HI New Sellers - and anyone else who is confused and wondering "Why do people sell books for a penny?  How do they make any money?"

As an homage to Caramora, the originator of this thread - I would like to include her post here:

About twice a week a question is posted here as to why people sell books (or other items) for a penny. They ask, "How can sellers make any money on it?"

Many of us have answered this question countless times, but none has answered better and clearer than Tom Stabler did back in April, so I am reposting his answer to this question here.

Any other penny book commentaries can be (re)posted here too. I might dig up a few of mine and repost them here as well (if I've added further comments in them to questions about penny selling that some up all the time.) Others may want to do the same.

This does seem to be a question that everyone has at one time or another.

Caramora

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Tom Stabler's post:

This question comes up about every two weeks, and there are lots of threads discussing it.

(Updated numbers included. Tom feel free to tweak this if you'd like)

((Updated again to reflect changes 05/14/07))

In brief:

A seller lists a book for $.01

Amazon collects $3.99 from the buyer and gives $2.66 ($.01 + $2.64 shipping allowance) to the seller.  (The $1.35 'closing fee' is subtracted from the shipping allowance by Amazon)

The seller is a ProMerchant, so doesn't pay the $.99 fee (but does pay $40 per month to be a ProMerchant).

The 15% fee on 1 cent is zero.

The seller pays $2.31 or $2.65 in postage for a 1 or 2 pound package (or less, if it is very light weight and can go First Class.  Much less if the penny seller is high volume and uses Bulk Mail).

The seller cost for the book is zero, because he got it for free somehow.

The seller used recycled packing materials, so those cost nothing, too.

The seller ends-up with $.35 (if it's 1 pound media mail) profit in a domestic shipment (a bit more if it's mailed using Bulk Mail).

The seller is happy with his "profit".

Amazon ends up with $1.35 from the shipping.

Amazon is even happier than the seller.

Tom

-------------------------------------------------------

An add'l money saver for the large volume sellers is to use Bulk Rate Mail, which can lower their shipping cost to approx .80 per package.  That is for *large* operations though, the number of pieces mailed at one time are in the hundreds.

Please add relevant information if you have it, or relevant discussion about penny books.  

Please also remember that people who sell penny books are sellers who have simply selected that as their business model.   Hating on them and arguing like mad here is not the purpose of this thread.   I don't happen to be a penny seller, but I see the value in having this thread for informational purposes and I wish all sellers the best no matter which business model they are using.

If this thread prompts other issues that you'd like to discuss, please start a new thread for those.  It will help if we can keep this one clean and narrow it down to penny sales discussion.

Happy Sales,

:>  earthmom

Please also remember that people who sell penny books are sellers who have simply selected that as their business model.   Hating on them and arguing like mad here is not the purpose of this thread.   I don't happen to be a penny seller, but I see the value in having this thread for informational purposes and I wish all sellers the best no matter which business model they are using.

If this thread prompts other issues that you'd like to discuss, please start a new thread for those.  It will help if we can keep this one clean and narrow it down to penny sales discussion.

You might want to change the amount collected from buyer to $3.50 (one cent plus $3.49 shipping/handling). -

And you might want to delete the "scrounged packing materials" line.  Or change it to, "The smart penny sellers minimize their costs of packing material as much as possible."  (On the other hand, I admit to using recycled bubblewrap and cardboard sometimes, so maybe I shouldn't object to "scrounged" -- it just sounds like I'm using ugly stuff.  lol).

Earthmom,

Hi.

The one thing I would add is that some penny sellers do not pay the same rates that we pay for shipping with the USPS. A seller once asked me how a book that weighed 4 lbs. with its packing materials could be sold for a penny. I explained that some penny sellers can access bulk discount rates by sorting their packages each day and having a volume of over 200 or 300 pieces a day, depending on which discount rate and class they are using. The 4 lb. book could be sent for as low as $1.41 via Discount Bound Printed Matter. So, volumne discounts play a role here.

Ciao!

YOU ARE NOT UP TO DATE REGARDING .99 CENT FEE EXCLUSION

If you're a Pro Merchant you don't pay the .99 per sale fee.

Lol.

I think you should go ahead and add a Grishman paperback, a Danielle Steel paperback and a Mary Higgins Clark paperback.

Perhaps a bit of an artistic boarder around the post. Lol.

null per barb's excellent suggestion