By: Teri Bernstein
one entrepreneur's method for profit from used books
"Arbitrage" is a Wall Street word for selling assets (or companies) at a profit at almost the same moment you are buying them at the lower price. The Planet Money episode linked below highlights two entrepreneurs who have applied the concept to used textbook buying and selling on a grand scale. Wildly divergent prices create an opportunity for profit. They call it a "guaranteed" way to double their investment. There is a built-in market for textbooks, and the market is predictable--the schedules of classes describe the market size. The textbooks are very expensive, and the price is very volatile, as the price rises at the beginning of each semester. Editions are current for about three or four years. The entrepreneurs used computer data to find out which textbooks were the most lucrative.
The market is changing somewhat for textbooks that have current online content. And more people are getting into the market. But the opportunity exists for those willing to do the research and can manage the logistics.
Source: "Episode 581: Free Money" by David Kestenbaum and Jacob Goldstein, NPR: Planet Money, October 18, 2017. (podcast)
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