If you sell used books on Amazon MarketPlace, you have probably noticed other online booksellers selling books for a penny - yes, 1 cent. First, you wonder, how are the other sellers making money?

You do the math:  Penny seller lists a book for $.01.  Amazon collects $3.99 from the buyer and gives $2.66 ($.01 + $2.64 shipping allowance) to the used book seller. A $1.35 "closing fee" is subtracted from the 3.98 shipping fee charged by Amazon. Or maybe these numbers have changed, but relatively speaking, the overall analysis is pretty much the same.

Note the book seller does not pay a 0.99 fee for each item sold, because they are a ProMerchant seller who is paying $40 a month in part to avoid the individual item 99 cent fees. This $40 a month is a sunk cost of the online used book seller, and thus irrelevant to the equation for the most part.

There is no 15% commission to pay Amazon since the book only sold for a penny.

The book seller pays $2.31 or $2.65 in media mail postage for a one or two pound package -- or less, if it is very light weight and can go First Class Mail. Much less if the penny seller is high volume and uses Bulk Mail.

The bookseller cost for the book is a sunk cost. Likely the used book seller paid next to nothing or nothing for it. Perhaps it was received in trade at a used book store. Perhaps it was bought in a bulk buy, and the book seller made his or her money on the other books in the bulk purchase.

Maybe the seller uses recycled packing materials so they cost nothing. Maybe they use a .20 cent mailer.

The book seller ends-up with somewhere around .10 - .50 profit in a domestic shipment.

Not much. And if the seller had to pay labor to pick, pack, and ship it then he or she probably lost money.

But perhaps the book seller owns a used bookstore, and has labor to staff the store anyway, and that labor can do the shipping during slow times when there is nothing else for them to do anyway.

And you go, ok, I see they are not losing money necessarily, but those penny sellers, they are ruining the market for some ridiculously small .35 profit!  Not really. The market is / was already ruined. There is too much supply and too little demand for the books that have reached a penny in value. It was inevitable that they would drop to some minimum very low price, and blaming the penny sellers for that is ridiculous.  Ranting and raving about banding up against penny sellers is ridiculous.

And if you approached selling books on Amazon as a business, instead of as a job, then you would realize selling penny books makes sense - dollars and cents! And here are 2 great reasons why:

Reason Number 1: It generates good will - the first sellers to sell penny books typically did it to get their ratings and feedback up. If you sell someone a penny book and then take great care of them as a customer in spite of the fact you are not pocketing a large profit from them - why, well then those customers give you great feedback.

Reason Number 2: Every time you sell a penny book, you gain a customer list entry. You know how many businesspeople pay to build up a customer list? And here you can do it at no cost. What good is a customer list to someone who is simply listing used books on Amazon Marketplace, and nothing more? Well, no good at all. But what good is a customer list to someone who is building a book selling business - someone who is probably treating the Amazon MarketPlace as just one venue for their book sales? - It is GOLD! Gold Bricks! The gold bricks that lasting businesses are made of.

It takes repeat customers to build a lasting business. Every small businessperson knows this. But all those fools on the Amazon discussion boards moaning and groaning about penny sellers - calling for lynchings and scared the sky is falling - those sellers are not building businesses. They are just yaks performing a job - a job that lets them have flexible hours, yes. A job that maybe lets them work at home, yes. But still a job. Because they are not adding any value - not building for repeat customers, not branding their business. Ok, so you say, what do you mean not adding value? If I am an Amazon Seller and give better service than the other guy, and package better, are not I adding value - and won't I be rewarded for it? Well, yes, and no. You will be rewarded for it in the sense of getting better Amazon ratings, and thus more future sales since you have a good rating. But NO, you will not be rewarded for it like you should be. You should get repeat customers from such extra effort, and if you are just selling used books on Amazon MarketPlace only, you will not. Or they will be rare. But if you are building a customer list, and selling on multiple venues including your own web site - then say after a year you do something like this:

Email all your customers and offer an any 3 romance books on your web site for $5 special, shipping included. You can pick up romance novels in the used book business for 2-3 cents each. People used to give them to me, by the droves, for free. Obviously you cannot spam your customers, but emailing them once in a blue moon is acceptable. You can tell them to opt out in the insert you send them when you sent them their original book purchase. You have a list of 5000 people you have sold penny romance books to. Well, if a small percentage of those 5000 previous happy customers take you up on the offer, you just made a nice chunk of cash - with zero commission to Amazon or eBay or wherever.

UPDATE: It is against Amazon Marketplace's Terms of Service to email book buying customers based on getting their email address from Amazon. However, you could get them to visit your site and opt-in based on flyers offering a great deal that you would include with each book shipped out.

This is not how most of the Amazon booksellers who are complaining about penny booksellers think - they are just people who are really just working a job, complaining about how things are, and in general, not getting anywhere. And so they squawk, instead of thinking outside the box and trying to find a way to make the situation work FOR them. Meanwhile, the real businesspeople sell penny books, and laugh all the way to the bank.