My Tips For Selling on Amazon

Although I've only recently started selling things through Amazon, I think it's been a productive week. In this post, I'd like to pass on a few more tips.

First up, a quick status report. In less than one week, I've posted 134 items. Of those, 47 have now sold. This leads to the first tip on this post (which is an obvious one, but may be useful for new sellers).

Tip #1: If you are going to sell more than 40 items per month, sign up as a Pro Seller. Normally Amazon will charge an extra 99 cents per sale - paying 39.99 per month waives this fee. If you aren't sure, you can wait and play it safe - but if you're going for volume, go Pro.

I attribute most of my success to the quality of my collection (my CDs are all in very good condition), and to my method for listing. As mentioned earlier, I only list items where I can profitably list at the new lowest price. This keeps items which are worthless from cluttering up my store, and makes sure that people looking for used CDs will find mine first.

The interesting thing is that I'm not the only one doing this (naturally). After about a day, almost 30% of my inventory is no longer listed at the lowest price. The marketplace is actually more dynamic than it might seem from just browsing the Amazon site - there's a fair amount of competition driving prices down. If you want a used CD, but aren't in a rush, wait a few days and it might be cheaper. On the other hand, cheap items sell fast, so you may risk losing an item by waiting.

Tip #2: Review your inventory regularly to make sure your listings are competitive. In my case, I do so about once a day. Generally I'm perfectly happy to drop a few cents or a nickel to get the lowest price. For a high proft item, I'll gladly drop a buck. On the other hand, when I see someone competing with a price too low for my preferences, I'll review other offers, and sometimes bring my price up - once the competitor sells this puts me in a good position for the next customer.

I'd also like to note that Amazon has really excellent support for their sellers. Just push a button on the web site, and you will get a phone call from their support immediately. This bypasses the usual security questions since you are logged in to your account to initiate the call. All the support people I have talked to were very friendly and helpful. So, kudos to Amazon. If you have any questions, feel free to call them.

If you're interested in buying quality used CD's, please check out my store front.

Finally, I've found a new outlet for those CDs which I just can't get any value for no matter what - promotional CDs, overstocked junk, whatever. These are going to go to a local artist, and be recycled into various art projects. If I get a chance to see any interesting pieces created out of the donations, I'll try and post pictures.

The Economics of Selling CDs

Hopefully someone out there is interested in these numbers - my hope is these details may be useful for anyone thinking about selling their own CD collection. With that in mind, here are some concrete numbers after my first batch of CDs was processed. This post will focus mainly on the associated overhead - at the moment, I'm only shipping in the US, so these numbers are all limited to that context.

When you sell merchandise through Amazon, you receive a credit to help cover the shipping costs. These are fixed by Amazon, so will not necessarily correspond directly to your own costs. At the moment, I'm getting a credit of $2.98 for each CD I sell, regardless of the CD.

My costs depend on the supplies I buy to ship, and the postage. In my first batch, I picked up the supplies from the post office. To ship a double CD set costs me $1.99 for a small box and $2.70 for postage - that means I'm losing $1.71 against my selling price. In other words, I want to make sure I'm charging more than $1.71 on those sets, or I'm losing money.

For a regular single CD in a jewel case, I pay $1.09 for a card sleeve, 16 cents for bubble wrap, and $2.02 for shipping. That's a total of $3.27 for a loss of 29 cents. On the cheaper side, for CDs which come in cardboard sleeves, shipping drops to $1.85.

After running the numbers, I decided to get some cheaper supplies. At Target, I can buy CD-sized padded envelopes for 65 cents each. This means I will actually be making a small profit against the shipping credit for most CDs, and only losing on the larger disc sets - which tend to have higher selling prices anyways.

If you have any questions, feel free to ask them in the comments.

Amazon Love

Nothing breeds customer loyalty for me better than free money. I just got this delightful email from Amazon:

You are receiving this e-mail due to your purchase of an HD DVD player from Amazon.com before February 23, 2008. As you may know, manufacture of HD DVD players ceased February 23, 2008, and major studios in the U.S. have ceased production of HD DVDs. In recognition of this development, Amazon.com is providing all customers who purchased qualifying HD DVD players a credit for $50...

This certainly eases the pain of having bought one of the devices on the losing side of the format war (which may still turn out to have more than one loser...).

Kudos to you, Amazon.

Discovering Realistic Models

The DRM saga continues... according to this article, the Entertainment Retailers Assoociation (ERA) blames DRM for slow sales. Copy protection is "stifling growth and working against the consumer interested" (Kim Bayley). They are asking the music industry to "put an end to DRM".

It's worth pointing out that the ERA doesn't seem to own any content, so you could argue that it's easy enough for them to say don't protect it. Still, they see their business growing as a result of removing DRM, and if they are right, then the recording industry's business would presumably also grow as a result. According to some reports, EMI's experiments in this direction have been positive so far.

All in all, it's been a good year for DRM opponents, as key big players, like Amazon, have entered the fray. Amazon's offering a whopping 20% referral fees to help promote their store - as a consumer, this sort of thing makes sense to me all around. There's a sample referral link to an album I've been enjoying lately over to the left. You can pick songs up by the track for the usual .99 cents each, or save almost six bucks by getting all 14 tracks for only 7.99. Cheap prices, no DRM, high bitrate (256), are pretty near my sweet spot as a customer. (Even better? Add a locker feature, so I can re-download tracks at any time, and make the files lossless.)