Reselling Used Books Is Basically Running an Index Fund (Except the Margins Are Obscene)

Diversification, compounding, winners that erase losers, bets grounded in history. The portfolio lens works — right up until the point where it completely falls apart.

Disclosure: I’m the founder of BiblioScan, a book-scouting app I mention a couple of times below. This is a piece about how I think about the business, not a pitch. Figures are in euros because I sell in France, but the logic travels.

A few months ago, repricing my stock on a Sunday night, a strange thought hit me: I’m doing exactly what a fund manager does. Hundreds of open positions. I know the “past performance” of each one. I place bets on the future. And every month a small slice of the portfolio liquidates while I reinvest the gains into new lines.

The more I sat with it, the more the parallel with an index fund jumped out. And the more I sat with it, the more I also saw exactly where the parallel breaks. So I wanted to write it down, because it’s a lens that changes how you approach this business, especially early on, when you think book by book instead of thinking in terms of a portfolio.

Spoiler for the finance purists: no, it’s not really an index fund. I’ll get there. But the starting intuition holds up.

The principle: betting on past performance

When you buy a share of an S&P 500 ETF, you’re not betting on any single company. You’re buying a basket of hundreds, trusting that historically the whole thing goes up. You don’t know which one explodes and which one sinks. You trust the average, and time.

Flipping used books runs on the same instinct. When I scan a book, I look at its history: what it sold for over the last 12 months, how often, at what price. Then I place a bet: what sold yesterday for €80 will probably resell tomorrow for €80.

The line you’ll find in both worlds is the same. “Past performance is no guarantee of future results” is the warning stamped on every financial product, and it’s also, word for word, the reality of my stock. A book that was crushing it six months ago can turn unsellable because of a new edition, dead hype, or ten other resellers having the same idea I did. History informs the decision. It never guarantees it.

The difference: I don’t passively absorb the market average. I pick my positions from the data. And that, right there, is already not quite indexing, more on that at the end, because it matters.

The real magic: the snowball

This is the heart of it, and it’s where the analogy actually gets better than an index fund.

In a fund, you reinvest dividends: nice, but we’re talking 2–3% a year. In book reselling, I reinvest margins, and the margins are obscene next to any classic financial asset. My average sits around €20 net per book, not sale price, but what’s left after the book is bought and fees are deducted. On a book bought for €5. No ETF on Earth does that.

That margin feeds the snowball: I sell a book bought for €5 and collect €25. I reinvest in 5 new books. Statistically I increase the number of books likely to sell, which increases sales volume, which gives me more capital to reinvest, and back to the top, bigger each loop. It’s the exact compounding everyone praises in investing, except the return per cycle isn’t a few percent, it’s several hundred percent per winning line. The only ceiling is how fast you can source and process stock.

A concrete case: the Gabor Maté

To make it tangible, a real recent example. I bought Hold On to Your Kids by Gabor Maté (French edition, paperback, 2005) for €15. Nothing spectacular to the naked eye, a parenting book, soft cover, frankly not sexy on a flea-market shelf.

Except the data said otherwise: real demand, high market price, scarce supply. I listed it. Sold for €95 on Leboncoin, four days later.

That’s +€80 gross margin. A 6x on the stake, in under a week, on a book 99% of people would have left in the box or dumped for €3 to a buyback service. The gap between those two outcomes isn’t luck. It’s reading the right signal at the right moment. Which is, more or less, the entire reason BiblioScan exists, turning a blind bet into an informed one is like having a research desk in your pocket.

Diversification: the winners erase the losers

Now the honest flip side, because I hate posts that only show the pretty sales.

Not every book is a Gabor Maté. Far from it. Every month, roughly 5 to 10% of my stock sells, which means at any given moment the vast majority of my books aren’t selling. Some take months. My average holding time is around 63 days, and that average hides huge dispersion: some go in 4 days, others sleep for six.

And then there are the outright fails. Books I thought were good that never move. Trends that collapsed. Ones I overpaid for. Part of the game. When you start out you make lots of these mistakes, and that’s actually how you learn to read the market, a reseller’s experience is largely measured by a fail rate that drops over time without ever hitting zero.

This is where portfolio logic saves everything. Just as a handful of companies (the Nvidias, the Apples) carry a whole index while dozens stagnate, my big winners erase my losers. One €80-margin book more than covers ten failed €5 books. You’re not trying to be right every time. You’re trying to be right often enough, with margins big enough, that the average comes out solidly positive. That’s the diversified investor’s mindset exactly: you accept individual losses because you’re playing the performance of the whole.

One operational nuance that doesn’t exist in the stock market, though: an index fund needs no maintenance. My stock does. You reprice periodically, drop a book that’s gotten too expensive, pull the ones that went irrelevant. Stock you don’t touch is stock slowly losing value.

Where the analogy breaks (and you have to say it)

I’d be dishonest to stop at the pretty picture. If we’re rigorous, reselling used books is not an index fund. It’s almost the opposite on three fundamental points, and I’d rather name them plainly.

1. It’s active, not passive. The whole point of an index fund is that you do nothing, buy, forget, wait 20 years. I source, scan, store, ship, reprice, handle support. It’s a business, not a dormant investment. Stop working and the snowball stops.

2. I select, so I’m not indexing. An index fund refuses on principle to bet on anyone, it buys the whole market. I do the opposite: I sort, I choose, I bet on specific lines based on their history. What I actually do looks far more like systematic value/momentum investing than indexing. I’m a quantitative stock-picker, not a market follower.

3. Liquidity is a different planet. An ETF sells in one second at market price whenever you want. My stock sells at 5–10% a month, my capital locked in boxes of paper. Need cash tomorrow? I can’t snap my fingers, I depend on a buyer who wants precisely that book. It’s far closer to rental property or watch flipping than to a liquid financial product.

So if I had to file book reselling into a real category, it wouldn’t be “index fund.” It’d be high-margin, low-liquidity alternative asset, same family as watch flipping, wine, or trading cards. The index-fund analogy is useful for the portfolio and diversification logic, not for describing the actual nature of the asset. Nobody does 6x on an ETF in four days. I do, on a Gabor Maté.

What this changes in practice

If you take one thing from all this: stop thinking book by book, think portfolio.

The beginner looks at a failed book and thinks “I lost €5.” The investor looks at the portfolio and thinks “my overall margin rate more than covers my fails, so I keep feeding the machine.” That shift in focus changes everything:

• You don’t need every book to be a gem. You need the average to be good.
• You can afford the occasional blind bet, as long as diversification absorbs the risk.
• You reinvest margins methodically instead of pulling cash out, compounding builds the fortune, not the isolated home run.
• You accept the dispersion: some books in 4 days, others in 6 months, fine, as long as the portfolio keeps turning.

The only real skill, in the end, is reading the signal, knowing before you buy whether a book has real, lasting demand or whether it’s a trap. That’s the exact work I’m trying to automate: replacing intuition with data so your portfolio is made of informed bets rather than impulse buys.

TL;DR: Reselling used books borrows passive investing’s best ideas, diversification, compounding, winners erasing losers, bets grounded in history, but it’s not an index fund: it’s active, selective, illiquid, and far more profitable per line. The right lens is managing a portfolio of books rather than chasing individual sales. Average margin ~€20, 5–10% turnover a month, fails you own, and a snowball that depends only on how well you read the market, and how consistently you reinvest.