Tuesday, July 3, 2007

How to sell books on Amazon without losing money

The problem of the overzealous reader
Sònia and I have been looking a lot at the huge pile of books we've been dragging all the way from Barcelona through New Orleans to Philadelphia. It's too dang big. About half the shipping container we brought from Barcelona was just books.

On the one hand, I love having books around me. But I've discovered something. I really love the library. It's like having someone else's dog around. They're fun, but you don't have to pay for their food and when you're tired of them you send them on home. Incidentally, if you live in Philadelphia, the Philly Free Library even has a web page that will let you order books. They'll notify you by email when the books are ready to pick up. It makes you feel smug and important when you go pick up your $500 worth of books at the library for free.

Which brings us back to the mountain of books I bought and now have sitting at my house. I finally decided to sell about 100 of them. That's a laughably small fraction, but it's a start.

Amazon to the rescue
Amazon has a system by which you can sell your old books. The process to become a seller is relatively painless. You have to have a credit card or checking account in which you can receive the payments, and they go through a verification process to ensure your account exists.

Listing books
To list books you want to sell, the simplest thing is to enter the ISBN into a form Amazon has on their seller's page. You don't have to scan images of the books or write descriptions, all that is taken care of by Amazon. The only trick is that the book has to be in Amazon's catalog, but you'd be amazed at what they have in the catalog. All of the Spanish language books I put in were listed, and almost all of the Chinese books were found as well.

Assigning a quality rating
The one thing that is a little bit of a pain is that you have to assign a price and a quality rating to the book. The quality rating is subjective. You look at it and try to see if there is notable damage to the book, etc. You have to be honest on this. If you aren't you can get a bad reputation score and no one will buy from you.

Assigning a price: A little math problem
When you go to assign the price, Amazon tells you what the lowest price is at that moment. I'm not a big volume seller. I just want to get rid of these books, so I just undercut the lowest price by a little. However, sometimes there is no profit to be made by doing that. In my case, if I calculate no profit, I just don't sell the book (maybe someone gets it next holiday season).

Amazon takes a commission: set the price accordingly
Of course, you get the money for the original price you set for the book. However, Amazon takes a commission for the sale. The commission for books is 15%, plus a 1.35 closing fee, plus a 99 cent transaction fee:

Amazon's take = (Your price) * 0.15 + 1.35 + 0.99
Example: $10 Book -> ($10 * 0.15) + 1.35 + 0.99 = $3.84 commission

Shipping costs
I sent out the orders via Media Mail, which is a U.S. Postal Service type of shipping that only allows books, CDs, DVDs, and the like. It is slower (5-7 business days, usually), but cheaper. Here are the rates for Media Mail by weight:

Weight (lbs)Shipping cost

A standard padded mailer envelope from the post office is $1.65. You can probably do better than that at Office Depot.

Pricing: Putting it all together
So you need to keep in mind Amazon's commission, shipping costs, and materiel costs when setting the price. A couple of examples:
(Your price) - (Amazon's Commission) + (Shipping Allowance) - (Media Mail Shipping Cost) - (Envelope) = (Your profit)
$10 book that weighs 1.5 lbs:
$10 - $3.84 + $3.99 - $2.14 - $1.65 = $6.36
$4 book that weighs 2.75 lbs:
$4 - $2.94 + $3.99 - $2.48 - $1.65 = $0.92
$2.50 book that weighs 1.1 lbs:
$2.50 - $2.72 + 3.99 - $2.14 - $1.65 = -0.02

Take note of that last figure. You actually make no profit on that sale. I put myself a minimum of $1.00 profit on every book, it's just not worth it to go to all the trouble to sell for less for me.

You see a lot of books being sold for 1 cent. This is because big volume sellers pony up for a special Pro Merchant Subscriber account that gets Amazon to waive the 99 cent fee. Also they may have figured out a way to ship more cheaply or get shipping materials for a lot less.

Receiving orders
About an hour after I had all of my books in the system, I started receiving orders. These come in the form of "Sold, Ship Now" emails from Amazon. You can also just check the "Recent Orders" report on the Amazon Seller's page. I responded to each of these orders immediately with a message about how soon I was going to ship the order. From the same report page you can print out shipping labels and packing lists. I just printed out the packing list and stuck it in the first book of each order so I knew what to ship out.

Resetting the low price
One annoyance I noticed was that people continuously change the price on their books to get the lowest price. So if you want to sell relatively quickly, you have to spend some time every now and then at the "Your Marketplace Open Listings" page to check that your low, low prices are not higher that anyone else's.

How much I made
Finally, once I shipped the books, I was able to write to my customers to tell them everything had been shipped. My first run netted me about $25 on the sale of eight books. Am I going to get rich doing this? Probably not. It's a lot of work for not much money. But we have less books now, and some other book lover has our old books.


  1. Nice little article on amazon selling. Just wanted to point out that when checking your open listings for low price that it only shows the low price logo if there is another copy in the same sub-condition lower. It will not show low price if other condition boooks, in better or worse condition have a lower price!
    Also, many big sellers run pricing software designed to either match or undercut the lowest price and run this software several times a day. These sellers are impossible to compete with and it's a good idea to keep a list of them handy. Also as they have usually poor feedback many buyyers skip over them to find a higher priced book from a better performing seller.
    You may want to take a look at my blog where I have some posts about selling on amazon.
    Also don't be tempted by books like the one exposed here as they make very unrealistic claims about what is achievable and how much you can actually earn. Basically they just want to make money from you, not help you!
    Anyway, good luck!

  2. Thanks, roo! Good point, I did not realize that.

    The idea of a seller using an automated price changer is a little discouraging. Competing with them by reputation is not an option for me yet, as I am so new at this that I have no feedback yet! *Sigh.

    The one thing I did find that was kind of cool was that you can save a lot of money on padded envelopes by buying them in bulk from Amazon. Where the U.S. Postal service sells envelopes for $1.25US, you can get them for a tenth of that by buying in bulk.

    Take care, and thankd for the sage advice!

  3. Thank you so much for the article. I wanted to cut down on the household clutter recently and sold some books on Amazon. It was so easy that when I came across a great book sale I bought a couple dozen for kicks to see if I can make a bit of money doing this. The fees have been discouraging, though, as well as all the $.01 sellers. Just wanted you to know I appreciate the blog post.

  4. Hi, thanks for the post! I am about to move out from a small island and curious how to downsize my owning here...
    gracias, y que tenga un bien dia!!! Ciao! Barbara

  5. I really, really appreciate the post as we are trying to clean out over here. By making a spreadsheet with your shipping and fees stats on it, I was able to limit my scope to just a few books to sell. I had no idea how expensive it is just to SELL books on Amazon!

  6. Thank you for the post Timothy Chen Allen.

  7. I'm a new seller and I had an issue with my first customer..the email to ship was sent to my mobile email..but it was in my spam folder..so i didn't see it till a week later..so i have only sold 4 books in a month and a half..i think because my seller rank is 34 of 100.. i wonder what I can do to boost my rating

    1. It sounds like you may not be able to fix that; you'll probably need to start a new seller account with a different email. I wouldn't buy from a seller with a 34% approval rating and most other people won't either. It may be worthwhile to set up an email account specifically for selling. And check your spam folder! Good luck!


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