The time I bought 1,000 CDs on Craigslist (& sold on Amazon for big $$$)

(Note: CDs are a partially gated Amazon category, and not all sellers are allowed to sell them)

When I saw the ad, I knew this was going to be big: “1,000 CDs – Prog Rock, Metal, Psychedelic, More – $100.”

This one seemed too good to be true. And on Craigslist, that means it usually is.

You’ll see CD collections for pennies on the dollar semi-regularly. Generally, it means you’re getting a giant wallet of CDs someone found under the passenger seat of a used 1999 Saturn they just bought. You’re getting the CDs for a steal, but Amazon sellers are out of luck because usually you can expect CDs only and no artwork.

I texted the seller to shake him down for details, but my expectations were low. Over the course of a dozen text messages, the details of this “1,000 CDs for $100” deal emerged:

First, the “1,000 CDs”, when I asked him, became “approximately 1,000 CDs,” and he admitted he hadn’t actually counted. Astute readers of this site will know I consider everyone who posts on Craigslist to be an egregious liar, so I did the rough “Craigslist math” and estimated the “1,000 CDs” was closer to 600. Red flag #1.

Second, he told me there was “one catch…”: The CDs had all their artwork. However, the artwork and cases were in boxes, while the CDs were in giant CD wallets. For each of the 1,000 (or 600) CDs, I would have to hunt through every case to reunite it with its respective CD. This sounded like a massive project, but at 10 cents a CD, I could work with it.

Third, he was being evasive about meeting, then cancelled last minute after we’d scheduled a time and place. I was getting increasingly suspicious. I don’t give second chances with being stood up, so I told him if he still wanted to make the sale he’d have to drive the 30 miles to my house.

This time, he showed. I looked over the collection in his trunk, and while there was no way to do an exact count, I could safely say it was in fact a ton of CDs. I took my chances, gave him the $100, and in a moment I was standing on the curb with 6 giant boxes of CDs.

Surveying the lot

Despite my initial concerns, once inside my house I quickly realized this collection was a goldmine.

95% of the CDs were flawless, looking like they had never been played.

And the CDs were in two genres that had disproportionate value: Obscure metal and classic rock. TONS of Grateful Dead and Yes CDs, and tons of CDs from bands you haven’t heard of like Emperor and Dark Throne.

Ever have a buy that was so good you kind of wondered if it was stolen? This was looking like one of those scores.

(And the guy I bought them from seemed a little shady, so you never know…)

Sorting the lot

The seller wasn’t lying: For each of the 1,000-ish CDs, I had to hunt through 1,000 cases. I quickly realized I would have to alphabetize the cases to cut down the searching time. This project took many hours.

Reuniting the CDs with their proper cases took many more.

As I got halfway through the collection, it was starting to hit me that my “Craigslist math” – assuming that the seller had exaggerated his numbers – was right. There was no way there were 1,000 CDs here. I was bracing myself for 500. While a preliminary survey confirmed there was no way I was losing money, I was prepared for my expected profit being cut in half.

The totals

When all the sorting was finished, here were the totals:

780 CDs total. Not 1,000, but it could have been worse.

168 CDs missing artwork, and therefore unsellable.

Leaving 612 potentially sellable CDs. But I hadn’t priced them yet, and there remained the potential for a lot of them to have no value.

After ruffling some feathers in the past by calling most Craigslist posters liars, I feel somewhat vindicated here: I was told I was receiving “approximately 1,000” CDs complete with artwork, and in fact received just over 600. Mis-estimating by 40% is never an accident. It was almost certainly some deliberate deception, but I knew I was still making money so I was happy.

Pricing the lot

I don’t do a lot of business in CDs, but have bought some collections in the past (one of which was another Craigslist score I covered here). My general experience with CDs can be summed up as: They’re good for a little supplemental Amazon revenue here and there, but CDs will never be a profit center.

What’s more, my (limited) experience selling CDs via Fulfillment by Amazon has indicated Amazon Prime buyers are not willing to pay vastly higher prices for FBA offers like they are with books. I’ve watched quite a few well-ranked CDs that were selling for a penny, sit for many months at my $7.99 FBA price (which was still much lower than Amazon‘s price). While my evidence is limited, I’ve made a mental note to price conservatively with CDs, and don’t price more than $3.99 above for all but the most well-ranked titles.

Considering this, my pricing strategy was to price a flat $3.99 above on all CDs except for those ranked 5,000 or better. I chose this number somewhat arbitrarily, and will be watching the results closely. I hate to price too low, and won’t hesitate to reprice higher if I notice CDs ranked a worse than 5,000 start flying out the door. Like they say: “If they sell too fast, you priced too low.”

Here was my formula:

Sales Rank 5,000 or better: Price high, all the way to within 50-cents of Amazon‘s price.

Sales Rank 5,000 or worse: Price a flat $3.99 higher than the lowest Merchant-Fulfilled price.

Penny CDs ranked 5,000 or worse: Price a flat $4.99 (I didn’t want to bother with CDs that would bring me less than $2 net profit, which is roughly the amount you’ll make off a $4.99 CD).

(If anyone who has experience selling CDs via Fulfillment by Amazon has input on this, please contact me. I’m interested in having my assumptions about the proper pricing formula adjusted).

Pricing the 600+ CDs took 2.5 days. It was grueling, but I powered through it, expecting a big payday.

The results

I’ll start with the most shocking result: Of the 612 CDs, only 35 had no value.

This is a staggeringly high percentage of CDs having value. By “no value”, I refer mostly to CDs that had FBA competition below the $4.99 threshold. In other words, this was a very high-quality collection.  Note to self: Obscure metal CDs are worth money almost every time.

There were about 65 ranked worse than 200,000, that were also penny CDs that I was pricing at $4.99 (meaning I wasn’t owning the top spot in the listings). So it remained to be seen how quickly, if at all, CDs of this rank would sell at this price point. This was an experiment (Though not a risky one. After all, I only paid about 15 cents per CD).

I emerged from my 2.5 days of pricing and listing with these results:

Total CDs listed: 577

Average Sales Rank: 128,000

Total sales price: $5,232

Average value: $9.06

Average payout: $4.87 (According to Amazon‘s FBA revenue calculator, $4.87 is the net payout for a $9.06 CD).

Total estimated net profit: $2,809

Hold on Peter, shouldn’t you subtract the $100 cost from your “net profit”?

No. Here’s why:

I used my “eBay leftovers bundling technique” (described here) with some of the 168 CDs that didn’t have artwork (missing covers, back covers, or all artwork). I divided them up by genre, and found there were 83 CDs I could classify as “classic rock.” I put them all into a lot and listed them on eBay. There was a bidding frenzy, and I got $68 for the set. Meaning that after my first $32 came in from FBA sales, profit from the rest of the 600+ CDs was pure gravy.

So, to be fair, my expected net profit is $32 less than $2,809.

Bringing my expected net profit to, drum roll…. $2,777.

Endnote

I seem to average one big Craigslist score a month, but this was by far my biggest CD buy to date.

The CDs hit the warehouse just before posting this, and in the first 6 hours my listings were live I made over $150. So it’s alllll gravy from here on out…

PS: Please send your input on the best pricing method for selling CDs with Fulfillment by Amazon. I’m interested in knowing what CD buyers will pay, and striking the right balance between Amazon sales rank and pricing.

 

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