Looking around Amazon, I’ve noticed many sellers selling their items for just a few cents or less than a dollar. Just look at the things this person is selling. Many of the books are only a penny! But what I want to know is, what does the seller get out of this? When you pay through Amazon, the seller doesn’t get your credit information, so that can’t be the catch. The only thing I can think of is shipping prices are high, but even if they do profit a buck or two off shipping, that still can’t be worth it. So what’s the deal with this? And is it safe to buy these penny books?
Shipping is probably the point. Amazon charges the customer $3.50 to ship any marketplace book - this is above the actual rate most books can be shipped for (media mail rates are $1.59 for the first pound).
I know of sources for books in the .25 cents each range. If I can sell it for .01 +3.50 s&H when shipping costs me $1.59 I make almost $2.00 per book.
How many books could you stick in a padded envelope and address in an hour? For a small investment Say $200 one could easily have all of the equipment needed and 300+ books to start with. Carefully turning over said funds into more stock could put you in the internet book business part time in a year or so. Assuming sources hold you might be able to make an easy $3K-$4K a year just reselling such books. Push the envelope a bit and you could go full time $30K or so a year. Granted, thats moving around 40 books per day. 2-3 hours work. Not too shabby.
Slightly off topic, but you see similar stuff on eBay…Price $1 Shipping and handling $40.
eBay’s listing fee is based on selling price, and shipping is not considered. Thus selling cheap and making it up on the shipping saves the seller significantly on listing fees.
Don’t forget to factor in Amazon’s cut. I don’t know how much they make on each sale, but I’m sure they’re not running Marketplace sales for free.
To give a concrete example:
I’m selling my old comic collection piecemeal on eBay. I usually sell in lots of 6 books, with a minimum bid for the lot of $0.99, for which eBay charges a listing fee of $0.20. (Which is their minimum listing fee.) When a lot sells eBay charges a final selling value fee, which is about 5%. And to make it easier to take money from people who want to use credit cards I use PayPal - which is another (rough estimate, I’m not going to go into the full formula they use.) 8%. So, if a lot sells at the minimum, I’ve just spent about $0.33 to get $0.99. Not very pleasant for me, is it?
Then we get into shipping and handling:
Because six comics usually weigh less than a pound, shipping is (as mentioned) $1.59 for media mail in the US, plus $0.14 for delivery confirmation. I use bubble mailers to protect the comics as I ship them. These cost me about $0.50. For accounting purposes, let’s assume that other supplies I’m using (ink, tape, and wear on printer/computer) is another $0.50 of cost. So, if I were feeling altruistic, I could ship for as little as $2.59, and not lose money on the shipping.
Since I’m not that altruistic, I charge $5.00 S&H for a single lot.
As you can see I’m making more off shipping than I am off my merchandise.
Now, my stock, at the moment is coming from a source that I don’t feel the need to account for purchase costs at the moment - I bought the comics years ago, and got my money’s worth in entertainment then. I kept them because I knew that some might accrue in value (and until the bubble burst, they did.) but it wasn’t an investment, per se. Now that I need liquid cash, they’re a means I can use to generate S&H charges.
If you look around on eBay, though, you can find a number of resellers offering to sell to other people large lots of various items - CDs and DVDs are common, where the reseller offers a lot of 100 ‘B’ list items (Two year old items, or so) for about $100. They’re buying in bulk from the distributors, who are clearing off old stock that isn’t selling well in the retail marketplace, and hoping to make their money off people like me who make their profits on S&H.