Amazon Marketplace

September 13th, 2007

Over the last few months I’ve been shifting my stock of boot-sale cd’s on Amazon Marketplace. These are the cd’s I’ve bought at the boot sale to sell on, rather than my own collection (although that will come soon enough), and for the benefit of anyone Googling around the subject, here are my thoughts.

Executive summary: selling with Amazon is much easier than with eBay, but you make less money.

Easier, because listing is as simple as entering the barcode number, rating quality, then setting the price. You’re told the current £lowest, so you can pitch to undercut comfortably. And crucially, the listing stays live for six weeks. It’s fire and forget. eBaying is significantly more of a hassle, not least because of the description writing, and that you have to relist any sold items on a more or less weekly basis.

The downside is that Amazon take a bigger cut; increasingly so (as a percentage) as the value of your item falls. I’ve laid out the full equation below, but the bottom line is that if you’re selling for less than £1, you’re losing money.

What you make

Let selling price = x, profit = P

P = x + £1.24 (shipping) -£0.28 (a bizarre tax on their own shipping fee) – £0.86 (Amazon’s baseline cut) – 17.25x/100 (Amazon’s % cut) – £0.72 (typical postage cost) – £0.20 (Jiffy bag)

So, rounding up the % cut slightly, P = 4x/5 -£0.82. In English: profit is zero when you sell for £1. I would draw a graph for this if I could be bothered, and it would show a line crossing the y-axis (profit) when x (selling price) = £1. And all of this is assuming you’ve written-off the cost of the cd, i.e. cd = £0

I repeat, you have to sell for £1 just to break even.

To make £1, which is really the very minimum you should be thinking about for this much effort, you need to sell for £2.25.

More realistically, and not regarding the cost as sunk, to make £5 on a cd you paid £3 for, you need to sell it for £11.

It’s deceptive. And really truly not worth it for lower value items.

If you’re selling for less than £1, and there are plenty that are, then you’re losing money. All of those sellers who fire-sale cd’s for £0.01 are either idiots, or running some sort of ‘post at work for free’ scam. Either way, all my low value items are going to the British Heart Foundation.

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