Over 500 books. A penny each. Free shipping. That’s 500 books for $5. Link below. An Amazon mispriced items heist that will go down in history.
Updated: After posting this, FBA Mastery readers grabbed up every book within minutes. And I received an angry email from the seller. I stand by my reasons for posting this, which are explained later in this article.
The Amazon mispriced items book heist of the decade
This screenshot tells it all:
This is a real-time cautionary tale on why you shouldn’t use repricing software to manage your entire Fulfillment by Amazon (FBA) inventory.
Right now, the Amazon seller “Computech411” has over 500 books priced at one penny. That’s one penny FBA. That means free shipping.
If you’re still having a hard time with this math, that means you can get 500 books for $5. Right now.
(These are likely to be gone within the hour)
Publicizing this person’s colossal blunder is bound to be controversial. I’ll get to the ethical issues here in a moment.
Notes about this Amazon mispriced items bonanza
Before we go further, let’s cover a couple things…
- The article you’re reading gets posted and mailed out to thousands of people at 6am Pacific Time. I expect every 1 cent FBA book will be gobbled up by 6:15. Early birds get the worm here, but if you’re late to the game… Still worth a look. You never know.
- About 2/3 of the 800+ items in the storefront are FBA books for 1 cent. The other 1/3 are books priced more than 1 cent (but many of those are still absurdly low, in the 50 cents to $1 range).
Why am I not profiting from these mispriced books myself?
- I bought a few of the 1 cent books over the last hour, but by and large I’m not interested in adding 500 books to my cart, one at a time, in a process that could take hours with an uncertain return. Its late right now and I’m tired.
- It’s technically against Amazon’s policies to purchase books via Fulfillment by Amazon, and then resell FBA. I don’t shy from bending Amazon’s rules when the situation calls for it, but doing it 500 times might be courting a little trouble. (If you read Amazon’s policy on this, they politely threaten the loss of your Prime account for buying FBA and reselling FBA too often – though they don’t tell you how many times you have to do this before you get in trouble. Its worth noting that while Amazon can do whatever they want, they do not threaten the loss of FBA selling privileges – just your Prime account.
- It’s way more fun to just make a public spectacle of this.
Why would an Amazon seller list hundreds of books for 1 cent?
What is this Amazon seller thinking, listing hundreds of FBA offers for a penny?
For each one of these books, “Computech411” is losing somewhere in range of $3.50. For those that don’t know, this means for each sale Amazon actually takes $3+ from the sellers bank account. Makes no sense to list a book for 1 cent, right?
One of two things is happening here (and #2 is far more likely):
- This seller is ignorant about FBA fees. Maybe he switched over from merchant fulfilled (MF), where you can still make 10 cents (or whatever it is) off postage selling books for a penny. Maybe he never bothered to look up FBA fees, and doesn’t think its possible to actually lose several dollars on an Amazon sale.
- He let his Amazon repricing software run wild, and drop his prices to a penny. This is the most likely scenario. And precisely why I didn’t hesitate to make this public. Lowball sellers with overactive repricers who drive prices down have cost the rest of us ungodly amounts of money over the years. So I call this poetic justice.
Again, number two is far, far more likely.
Is it unethical to publicize this sellers mispriced item blunder?
Consider these two factors, and you’re likely to come out against me publicizing this:
Fact #1: This seller (probably) either doesn’t know most of his FBA inventory is priced at a penny, or doesn’t know he suffers a big net loss for each sale.
Fact #2: This post will cost him a lot of money (500 books x $3.50 = $1,750. Round numbers).
Despite those facts, I didn’t hesitate to publicize this. In fact consider this post (which will be read by thousands) a huge service to the Amazon selling community.
Public service announcement: Amazon repricing software is evil
Consider this a public service announcement on why you shouldn’t turn over all your FBA inventory to repricing software.
This incident highlights a point I’ve been making for awhile: Trusting all your FBA offers to repricing software is a fool’s game. Which makes this incident one very effective PSA.
Reckless, lowball, desperate-for-the-next-sale pricing practices combined with repricing software is gasoline poured on fire. And what you see here is the result.
The false promise of Amazon repricing software
There are great uses for Amazon repricing software for certain strata of inventory. But turning over your entire FBA inventory to an automated repricing tool costs every seller money. It costs the seller money – chasing the next sale, no matter how cheaply it comes. And costs all other Amazon sellers money – forced to follow them in the decent to penny-book status.
The argument against over-reliance on Amazon repricing software deserves its own article (and it’s not this one), but I could sum it up in one main point.
Since Amazon repricing software can’t “see” most FBA offers (despite what many will tell you), it’s functionally useless for anyone who prices media products intelligently.
Repricing software can be great in many categories, where there aren’t huge price gaps between merchant fulfilled offers and FBA (and the software can thusly “see” relevant FBA offers), but this does not apply to books.
Photo: The mindlessness of Amazon repricing software at work
If there’s any one cent books left by the time you read this, take a look at how the repricing software of mega-sellers instantly followed suit and dropped their prices. I just gave a cursory look at a few books, and quickly found one seller’s repricer tool had also dropped their offer to a penny.
And this is the work of software that is supposed to serve you.
Of course prices falling to a penny are not an inevitable result of using repricing software. But for those of us who see automated Amazon repricing as a liability when trying to get the most money for our inventory, situations like this are pretty funny.
I didn’t intend for this article to be an indictment of repricing software (and I have to mention none of my criticisms are of the people making the software – they work with the limitations Amazon imposes on them), but I doubt this seller set these prices manually.
Tragedy, or karmic justice?
And I’ve spent years trying to do the right (and smart) thing and match other FBA offers instead of underpricing them. Only to often to see my offer (pointlessly) underpriced by 1, 2, or 5 cents within an hour. So instead of everyone making money; overzealous, hair-trigger repricing tools force prices of everything down, everyone loses money, and the only people winning are the people getting paid are the repricing software companies.
So in the rare instance a repricer runs wild, drops prices to the floor, and other sellers swoop in to eat up the penny offers (like what is happening at this very moment with Computech411); I can only call this poetic justice.
That’s why I didn’t hesitate to publicize this seller’s costly mispriced book blunder.
Amazon mispriced items: A lesson in closing
You cannot on one hand engage in practices that accelerate a pricing race to the bottom – a game in which no seller wins and everyone loses – and assume a victim stance when your prices actually hit the bottom. It’s exactly what you’ve created, taken to its extreme.
It’s like playing with fire, and complaining when you get burned.
PS: Have fun shopping (here’s the link again). I encourage any critics and outbursts of righteous indignation in the comments below (I’ll approve all comments – even angry ones).
PPS: Some relevant background to support the points made in this article: