| Book sellers that list books for a penny on Amazon | | | | The last cost would simply be labor. They have to |
| either do this for a profit albeit a very small profit or | | | | pay their employees to actually do the work of |
| to simply dump a lot of extra books hoping to | | | | picking, packing and shipping or buy a machine to do |
| recount for a small portion of their initial investment. | | | | it for them. Type into Google "automatic packing" |
| If they are simply wanting to get rid of extra books | | | | and you will see what I mean. |
| that are remaining in their warehouse, they can easily | | | | Weight |
| do this by essentially giving away their books. They | | | | Weight is the final consideration they have to look at |
| will lose money but at least they won't be losing as | | | | as a book that weighs only a few ounces can be |
| much as what they would by letting them sit in a | | | | sent first class mail from the USPS and will have a |
| warehouse somewhere. These sellers are typically | | | | considerable price different in shipping cost. |
| very large volume sellers that hire people to pack and | | | | Example |
| ship these books and do it on a mass scale. | | | | BIGSELLER is able to get a book for free from a |
| These sellers have a number of things that have to | | | | library and the book only weighs 8 ounces. |
| look at before deciding to list and sell books at a | | | | BIGSELLER wants to list this book on Amazon and |
| penny. These considerations are cost and weight of | | | | the lowest price is going for a penny. BIGSELLER |
| the book. The seller will need to evaluate packaging | | | | decides he wants to get rid of this book so he lists |
| costs, shipping costs, Amazon commissions, inventory | | | | for a penny. BIGSELLER makes the sale and Amazon |
| acquisition and the cost of labor to pack and ship the | | | | credits him $3.99 for shipping and the full price at |
| book. They will also have to consider the weight of | | | | $0.01 which makes BIGSELLER $4. Amazon has to |
| the book because even with mailing discounts if the | | | | have their cut so Amazon takes their mandatory |
| book weight 10 lbs, there is no way to make any | | | | $1.35 and 15% commission on a penny which is |
| money at all! In the next few paragraphs, we will | | | | nothing that gives BIGSELLER $2.65 for this book. |
| concentrate on the sellers that are trying to make a | | | | BIGSELLER buys thousands of bubble mailers from |
| profit and not on the seller wanting to simply dump | | | | BIGSUPPLYCOMPANY for a a nickel, packing tape for |
| some inventory. | | | | $0.50/roll and printer paper for the packing slip close |
| Cost | | | | to one cent. Throw in the bubble mailer, one strip of |
| A seller has to first look at the price that they can | | | | tape and a sheet of copy paper and that will be |
| buy the book at which will be their inventory cost. In | | | | about 7 cents so their total packaging material cost is |
| order to make any profit at all, the seller will have to | | | | $0.07. |
| essentially get the book for free somehow or a few | | | | BIGSELLER also ships out hundreds if not thousands |
| cents so let's assume that the seller received the | | | | of books at a time and the USPS loves them for it |
| book from a library that was giving books away they | | | | so they give BIGSELLER a huge discount on the |
| didn't want anymore. | | | | already cheap media mail rate, which, on a 8 oz book |
| The second cost a seller needs to look at is the | | | | is about $1.50. |
| packaging cost. I can buy a bubble mailer in quantities | | | | BIGSELLER also has an automation machine that |
| of 100 at around $0.33/piece. Imagine a huge | | | | packs a million books a day so this is simply another |
| mega-seller buying tens of thousands of bubble | | | | quick pack for it. |
| mailers. My best is the cost would be a nickel or less. | | | | Let's recap these costs. |
| A third cost would be Amazon commissions. Amazon | | | | Revenue: $4.00 - Amazon Commission: $1.35 - USPS |
| charges 15% commission on the price of the book | | | | Shipping: $1.50 - Packaging Material: $0.07 - Inventory |
| which would be nothing on a penny book. That cost | | | | Cost: $0.00. |
| is out. However, they also charge $1.35 on all books | | | | If you do that calculation, you'll see that BIGSELLER |
| probably because of that very reason so the total | | | | came out with a profit of $1.08. This is just one |
| amount given to Amazon is $1.35. They obviously pay | | | | simple example of how a seller could make a profit. |
| for the Pro Merchant account with Amazon so they | | | | There are hundreds of different variables that go |
| don't incur the $0.99/book charge. | | | | into it, but you get the idea. |
| Another cost would be the shipping cost. This is | | | | I hope that this explained a little bit about why there |
| where the mega seller shines. They can get a bulk | | | | are books selling for a penny on Amazon. There is |
| mail discount from the USPS. Check for their "bulk | | | | hardly no profit to be made selling books in this |
| mail" rates. These discounts can be as deep as a | | | | fashion, but you have to think in terms of hundreds |
| dollar off each book, which is considerable considering | | | | or thousands or books, hundreds of dollars can be |
| media mail is already very cheap. | | | | racked up very quickly. |