Amazon Marketplace rip-off

A week ago today I decided that the best way to get rich would be to list a bunch of books for sale on the marketplace. Those who helped us move a while back will remember that we had something like 25 boxes of books from our bookshelf. These boxes were the first ones into the moving van (while everybody was still feeling strong!), order but they were thus the last ones out of the van when we arrived at our new place (when almost everybody but Jonathan and Keith had abandoned us). We decided it was time to get rid of some of the books, viagra sale even if it is just so the Elder’s Quorum doesn’t have to move as many boxes of books down the road.

Selling our own books on Amazon, however, turned out not to be the way to make it rich quickly.

The first book we sold happened within 30 minutes of placing the books for sale on Amazon’s website. The book was listed for sale at $4.50. Amazon added $3.49 to cover shipping, so the buyer paid $7.99 for the book. How much do you think I ended up with? Just over $3.00. Where did the five dollars go? Well Amazon took a commission of almost three dollars, and it cost me another 2 dollars to buy packaging for and pay for postage on the book.

I was surprised that Amazon got a three dollar commission on a book that sold for $4.50. Sounds a little steep doesn’t it? Well, turns out that Amazon’s selling fees for books are as follows: (1) 15% of purchase price of book for Amazon’s commission. (2) $1.23 closing fee (this isn’t a house. Why are there closing costs?). And (3) a $.99 fee that I call the “Just because we can” fee. Amazon calls this a “per-transaction fee.” This is a fee that Amazon charges to sellers who aren’t registered for the “professional merchant” program. You see, for $39.99 a month you can become a “Professional Merchant” and can avoid the “just because we can” fee. If you sell more than 40 books in a given month, you save money. If you sell less than 40 bucks, you’re better-off paying the “just because we can” fee.

How does the fee structure break down in real-life selling situations? Here are some examples.

  1. Our first sale was for $4.50. The shipping added was $3.49, so the buyer paid $7.99. Amazon’s 15% commission was $.68 (15% of $4.50), the closing fee was $1.23, and the just-because-we-can fee was $.99. That means Amazon got $2.90 of the total price, bringing our cash income to $5.09. From that, we had to pay for packaging ($.50) and postage ($1.50), so our net gain on the book was $3.09. (However, our friendly buyer, after the book shipped, decided that she really didn’t want this book, so she is going to return it. Amazon requires that merchants offer returns, so now she gets to return the book to us, but we get no compensation for the packaging or the shipping. We’re out two dollars on the purchase just because she decided that she didn’t want the book anymore.)
  2. Our next book had hundreds of books in the marketplace, so we priced it kind of low. We sold it for $.50. With shipping, the buyer paid $3.99 for the book. Amazon got a $.09 commission, plus the $1.23 closing fee, plus the .99 just-because-we-can fee, bringing our cash income to $1.69. From that, we had to pay for packaging ($.50) and postage ($1.12), so our net gain on the book was a paltry $.07. Amazon’s fees on a $.50 book were $2.31. You can’t even justify the time involved for seven cents.
  3. Another book sold for $3.75. With shipping, the buyer paid $7.74. Amazon’s commission, closing fee, and just-because-we-can fee added up to $2.78. Our cash income was $4.46, but this book was heavier. Packaging cost $.50, and postage was $2.00. We ended up with $1.96.
  4. Our highest-price sale to date was for $15.50, so the buyer paid $18.99 with shipping. Amazon’s total commission, closing fee, and just-because-we-can fee totaled $4.55, leaving us with $14.44 cash income. Packaging and postage cost us $2.50, and we ended up with $11.94.

The way to make money from Amazon’s marketplace program is to be a high-volume seller, and join their merchant pro program, so you can pay them $40 a month, but not pay the just-because-we-can fee. Then you make a lot of sales, so that the little amounts you make on each book add up in the end. It helps if you can find books that people are willing to buy for more than $.50. Helps a lot actually.

The Amazon marketplace probably isn’t the place for the average low-volume user to make a ton of money on the books sitting in their bookcase. It turns out that the old saying really is true: there just ain’t no free lunch.

16 responses to “Amazon Marketplace rip-off”

  1. Have you tried the glorious online auctionhouse that is eBay? I earned about a hundred bucks selling a bunch of DVDs that I spent about a hundred bucks on. I never figured out if I made money or lost money, but at least I spent a lot of fun time selling stuff over the Internet!

  2. I’ve been looking for a way to integrate ebay and amazon products both on the same page to let people compare the prices and buy which ever they think is a better deal. Know where I can find php code that does that?

  3. An interesting post. From a buyers point of view Amazon Marketplace’s P&H fees are not transparent. When buying a number of items it’s not until you’ve gone through an arduous check out process that they even tell you what the postage charges are. Which is obviously geared around them protecting greedy commissions. I agree with the other comment about sticking with eBay. At least you know what you’re getting for your money.

  4. What a bunch of [no foul language, please]. I can’t believe they charge this much for sitting on their fat [no foul language, please] with £20 notes.

    Blog admin note: This post has been edited in accordance with this Blog’s comment editorial policy.

  5. Just figured this out the hard way, too. What’s also infuriating about their 15% commission on books is that it’s a NEW policy that I don’t ever remember getting an email about. I used to sell tons of books on Amazon and was never charged a 15% commission. Ridiculous. I will be taking my surplus books and selling them elsewhere.

  6. one big difference b/w marketplace and eBay is that there are no listing fees; if your book is a relatively obscure title/field, it might be better to list on amazon for a longer period of time

    but of course, Amazon takes a big cut out of your profits…… if you can’t sell an item/book on eBay after 2 tries, its probably best to move onto amazon marketplace

  7. Amazon rips people off. Just ask a seller who has had their money held in reserve for over 45 days. Totally scam artist. I wish someone would start a class action against this idiots.

  8. We have been an Amazon Marketplace ProMerchant Seller for the past 5 years and never have had any trouble with Amazon. It is a great system! searches for Amazon Marketplace music CD bargains every day, and has a free online report.

  9. Its no wonder that the protagonist in my Amazon dispute is sweating a few dollars. They literally nickel and dime the sellers to death!
    And try to find somewhere to lodge a complaint against a amazon seller.. Other than the feedback of course. Ridiculous.

  10. I understand your feelings. Likewise, as a buyer, when a seller charges an incredulously high $13 for shipping, I’m also upset. I’ve even more upset when the book arrives in a cheap wedding envelope, with .95 worth of wilted stamped on it.

  11. (UK) I just sold 3 books on Amazon Marketplace, then cancelled the orders due to the following costs (I have put in brackets the ACTUAL amount it would cost to post if I had gone through with it)

    1) Buyer’s Price: £0.01
    Amazon Commission: (£1.18)
    VAT on (£0.17)
    Postage Credit: £2.75
    Your Earnings: £1.41
    (Cost to post: £1.50)

    2) Purchased on: 2008-09-08
    Buyer’s Price: £10.00
    Amazon Commission: (£2.68)
    VAT on (£0.40)
    Postage Credit: £2.75
    Your Earnings: £9.67
    (Cost to post: £7.50)

    Buyer’s Price: £3.00
    Amazon Commission: (£1.63)
    VAT on (£0.24)
    Postage Credit: £2.75
    Your Earnings: £3.88
    (Cost to post: £2.50)

    … so after a total cost to the buyer of £21.26, after commission and postage costs, I would see about £3.50

  12. @Karen – You have to be careful with eBay listings, because a lot of sellers are making an extra chunk on the “shipping and handling”, which is ridiculous.

    I like how Amazon pre-sets shipping charges, because at least then all Marketplace sellers are on the same playing field, but I want Amazon to compete fairly and compensate Marketplace sellers as much for shipping as Amazon requires of their customers. I think it is really unfair that Amazon charges more for shipping to their own customers than they collect for shipping for Marketplace orders. It’s why I stopped selling in the Marketplace. Amazon doesn’t treat us with respect, so I won’t work with them.

  13. The place is dominated by volume power sellers who buy ex library books in bulk. Large numbers of titles are now listed for ¢.01. Small sellers literally can’t compete.

  14. SO glad that others see this ripoff! However, this article was written in 2006, and NOTHING HAS CHANGED!!!!!

    I am definitely going to find somewhere else to sell my extra books, etc.!

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