Selling Penny Books on Amazon.com and why it doesn’t work

Sometimes, we see a deal we think is too good to be true. I have had a business on Amazon.com for over a year now and I keep coming across a very strange and seemingly unprofitable business model for selling books. I wrote this article for my myspace site and I then I posted it on the amazon.com forums. I have yet to find a convincing rebuff to it. No one can quite explain why selling books for a penny is a good business model. They also fail to calculate additional costs into their bottom line. They fail to include costs of packaging per book, travel to the post office, etc. I would be interested to know what my readers think.

Dear reader,

    As  a bookseller on Amazon.com my goal is to provide my customers with a good book at a reasonable price. It is also my responsibility to get their book to them in a timely manner and in the condition it was described. However, like anyone who runs a personal business the major goal is to make a profit. I do make a profit, but I often price my books as low as I possibly can to still make a profit and offer the customer a good deal. The question in my mind is how much of a price cut is too much…. perhaps charging only a penny seems a bit ludicrous? Read on to find out what I mean….      

   As a book seller I have often been taken aback to find people selling the same book I had wanted to list for a single penny. Seriously, $.01. Wow, I figured to myself how do they make a profit? Chances are they don’t. Every seller gets a $3.99 shipping credit from a buyer for standard shipping on books. So if I sell a book for a penny, one which did not cost me a penny, but more likely in the range of  $1.00 – $5.00, depending on the source and quality of the book, I am now up to $4.00 from the buyer. Amazon.com charges a $.99  closing fee plus 15% commission. After the math is done there, Amazon gets 1.59 from the sale, leaving the seller with $2.41 in profit.  Now the seller has to mail the book to to the buyer. USPS media mail rate seems to be the best method for standard shipping requests. If a book weighs one pound and 2 ounces, for example, the cost of postage is $2.47. This means the seller is now at ($ 0.06), they just lost money on their sell. This of course  is not including the cost of the book for the seller, the gas spent to go to the post office, or the time to list and package the item in the loss. Therefore, the loss is ostensibly more than six cents. 

      Not only are these sellers not making a profit from each book, they are also, nine times out of ten, not providing an accurate description of the text they are sending you. All you might get is that it is ex-library, or even, and I swear I have seen this more than once, you will receive the best copy available. What does that mean? I have also purchased many books on amazon.com. I always avoid the one penny sellers because in my opinion, and from a seller’s point of view, something just doesn’t seem to be right about that price. As a seller I would never sell a book that did not make me a profit. I am certain that as a buyer I would not want to purchase something I have never seen and don’t know the condition of.  Why would I spend my money on something that appears wholly untrustworthy? As a seller I caution you as a buyer of books to think twice before you jump at the penny price tag…Beware you might be getting the bad end of the deal.

BOOKS FOR A PENNY? TOO GOOD TO BE TRUE!!!!

I welcome comments or explanations as to how a seller can get away with losing money in their book selling business. The only thing I can think of is they make it a tax write off, but still numbers just don’t seem to add up.  

Very Truly Yours,

A Book In Time