Literary Arbitrage

Michael Savitz describes his business in a Slate column:

I make a living buying and selling used books. I browse the racks of thrift stores and library book sales using an electronic bar-code scanner. I push the button, a red laser hops about, and an LCD screen lights up with the resale values. It feels like being God in his own tiny recreational casino; my judgments are sure and simple, and I always win because I have foreknowledge of all bad bets. The software I use tells me the going price, on Amazon Marketplace, of the title I just scanned, along with the all-important sales rank, so I know the book’s prospects immediately. I turn a profit every time. …

My scanner lies at the end of a cartridge that is fitted into a Dell PDA—a species of technology now obsolete for nearly every purpose but this one. Anyone with a smartphone can scan barcodes on books, but these people aren’t the competition, exactly. Smartphone scanner applications, which interpret photographic images of barcodes and then look up the corresponding products on the Web, work too slowly to be tools for the professional. With the PDA and laser scanner, I work at the speed of the retail cashier. …

My PDA shows the range of prices that other Amazon sellers are asking for the book in question. Those listings offer me guidance on what price to set when I post the book myself and how much I’m likely to earn when the sale goes through. The scan happens fast and the prices are stored locally, in a database that I download onto the device from a third-party company. If, according to the settings I’ve plugged in, a book is sufficiently valuable, the program shows me a green “BUY” bar across the top. If it’s a dud, I see a red bar: “REJECT.”

When I first started this work, I would wake up every morning with fingers stiff from prying apart books in order to get a better look, and a clear shot at the barcode. On average, only one book in 30 will have a resale value that makes it a “BUY.” One man’s trash is, of course, nearly always another man’s trash. When I find a good one, I get a little feeling of violent achievement, and I hide the book away immediately. (Sometimes resellers will carry blankets around to throw over their piles of treasures.) …

If I can tell from a book’s Amazon sales rank that I’ll be able to sell it in one day, I might accept a projected profit of as little as a dollar. The more difficult a book will be to sell, the more money the sale needs to promise. You learn to let your eyes be drawn, when you go through a shelf or pile, to those superficial aspects of a book’s exterior that communicate value. Is it shiny—newish? Do the fonts feel contemporary? Is it well-designed, and therefore marketed to people with taste, and therefore expensive? You can almost always judge a book by its cover. Size also correlates with value, roughly, and so bigger books are more exciting finds. A textbook in its current edition might sell for $100 even in awful shape. You leave alone those recently popular titles whose value has evaporated—any book about George W. Bush, the various boom-time printings of Barack Obama’s two books—and you learn what sort of unknown books are low-percentage shots: pulp paperbacks, kids’ books, anything about the dietary benefits of soy. …

There is competition in the used book game because it is actually possible to make a living doing what I do. I see my adversaries packing their hauls into decent cars, sometimes with the help of family members. A good load of books found all of a sudden might be resalable for many hundreds of dollars. With diligence, someone working alone can make $1,000 per week; with a more insane commitment, or with the help of a wife or child, the business might yield more, especially once a sizable inventory has been built up.

If it’s possible to make a decent living selling books online, then why does it feel so shameful to do this work? I’m not the only one who feels this way; I see it in the mien of my fellow scanners as they whip out their PDAs next to the politely browsing normal customers. The sense that this is a dishonorable profession is confirmed by library book sales that tag their advertisements with “No electronic devices allowed,” though making this rule probably isn’t in the libraries’ financial interest. People scanning books sometimes get kicked out of thrift stores and retail shops as well, though this hasn’t happened to me yet.

This business model seems to be a wholesale, textbook violation of the Biblical prohibition against אונאה. A vendor may certainly offer his inventory at below-market prices, provided he does so knowingly, and this is commonly done for a variety of reasons: the products may be sold as loss-leaders or promotions, or the merchant may need immediate cash flow, or need to clear up warehouse or showroom space. The crucial condition, though, is that he must be aware of the market price and deliberately decide to sell for less. אונאה is, fundamentally, a protection against unintentional overpayment or underpayment, but does not apply where the injured party acts with full comprehension. But while the exact definition of “full comprehension” is quite tricky, this is irrelevant to our case, since the sellers are generally not offering the books at cheap prices for any particular reason and with an accurate knowledge of the going prices, but merely out of ignorance of the latest, most precise pricing data. This is exactly the situation in which אונאה applies: a buyer with superior knowledge who is taking advantage of a seller who knows less than he.

It may be argued that given the existence of the Internet and the ready availability of bar code scanners (Savitz uses this Socket CFSC 5P model), any bookseller who neglects to obtain good pricing data automatically forfeits a claim of אונאה, by analogy to a buyer who fails to show his purchase to a תגר within a reasonable time. I do not find this basic argument plausible, however, and moreover, the period of עד כדי שיראה לתגר only begins from the moment of the sale – a seller may in general claim אונאה even though he could have shown the item to a תגר before selling it. [Exactly why this is so is an interesting question.]

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4 Responses to Literary Arbitrage

  1. Shalom Rosenfeld says:

    R’ Hershel Schachter says he’s heard of used-Seforim sellers who will go to a shiva house, look through the bookshelves, and tell the grieving family that the books are worth barely anything, but he’ll make them a great offer …

    Certainly you could have a situation whereby a library doesn’t have the time or energy to go through all the books, so they agree to sell the bundle to a bookseller to go through on his own; it’s understood that the bookseller will then make a profit by poring through them, which is fair as he’s hauling and disposing of them. So if he buys a truckload of books for $1000, and can then resell a subset of them for $1100 total, I’d assume that’s considered fair business? What price differential would constitute ona’a? If he finds a rare book in the truckload worth $200? $500? $1000 or more? Is the library selling the truckload with the understanding that the bookseller could find something rare and valuable?

    • Yitzhak says:

      It is certainly generally assumed that the permissible wholesale price of an item is independent of its retail price, and I’d certainly therefore agree that a buyer who’s taking a large lot need not be concerned over the fact that he’s getting a better deal than if he purchased each book individually at its fair price.

      As to the question of the buyer finding unusually rare and valuable books in the lot, one starting point might be the Halachos discussed in SA HM 209:1-2:

      המקנה לחבירו דבר שאינו מסויים אם היה מינו ידוע אף על פי שאין מדתו ומשקלו ידוע הרי זה קנה ואם אין מינו ידוע לא קנה

      כיצד ערימה זו של חטים אני מוכר לך בכך וכך מרתף זה של יין אני מוכר לך בכך וכך שק של תאנים אני מוכר לך בכך וכך אף על פי שאין מדת הערימה ידועה ולא מנין הקנקנים ולא משקל התאנים ידוע הרי זה ממכרו קיים אף על פי שנמצא חסר או יתר על האומד שהיה בדעתם ויש להם אונאה לפי שער שבשוק

      אבל האומר לחבירו כל מה שיש בבית זה אני מוכר לך בכך וכך וכל מה שיש בתיבה זו או בשק זה אני מוכר לך בכך וכך ורצה הלוקח ומשך אין כאן קנין שלא סמכה דעתו של לוקח שהרי אינו יודע מה שיש בו אם תבן או זהב ואין זה אלא כמשחק בקוביא וכן כל כיוצא בזה:

  2. Shalom Rosenfeld says:

    “I’m hereby buying this box with mysterious contents.” — An interesting starting point, but obviously not an exact parallel. Here buyer and seller know and agree it’s a truckload of books, just a question if the books turn out to be special. But they’re still books!

    • Yitzhak says:

      I agree that it’s not an exact parallel, and I meant it merely as a starting point. A careful reading of the commentaries may shed light on your situation.

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