Why Are There Penny Books on Amazon?

Book sellers that list a course in miracles for a penny on Amazon either do this for a profit albeit a very small profit or to simply dump a lot of extra books hoping to recount for a small portion of their initial investment.  If they are simply wanting to get rid of extra books that are remaining in their warehouse, they can easily do this by essentially giving away their books.  They will lose money but at least they won’t be losing as much as what they would by letting them sit in a warehouse somewhere.  These sellers are typically very large volume sellers that hire people to pack and ship these books and do it on a mass scale.

These sellers have a number of things that have to look at before deciding to list and sell books at a penny.  These considerations are cost and weight of the book.  The seller will need to evaluate packaging costs, shipping costs, Amazon commissions, inventory acquisition and the cost of labor to pack and ship the book.  They will also have to consider the weight of the book because even with mailing discounts if the book weight 10 lbs, there is no way to make any money at all!  In the next few paragraphs, we will concentrate on the sellers that are trying to make a profit and not on the seller wanting to simply dump some inventory.

Cost

A seller has to first look at the price that they can buy the book at which will be their inventory cost.  In order to make any profit at all, the seller will have to essentially get the book for free somehow or a few cents so let’s assume that the seller received the book from a library that was giving books away they didn’t want anymore.

The second cost a seller needs to look at is the packaging cost.  I can buy a bubble mailer in quantities of 100 at around $0.33/piece.  Imagine a huge mega-seller buying tens of thousands of bubble mailers.  My best is the cost would be a nickel or less.

A third cost would be Amazon commissions.  Amazon charges 15% commission on the price of the book which would be nothing on a penny book.  That cost is out.  However, they also charge $1.35 on all books probably because of that very reason so the total amount given to Amazon is $1.35.  They obviously pay for the Pro Merchant account with Amazon so they don’t incur the $0.99/book charge.

Another cost would be the shipping cost.  This is where the mega seller shines.  They can get a bulk mail discount from the USPS.  Check USPS.com for their “bulk mail” rates.  These discounts can be as deep as a dollar off each book, which is considerable considering media mail is already very cheap.

The last cost would simply be labor.  They have to pay their employees to actually do the work of picking, packing and shipping or buy a machine to do it for them.  Type into Google “automatic packing” and you will see what I mean. 

Weight

Weight is the final consideration they have to look at as a book that weighs only a few ounces can be sent first class mail from the USPS and will have a considerable price different in shipping cost.

Example

BIGSELLER is able to get a book for free from a library and the book only weighs 8 ounces.  BIGSELLER wants to list this book on Amazon and the lowest price is going for a penny.  BIGSELLER decides he wants to get rid of this book so he lists for a penny.  BIGSELLER makes the sale and Amazon credits him $3.99 for shipping and the full price at $0.01 which makes BIGSELLER $4.  Amazon has to have their cut so Amazon takes their mandatory $1.35 and 15% commission on a penny which is nothing that gives BIGSELLER $2.65 for this book.

BIGSELLER buys thousands of bubble mailers from BIGSUPPLYCOMPANY for a a nickel, packing tape for $0.50/roll and printer paper for the packing slip close to one cent.  Throw in the bubble mailer, one strip of tape and a sheet of copy paper and that will be about 7 cents so their total packaging material cost is $0.07.

BIGSELLER also ships out hundreds if not thousands of books at a time and the USPS loves them for it so they give BIGSELLER a huge discount on the already cheap media mail rate, which, on a 8 oz book is about $1.50.