For many years now, we have seen sellers on the Amazon platform selling “penny books” and driving down the ability for many sellers to develop a profitable business. Amazon has started to combat this process by raising their fees on some of the process of the Fulfillment by Amazon platform. If you are looking to get into selling used books on Amazon and turning it into a business, learning how to list your items correctly is essential.
This concept became popular as many once realized that Amazon would credit sellers the $3.99 shipping fee when they sold their book on their platform. When media mail shipping was rather cheap, sellers could profit from this process. If a book sold for $0.01, there was no referral fee as 15% of a penny is nothing. Then they credited you the $3.99 shipping fee and took from that the $1.35 variable closing cost fee. This left the seller with $2.65 in their pocket. A few years ago a book less than one pound could ship media mail for about $1.80, plus an envelope that cost about $0.10. At the end of the transaction, a penny book would net the seller $0.75. With most books costing the seller less than a quarter, they made a $0.50 profit from this deal. In 2012, media mail costs much more to ship and the shipping fee has not increased. The profitability of this method is all but dead.
The Fulfillment by Amazon equivalent to this concept was to sell a book for $4.00, and in many cases less than that. Before 2012, FBA charged fees of $0.60 to pick and pack the item, $1.35 for a closing cost and a $0.40 per pound shipping cost based on the weight of the item. After fees on a one pound book, FBA sellers would net a profit of $1.05. With the recent increase in pick fees (now $1.00 per item) and the shipping fee of $0.37/lb rounded to the next whole pound, this method has become less profitable at the penny book price point.
When you are pricing your inventory, develop a spreadsheet that will enable you to calculate all of your costs into the retail price your books. In that calculation, include a flat rate that you would be willing to make as profit per item sold. If the spreadsheet is done right, the only variable you would need to enter per book is the actual weight. When you enter the actual weight of the item, it will give you the retail price you need to charge to clear your desired profit amount per book.
Do not concern yourself with low-ball pricing competitors. In most cases, the sellers have not bothered to go back and manually recalculate the prices of their existing inventory after the price increases and they know they are taking a loss on those sales. Once those lower priced items are sold or returned to the sellers to update the pricing, your prices will sit better on the page. In addition, by providing more accurate item descriptions and looking into some of the other Amazon marketing programs, you will find a way to sell your items faster despite the higher retail prices.
