Saturday, 8 October 2016

This Wasn't Supposed To Happen

As I may have mentioned before, I put up a few CDs to sell on Amazon to see what would happen.  I didn't really want to sell any of them, so I set my prices deliberately well above the cheapest available (all except for one, the story of which is detailed here.

However, I'd sort've forgotten about the other few and one sold yesterday (Friday 07/10/16) at £7.76 (plus the mandatory £1.26 postage and packing.  It was my own fault really, the lowest prices were £7.49, £7.50 and so on; I really should have priced it a lot higher.

The album was this one, Metro Area's self-titled debut from 2002; it was in pristine condition so I listed it as "Used - As New", which I considered an accurate description:

So now I was faced with having to send it out without really being geared up to do so.  Fortunately, as an inveterate hoarder, I had a box of 100 CD-sized padded envelopes that I'd picked up from my old workplace for about a fiver, so that cost was negligible really.  But then there was the hassle of packing it up and taking it to the Post Office, having it weighed and classified (107g, Large Letter for those interested) and paying the postage, which was (as again, I've mentioned before, is currently £1.27 for first class post for a properly-packaged CD in a full-size jewel case); this kind of makes sense of Amazon's £1.26 postage addition for CDs as it ensures that minor sellers can't make money on postage costs (sending second class makes scant difference, a few pence less, that's all), and sending out "properly" (as I see it) in fact means a penny lost for each CD sent in this way.

But it does skew the market in favour of the big sellers, whose postage costs per CD - even if they were all sent out in the same manner (proper padded envelope, etc.) would typically be about 75p or less, due to negotiations on volume sales/day.  Add into this that many CDs these days come in cardboard sleeves and so can be sent at Letter rate, bringing the big players' average per-CD postage cost down to about 43p (obviously these rates don't apply to sellers only sending a few items each day; us plebs pay full price).  Anyway, I packed it up (ensuring that it remained in pristine condition) and paid my £1.27 postage the next day (Saturday 08/10/16).  But it doesn't end there, because Amazon like to take a large margin all for themselves, depending on the selling price.

For those interested, the full breakdown for sending this one are as follows:

Selling price:  £7.76 - Mandatory P & P:  £1.26, totalling £9.02.  Amazon listing fees:  £2.58, leaving me with £6.44.  Minus the actual postage cost £1.27, this gives me £5.17 in profit.  I'm not complaining by any means, but it's a far cry from the £9.02 and it means Amazon are actually taking a whopping 28.6% (gross) on the sale, which seems to me a little much.

So, I thought that it's no wonder that the likes of Music Magpie and their ilk list a lot of CDs at a penny each.  With their postage discounts taken into account, they should be making around £0.75 per CD just on postage (that's an estimate, obviously). However, if I was to list a CD at £0.01, I would still be charged £0.99 as a listing fee alone, which ostensibly means that I'd lose quite a bit of money on every item sold.  It makes me think that the big resellers must have some other deal with Amazon when it comes to listing fees, otherwise why do it at all?  Free listings if you can demonstrate that you can sell more than 100 CDs per day?  I really don't know.

Obviously I've a lot to learn if I want to get into this business (which I don't, really).  And I'd obviously have to streamline my process, should I actually do it, like get a printer that actually works without having to literally shove the paper in manually (amongst other things).

Anyway, hope this casts a little more light on the whole process and if it helps anyone else in a similar position, all the better!

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