Amazon 3rd Party Fees Explained
February 5th, 2010Yeah, I’ve done sales of books my books through Amazon’s Marketplace for 3rd party book sellers.
Mr. Curtis has the right idea, but Amazon makes a little bit more than 3-4% of sale. It’s more like 6-15%, plus an additional $.99 from the smaller sellers, plus an additional “closing fee” of $1.35.*
Way Marketplace works: most of the sellers have a drop-ship arrangement with Ingram, Baker & Taylor or some other wholesaler. Amazon takes the order from the customer on behalf of, say, InterWebBooks. That order is automatically processed, with emails going to the customer, and an EDI (Electronic Data Interchange) file, with Book information, Customer Name, Address, Shipping Method (post office or UPS), is uploaded to Ingram.
Ingram quickly sends out the order with an InterWebBooks logo on the box from one of their warehouses.
IWB, for the curious, is paid by Amazon within 2-3 days, and Ingram is paid within 30. This is a big part of why prices from 3rd party sellers are often lower than you’d think possible (as little as 55% of the cover price, plus shipping of course).
That 6-15% of 3rd-party sales is, per some earlier reports, one of the most lucrative parts of Amazon’s business, and could easily represent a bigger net profit for them than does warehousing and shipping the books themselves. They’re probably not losing as much from the Macmillan stand-off as you’d think.
It’s $99 a month to get the really good Marketplace store up (and avoid paying $.99 to Amazon per sale). To integrate automated feeds with Ingram (after credit checks and such), you’d only be out-of-pocket $10k or so from the South Asian programming shop of your choice–they study Ingram feeds and APIs in that part of the world.
/Ironically, prior to a shift by LightningSource in 2005, most print-on-demand books were shown as “available in six days or from these sellers,” so at the moment Macmillan’s living the way us peons used to.
*Edited to add closing fee.
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