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Amazon Sticks It To You On Low-Priced Items
 

If you look around Amazon, you will find that some vendors are selling CD's, DVD's, etc for one penny. I suspected that they were loosing money at that price, so just for grins, I decided to plug one in for myself, but not actually post it.

I picked a CD that was selling used by some vendors for one cent, and started to list it. If it sold, the breakdown by Amazon was as follows...

Standard Shipping
Amazon Fees: $2.34
Shipping Credit: $3.99
Total you will receive: $1.66

Even if you ship this CD using 5 ounce First Class mail, your postage will be about $2.04. This means you supply packaging materials, package it up, ship it, guarantee it, and loose 38 cents in the process.

Maybe you make it up in volume? Realistically, you are better off giving it to the GoodWill and taking the write-off.

They probably do it for 2 reasons:
1. building feedback and trust with amazon.
2. They buy in bulk and make it in volume.

They are probably not losing much at all. Especially if they are selling larger volume items in another category.

Getting feedback is HUGE so lose a bit on small sales to make big profits on the bigger ticket items.