Understanding Amazon Fees: Tips for Used Book Sellers
Understanding Amazon fees can be confusing for used book sellers, especially for people who want to start on Amazon selling used media.
If you’ve read some guide about getting rich through selling books on Amazon, you may want to take a closer look at the date on those guides. Since March 2017, changes to the fee structure for media made selling books less lucrative.
Prior to March 2017, fees for the media category (including books) were 15% of the item sale price and a variable closing fee of $1.35 per book sold.
The new changes included a fee of 15% of the total sales price (including shipping) and a closing fee of $1.80.
For sellers, the difference meant that they were charged 15% on shipping price as well as the sale price. This increase, combined with higher closing fees, marked the end of penny books.
What does the change mean for people who want to sell used books on Amazon? It’s now difficult to earn much money by selling “cheap” books. Let’s take a look at a sample order for a $4.99 book with an Individual account.
Fees for a book sold with an Individual Account
A book is listed for $4.99 + 3.99 shipping, for a total of $8.98:
- $0.99 per-item fee (charged for every item sold through an Individual account)
- $1.35 referral fee (15% of total sales price)
- $1.80 closing fee (flat fee charged for all media)
You’d get $4.84. You’d still have to pay for shipping supplies and postage. New 2019 media mail rates start at $2.75.
In bulk, bubble mailers at the local office supply store are about $0.25 each when you buy a large pack. You’ll be able to get cases of mailers cheaper from one of these shipping supplies vendors.
That brings your proceeds from the sale to $1.84.
For many used book sellers, $1.84 isn’t worth it for the effort involved. The costs of supplementary materials like labels, paper, and tape, coupled with other costs like gas and time (assessing, listing, packing, shipping), make selling cheap books less than ideal. Of course, if your cost of goods is higher, then it’s even worse.
You can earn far more profit for the same amount of time invested in selling other products.
To put this number into perspective, you’d have to identify, list, pack, and ship approximately 4 books an hour to earn the federal minimum wage of $7.25 per hour.
But what if you were to use FBA?
The biggest difference between FBA and seller-fulfilled orders is that Amazon keeps any additional shipping fee. So you’d only receive $4.99. Your costs for an FBA order would be:
- $0.99 per-item fee
- $0.75 referral fee
- $1.80 closing fee
- $2.41 fulfillment fee
These fees don’t include inbound transportation and storage costs.
If you were to use FBA to fulfill this order, you’d receive less than $0.96 after you account for the inbound and storage fees.
Still want to sell used books?
High fees shouldn’t stop used book sellers. There’s still money in used media even with increased fees. If you’re able to get enough books at a very low price (or free), then selling books may be worth it if you’re able to develop an efficient workflow.
You’ll want to have some kind of software to track your income and expenses. With such low margins, you’ll be susceptible to an increase in your expenses, whether that’s increased marketplace fees, shipping fees, or even gas prices.
If you’re wondering how sellers manage to make money selling low-priced books, then it’s because they have the technology and volume to get better rates.
For instance, 2018 commercial rates for 5-digit presort start at $1.74 instead of the retail rate of $2.66. Any small discount from the retail rate can result in thousands of dollars of profit for volume sellers.
Don’t forget to account for returns. If you have to pay return shipping, you’ll be in the negative for the sale. When selling low-priced items on Amazon, you may be better off enabling returnless refunds for those items.
Here are some tips to help new sellers earn more money.
- Check out our article on new seller tools to streamline processes whenever possible to reduce the time you spend on any one task
- Use FBA for books that have a good sales rank so that you don’t pay as much for storage fees
- If you expect to consistently sell more than 40 books a month, subscribe to the Professional plan to eliminate the per-item fee
- Reduce returns by making sure your book condition is accurate and transparent
- Consider selling low-demand or cheap books on eBay or other marketplaces grouped as lots (by author, genre, or audience)
- Sell (or trade) unwanted or low-value books to used bookstores like Half Price Books
- Use rewards credit cards and online rebate or affiliate links to save even more
- Use scanning apps to quickly go through stacks of books
- Set a minimum profit you want from each sale to make your time worthwhile (and to speed up sorting)
- Consider returnless refunds for some items
The good news for used book sellers is that people haven’t shunned physical media for digital. Audiobooks and ebooks haven’t decimated print books as some feared just a few years ago. On the contrary, sales of print books have increased and are forecasted to grow.
Starting off with books may be a good way to learn how to navigate Amazon. The low cost of entry means that you can learn the various processes. Think about any losses as the cost of learning Amazon. It’s still cheaper than paying for an Amazon guru course.