This post has been included in the Carnival of Personal Finance #212, hosted by Darwin’s Finance.
For ages I kept many of my college and graduate school math, physics, and engineering textbooks boxed up in my crawlspace. After a decade of not opening a single one I decided it was time to unload them. On a whim, I put them up for sale on Amazon.com. As of today, all but three of about forty books have sold. Turning effectively useless paper into cash has been very gratifying. I’ve made about $1,000.
Every step of the process, from creating a seller account to interacting with buyers, was easy. The hardest part is taking the books to the post office, which I can do on my commute. Since this costs me about 20 minutes of time and about $4 for the envelope and postage, I never price a book below $15 (+$3.99 shipping) even if another merchant is offering the title for considerably less. It just isn’t worth my time to earn less than that. (Amazon.com takes a cut of a few dollars too. For books it is $2.34 + 15%.)
Amazon.com mediates all financial transactions and communication between buyer and seller so I did not feel as if I was taking any significant risks. I think the biggest risk is having someone request a refund long after a purchase. That never happened to me (or hasn’t yet). If it had I might have felt like I was being treated like a lending library.
What I found most intriguing about selling used textbooks on Amazon.com was participating as a seller in a market. I got to see and affect price and quality competition, things I had studied but not seen so vividly in action. Each used book listed on Amazon.com has a price, of course, but also a condition rating: new, like new, very good, good, acceptable, etc. Additionally, merchants are rated by purchasers on their performance (100% is the highest possible rating). Thus, one can think of the market for a particular book as three dimensional: price, book condition, and merchant rating.
In the market for a specific title, there is daily or even hourly jockeying for position with respect to these three dimensions. Some sellers strive for the cheapest price, undercutting the next seller by a penny, independent of the dimensions of quality or merchant rating. Some aim for gaps in the hierarchy where their book condition or merchant rating may justify a higher price.
For example, suppose for a particular title, another merchant with a 95% rating is offering the lowest price of $10 for a “good” quality copy and the next cheapest entry is at $20 for a “like new” copy by a 100% rated merchant. I might slip in and make a sale at $19 with my “like new” copy and my 100% rating. Buyers who are not that price sensitive may be willing to spend the extra $9 over the lowest price (i.e. $19 instead of $10) to buy my higher quality copy that comes with the better customer service implied by my slightly higher rating (100% vs. 95%). But there is no incentive to spend the extra dollar to buy the other “like new” copy from the other 100% rated merchant. As far as the purchaser can tell, that other high-quality merchant and I are selling the same thing (same quality) but mine is $1 cheaper.
The added benefit of selling on Amazon.com is that I am thoroughly comfortable with the used book market they’ve set up. I now buy used books on Amazon.com all the time, saving loads of money. I can only think of one good reason not to buy a used book, provided the quality is sufficiently high: used books do not qualify for free shipping, which Amazon.com offers for qualified purchases above $25. Therefore, sometimes I buy new if the price difference over used is within (or close to) the value of free shipping (if offered).
So, my advice: have no fear. Make and save money. Sell and buy used on Amazon.com.