WHY PENNY BOOKS? Here's the Answer!

#1

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

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

(Updated numbers include Postage Rate Increase May 11, 2009.)

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 $2.38 or $2.88 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 $.27 (if it’s 1 pound media mail) 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.

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

Re: *** WHY PENNY BOOKS? HERE'S THE ANSWER! (Updated 5/11/2009) ***

Posted: May 10, 2009 11:31 PM in response to: earthmom22
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marilynsattic

[Read] Why Penny Books are an even worse idea for small sellers after May 11th
Posted: May 10, 2009 8:26 PM
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For your average 2# hardcover:

For Non-Pro-Merchants:

.01 + $3.99 = $4.00 charged to customer

$4.00
-$1.35 variable closing fee
-$0.99 non PM fee
-$2.77 postage equals
a loss of $1.11–yes, you are paying Amazon $1.11 to take the book off your hands (and that doesn’t even include shipping envelope, book acquisition costs, or labor)

For Pro-Merchants
$4.00
-$1.35 variable closing fee
-$2.77 postage equals
a twelve cent loss (you are paying amazon .12 to take the book off your hands), and again, that doesn’t include the cost of the shipping envelope, the book or labor.

For a 1# book, it’s only a nominal improvement:

Non-PM:

$4.00
-$1.35 VCF
-$0.99 Non PM fee
-$2.38 postage equals

A seventy-two cent loss per book (paying Amazon to take books off your hands).

PM:

$4.00
-$1.35
-$2.38 equals

A whopping twenty seven cents profit, from which you have to deduct book acquisition cost, shipping envelope, and labor.

ALWAYS RUN THE NUMBERS BEFORE SELLING ONLINE and make sure you know what your bottom line price point is. Otherwise you won’t be in business very long.

#2

bump

#3

Thanks for the information.

#4

they appear to be two different accounts

#5

.

#6

Bump

#7

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#8

Bumping because someone asked this question within another thread on another forum and I told him to come here for an explanation.

#9

.

#10

bump

#11

bomp

#12

bomp

#13

IMO, if you’re doing this cheap book thing, you’re trying to fool someone into believing you are doing something productive, including yourself… get real!

#14

bump

#15

So basically if you’re really patient and live to be 200 you can make a ton of money selling books for a penny…

#16

Can one of you angry at the world individuals instead of “bumping” for the most part inaccurate threads maybe for once do a little research and learn something about how larger companies run businesses.

Your estimates , pricing, and numbers are always never close… And for the love of god just because you see someone with 100k feedback ratings selling a penny book doesnt mean that every book they sell is a penny… If i have a lightweight penny book i can throw it out ( which costs money) or i can list it for a penny and ship it bulk rate and make 50 cents back.

Buying, sorting, scanning 30k books in a trailer comes with yes penny books but also plenty of books where you are making 1000’s % of return on your investment… You do not look at each specific book you look at the pallet or trailer as a whole.

Do you know with not too much aggressive rates i can ship a 1-1.5 lb book that you would pay $4.90 for a priority flat rate envelope i can ship with DHL smartmail for $2- $2.50 for the close zones? and it will take about 1 day more for delivery maybe 2… Now if i have 100 expedited orders a day i can make $2-300 more profit a day just off shipping compared to sellers paying retail compared to someone paying retail prices.

Anything under 1 lb with DHL is 20-25% cheaper than USPS first class prices.

If the book is under 3/4" the shipping can get as low as $1.10- $1.20 if it falls under “flats” the only drawback with that one is no delivery confirmation which now hurts you unfortunately. Someone like betterworldbooks is shipping books under 16oz for probably no more than a dollar if it falls under 3/4"

Shipping international with a broker i can send a 1-2 lb book for $2-$5… I think most people pay flat rate $10+ per book for shipping with usps.

We have priority pack automated machines where we can pack 500+ books for every hour. The material is not as cheap as everyone thinks but it cuts labor costs dramatically. If you want to get even cheaper you just use Polybags where you are paying pennies.

The list goes on and on

#17

Yup, you are the same people that sell a 6 lb textbook for 38 cents. I have a feeling that if the truth were known, you also cheat on your postage. All you are doing is ruining the market for thousands of honest sellers, just to pretend that you have a job.

#18

bump

#19

started by Dr.Scott , a few years back when he was forced to retire (disability from Vietnam). The idea was to establish a business that would be used to fund reading and civil liberty programs of the Franciscan Order he was in (He is a Bishop in an Orthodox -Catholic church.
Homepage [http://www.SCOTTYDOGBOOKS.COM]
Biography Started a few months before hurricane IKE, which destroyed our Office and Warehouse that we were in the process of inventory and listing on Amazon.com (our only vendor then and now). We were advised by a long term player in the Used Book business, that the economy crashing is a cyclical thing and it was a good time to buy books and bookstores, we did and have approximately 100K books that were never inventoried. Then came PENNY BOOKS, which some claim is a Walmart tactic to run the price of books so low no one could compete. It is suspicious that anyone would list 1 cent books that cost far over the penny and shipping ,minus the Amzn fee, and think it is profitable. Unless of course it is funded by Amazn to run the prices into the toilet, There are several suspicious sellers, but one who appears to be a nonprofit (but is not) manages to have a penny book on virtually every book on AMZN. They claim to be raising funds through sales and taking book donations to send to reading programs around the WORLD. Tricky to see how losing money on almost every sale can help provide WORLD BOOKS with anything ? It must be volume… We can’t play in this rigged game, regardless of who is rigging the game (and as a retired Forensic Examiner, I only know what this looks like and smells like, but I have no real evidence of a conspiracy by AMZN or the penny sellers). I do know that some poor new sellers followed the lead and are gone now…we have there books to prove the sad fact that it hurt a lot of little sellers trying to get into a business after losing their jobs. I feel a little guilty that we bought their dream, of having a bookstore, for less than 5cents a book. Now we have inventory that we would rather sell in lots of 500 to 100K rather than pay for climate controlled warehousing. BIG SALE in TEXAS. Maybe a giant penny seller would like to by it all and shut me and a few large sellers who are hopping mad. I will bargain and get out for a reasonable offer. The only other option is to do one last investigation and let the facts speak for themselves. Follow the money, Amazon gets its $1.35 minimum fee plus seller monthly fee and they don’t have to worry about doing anything and they now control not only the bookseller business which the make good money on the backs of sellers who are going bust, but they also control 49.5% of e-comm and M-comm. I think they are brilliant and I buy from them almost exclusively. I don’t think a legal case could be made even if it is market manipulation…Thank You REAGAN! They could be exposed and they don’t have to care what booksellers think, there is no other game in town! Again, I have no evidence and haven’t got the investment in time and money like some other sellers who are suspicious, but need or want real hard proof. I retired from that Forensic Expert investigator world and don’t care to do another case. PLEASE BUY ME OUT!

#20

THERE IS NO POSSIBLE WAY ANYONE CAN LIST PENNY BOOKS ON THE MAJORITY OF BOOKS (isbn"S) AND MAKE A PROFIT —TAKE A LOOK AT THE BIG PENNY SELLER(S) LIKE WORLD… AND A FEW OTHERS .The RIDICULOUS IDEA THAT A FEW CENTS PROFIT COULD SUPPORT SUCH A HUGE SELLER PAYING FOR SPACE, EMPLOYEES ETC…
FOLLOW THE MONEY

started by Dr.Scott , a few years back when he was forced to retire (disability from Vietnam). The idea was to establish a business that would be used to fund reading and civil liberty programs of the Franciscan Order he was in (He is a Bishop in an Orthodox -Catholic church.

Homepage http://www.SCOTTYDOGBOOKS.COM
Biography Started a few months before hurricane IKE, which destroyed our Office and Warehouse that we were in the process of inventory and listing on Amazon.com (our only vendor then and now). We were advised by a long term player in the Used Book business, that the economy crashing is a cyclical thing and it was a good time to buy books and bookstores, we did and have approximately 100K books that were never inventoried. Then came PENNY BOOKS, which some claim is a Walmart tactic to run the price of books so low no one could compete. It is suspicious that anyone would list 1 cent books that cost far over the penny and shipping ,minus the Amzn fee, and think it is profitable. Unless of course it is funded by Amazn to run the prices into the toilet, There are several suspicious sellers, but one who appears to be a nonprofit (but is not) manages to have a penny book on virtually every book on AMZN. They claim to be raising funds through sales and taking book donations to send to reading programs around the WORLD. Tricky to see how losing money on almost every sale can help provide WORLD BOOKS with anything ? It must be volume… We can’t play in this rigged game, regardless of who is rigging the game (and as a retired Forensic Examiner, I only know what this looks like and smells like, but I have no real evidence of a conspiracy by AMZN or the penny sellers). I do know that some poor new sellers followed the lead and are gone now…we have there books to prove the sad fact that it hurt a lot of little sellers trying to get into a business after losing their jobs. I feel a little guilty that we bought their dream, of having a bookstore, for less than 5cents a book. Now we have inventory that we would rather sell in lots of 500 to 100K rather than pay for climate controlled warehousing. BIG SALE in TEXAS. Maybe a giant penny seller would like to by it all and shut me and a few large sellers who are hopping mad. I will bargain and get out for a reasonable offer. The only other option is to do one last investigation and let the facts speak for themselves. Follow the money, Amazon gets its $1.35 minimum fee plus seller monthly fee and they don’t have to worry about doing anything and they now control not only the bookseller business which the make good money on the backs of sellers who are going bust, but they also control 49.5% of e-comm and M-comm. I think they are brilliant and I buy from them almost exclusively. I don’t think a legal case could be made even if it is market manipulation…Thank You REAGAN! They could be exposed and they don’t have to care what booksellers think, there is no other game in town! Again, I have no evidence and haven’t got the investment in time and money like some other sellers who are suspicious, but need or want real hard proof. I retired from that Forensic Expert investigator world and don’t care to do another case. PLEASE BUY ME OUT!