possible

For the first group, I think books are still a solid option. If you fall into the second group though, you should be fine to hit the ground running. As you learn and reflect on your experiences, your opinions start to change. I’ve come to the conclusion that if you’re serious about this, pay for those ungates and start grinding - you’ll be glad you did.