This is a guest post from Cady. You can read more from Cady in her fiscal fitness journal in the Get Rich Slowly discussion forums.

While rearranging my music collection recently, I decided to pull out anything I hadn’t listened to in a year. I had quite a stack. I looked at some of my titles and decided to sell them. I’d never really considered it before, but since I buy most of my new-to-me music used on Amazon I figured, “Why not try selling some there too?”

I logged into Amazon and set up a sellers account with a few clicks. The sellers account interface is easy to use. For each title, I decided on its condition (used-acceptable for example), and then set my price as the lowest. I sat back to see what would happen.

Making money
I’ve now sold 28 titles in about two months for about $160 in profits. Let me give you two examples of how the shipping and commission works.

The last CD I sold, Amazon charged the buyer:

  • Item Subtotal: $5.50
  • Shipping: $2.98
  • Total: $8.48

Amazon credited my account:

  • Buyer’s price: $5.50
  • Amazon commission: ($2.62)
  • Shipping credit: $2.98
  • Your earnings: $5.86

So, in effect, on this one they gave me $0.36 towards the shipping since I put it up for sale for $5.50. Their cut comes out of the buyers shipping costs on this one. The actual shipping cost to me at the post office was $1.61. Less the $0.36 shipping credit up to this point, I’ve cleared $4.25. The envelope I shipped it in cost me $0.33 at Walgreens on sale with a coupon. So I earned $3.92 on that sale.

I’ll use my most expensive one as another example:

Amazon charged the buyer:

  • Item Subtotal: $12.00
  • Shipping: $2.98
  • Total: $14.98

They credited my account:

  • Buyer’s price: $12.00
  • Amazon commission: ($3.59)
  • Shipping credit: $2.98
  • Your earnings: $11.39

So, in effect, on this one they gave me no money towards the shipping and took some of my profit as well. The shipping costs at the post office was still $1.61. So far, for me, it has been no more than $1.84 to mail a CD First Class via USPS, and that is if it is a double disk or has a heavy booklet. So minus the $1.61 shipping credit and the $0.33 envelope, I earned $9.92 on this sale.

My system
I keep everything I have for sale on Amazon in a bag separate from my collection while waiting for an email to arrive that says “Sold, Ship Now.” When an email arrives, I go to the sellers account page, click on the order and then click on “print shipping label.” I print out two copies, one for my records and one to go inside the package. I cut out the buyers name and address, tape it to the front of the bubble-mailer and I ship it either the same day, if I get the message early enough in the day, or the next morning when I go to work. While at the sellers account order page, I also send a short note to the buyer that I’m mailing it out first class via USPS.

Amazon gives you an option to get paid either in a Amazon Gift certificate, or every other Saturday they will automatically dump the balance into your checking account. There is a magic threshold of sales that will make Amazon tell you that you can no longer use the gift certificate as an option. You must change to a checking account. That would be a good thing however since that means you are selling a lot of items.

If you don’t want to wait for your money you can ask to transfer the balance to your checking account whenever you wish. In my experience, though they say it might take up to five days to credit your account, my bank posts it in about two business days.

Your success will depend on the type music you have. The more common, the less you’ll get for it, and then it’ll be less cost effective to ship. My personal cutoff is $4. Below that I’m not making enough money to burn the gas to go to the Post Office. My imported Jazz, Gypsy music, Govt Mule and the Grateful Dead off-shoots (like Lesh and Friends, or Ratdog) all make good money. Steve Earle ain’t selling real well.

Lastly, although I’m losing in double-digits percentage-wise on commission, fees and shipping, I’ve gained about $160 I didn’t have otherwise. Those discs were just sitting there, and I’d have had to put out quite a bit of effort without using Amazon to turn that stack of 28 CDs into $160. I wouldn’t have made $6 per disk at a yard sale. I’ve tried visiting local used CD shops and I get maybe a $1 a disk if I’m lucky.

So what it amounts to is: I’m paying Amazon to borrow their infrastructure to reach a few million shoppers who were not going to be coming to my yard sale. I probably won’t try to sell other things and I have to confess the sale of books for me on Amazon is a waste of time. But I appreciate the tiny income stream that this has generated for me in the last few months.

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