When I buy used books on Amazon, I sometimes get bids of 1 cent from various book sellers. How and where can they possibly make their profit? Since their book is practically free, I feel suspicious about buying from them.
Maybe they think of it as charity, like www.bookcrossing.com which is even cheaper, and a completely different system. But sort of the same idea, I guess.
Most likely, it’s caused by unrealistic shipping charges. I don’t remember how much shipping costs if you order a book from one of Amazon’s sellers, but it’s almost certainly more than it takes to actually ship the book via Media Mail (which could take three weeks to arrive).
A couple of reasons. One, as Mikahw pointed out, is that Amazon charges a standard fee for shipping books sold by third parties. That fee is about $2.50 or $3.00. After paying postage to send an average-sized book media rate and Amazon’s commission, you’re left with about 65 cents. If you’re getting the packing materials and the books pretty cheap, you can indeed make a little bit of money selling a book for one cent.
The second reason is that when a lot of people want to sell the same book on Amazon, they start getting into price competition with each other. The first guy offers for $10, the next guy undercuts him by a miniscule amount – five cents or something. The upshot is that books that a lot of people want to sell – for example, last year’s bestsellers that are flooding the used book market – get really really cheap on Amazon.
Ironically, the one-cent offers are probably some of the most reputable ones out there, because they tend to be from the big book sellers, because that’s who the economics of selling one-cent books work out for the best. They probably got the book as part of a bulk purchase from somewhere, and it’s better to sell it even for a tiny bit of profit than it is to leave it around their warehouse.
If you’re curious about whether the seller is on the level, check out their feedback rating. A seller with several hundred or several thousand (or even a few dozen) positive feedback entries is probably a safe bet.
shipping charges, as others have said. Using media mail to send a paperback anywhere in the US is $1.42 on the USPS domestic calculator. Considering that they may charge $3.50 for shipping that is $2 for packaging materials and handling and $1.50 in profit. Even with commissions it is still $1.20 or so, which is a better profit than they’d make selling it on the shelf for $1.
Many small used bookstores I have been to sell paperbacks for $1 or $2, so selling a paperback via the internet for $0.01 and charging $3 to ship it when it only costs $1.42 for shipping and $0.30 for packaging is actually a higher profit margin than selling it in store for $0.99
Earlier thread, nothing terribly different than this.
There is also a tendency of people to buy more than one book from a seller.
So after buying this 1 cent book, many people say to themselves “I should buy those other 2 books I was considering from them, too. They’ll be shipped together, so I’ll save on the shipping.”
Happens often enough to be worthwhile in business in general. Just like many stores advertise “loss leaders” to get you into the store, assuming you will purchase additional items once there.
I’m not quite clear how this works. So what if I buy 10 1 cent books from a seller? Do I get charged $3 shipping or $30 or somewhere in between? If $3, then the seller would make a loss, If it were $30, then I wouldn’t save any on shipping.
I own a bookstore, and decided to sell some of my used books on Amazon (I’ve since pulled them all and moved to ABE–a much better environment for sellers).
I noticed that many of the one-cent books are hardbacks. Despite what many of the people posting here have said, sellers frequently lose money on shipping. How? Amazon may charge the buyer over $3.00 for shipping, but they take a cut of it, and only send the seller $2.26. Wesley Clark quoted the media mail shipping rate of $1.42. That’s for books under 1 pound. Many of these hardback bestsellers weigh 2 or 3 pounds, and Amazon doesn’t up your shipping allowance for heavy books. For a two-pound book, it costs $1.84.
So, if I sell a two-pound hardback on Amazon for one penny, I receive $2.27 from Amazon. I pack up the book in a padded mailer (the large ones cost me about 55 cents each in bulk), and pay $1.84 in postage to ship it. I just received $2.27 for a book it cost me $2.39 to ship! So I lose 12 cents and I still have to put the work into typing the description, listing the book, packing it, and taking it to the post office.
I can understand selling the used paperbacks for 50 cents. Many sellers wrap those in a standard (non-padded) envelope and end up making a buck.
But why, oh why, do people sell big, fat hardback books for a penny and lose money on every single one?
I’ve been swindled on one of those one cent things.
Tried to purchase a poster, & got rooked. No poster ever showed. :mad:
Amazon got a lot of complaints over these guys.
Eventually, Amazon itself sprung for my refund.
What happens is that people usually don’t buy just the 1 cent books. They buy a couple other books, at regular prices.
Just like when grocery stores run a special on milk. People come to the store to get the cheap price on milk, but most of them also buy other groceries while there. So even if the store loses money on the milk, they make up for it by increased sales on other items.
That doesn’t apply when you’re buying used books through Amazon, because you’re typically buying them from a variety of different people. Amazon makes plenty of money on each, but you can’t combine the shipping. Anyone selling a big hardback book for a penny loses money in that scenario.
There is a good explanation here http://pacifictrailbooks.com/Blog.aspx
If you buy 10 one-cent books through Amazon, you’ll pay $2.99* shipping for each book, making a total of $30 for the ten books. If you click through to the seller, you may get a different deal.
*the price the last time I bought through Amazon consignment
Volume!
But, ultimately, they manage to get materials and postage for less than what you pay. If you buy 1,000 padded envelopes, they’ll cost less than if you buy then at Staples. You say they’re 55 cents – if they can buy them at 40 cents, they make a 3 cent profit. If they can get them for 25 cents (or use cheaper mailers), their profit increases.
I sell used books on Amazon.
The current shipping charge for 3rd Party sales on books is $3.99. So a one-cent book costs the buyer $4.00.
Amazon charges the seller a closing fee of $1.35. If they are not paying a monthly subscription fee of $39.99, Amazon charges an additional per-sale fee of .99.
This is in addition to a 15% commission (15% of one cent cannot be collected).
So the seller will get either $2.65 or $1.66 on every penny book sale. That hardly covers Media Mail shipping. Any given seller will lose money on a one-cent sale. If they are a big enough business, the loss on this sale might be less than they would need to pay to dispose of it. Maybe.
If they are a small seller, they will be on the Amazon seller support message boards complaining that they cannot make any money. Some things are not worth selling on a given on-line venue, even if they see other people selling them.
Amen to that one.
I sell on Amazon, under the name Bosda, & I won’t peddle anything for less than 5.95.
I’d lose dough.
I bought a couple of these 1c books recently, both from companies that sell other second hand books at higher prices. They were fine. They came quite as promptly as other second hand books I’ve ordered this way and were in decent condition. As has been said, Amazon charges a standard $3.99 shipping and handling price for all third party secondhand book sales, so I actually paid $4 per book, but it was still a great bargain.
How it is worth it to the sellers I do not know, but I do not think buyers need to be particularly wary. Amazon are pretty good about refunds, anyway (another, secondhand book I ordered through them recently, for a few bucks, did not arrive, but I got a full refund of cost+S&H without any hassle).
Regarding the big hardback books being sold for £0.01 (or $0.01), remember that, in the UK at least, people who send out lots of mail can pay for an account with Royal Mail that means they pay a flat (discounted) rate per package based on average weight (average being taken over a long period of time, like a month I believe). So if they sell mostly paperbacks with the occasional big heavy coffee-table book, they are still only paying a little bit more than if they were selling just paperbacks. I assume the US postal services offer a similar service.
That’s the way it was explained to me, anyway. I sell on Amazon but mostly CDs, for which buyers are charged £1.24 postage. It usually costs 96p to send a CD by first class post, although of course Amazon take their cut of the selling price which means you’d still be out of pocket seelling for less than about 50p.
Books are a different matter - the Amazon postage price is £2.75, which only covers books up to 750g. Again, though, Amazon’s commission means you get a lot less than £2.75 in total if you sell for 1p. Sellers need to take account of this when setting their prices, and a lot of new sellers end up losing money by selling heavy books too cheaply.
Even if they don’t have such a system, if they sell a lot of books, the costs of the hardback will be offset by the profit on the paperbacks.
If you don’t find that to be a satisfactory explanation, then yours doesn’t work either. The only thing that matters is whether they get a lower rate at all, not that they pay an average, as that would be a higher price on the paperbacks.