Sometime in early 2013, in Dallas, Texas, a generous reader donated his impeccable first-edition copy of Philip Roth’s Our Gang to the local Goodwill store, its royal blue dust jacket gleaming as brilliantly as it did in 1971.
There it sat on a shelf, priced at $1, until a semi-trailer from Books Squared whisked it away among 3,000 other leftovers. At the Books Squared warehouse in south-west Dallas, Our Gang was checked and processed by receivers and a scrupulous quality-control team, who deemed the book “like new” before scanning it into their computer system to be sold online.
Dynamic pricing software cross-referenced every active listing of a used, like-new, hardcover copy of Our Gang across online marketplaces like Amazon and Abebooks, then matched the lowest price. Last March, four months after it was listed, I bought the book for a penny, and Books Squared shipped it to my apartment in Toronto. This handsome volume is sitting proudly on my desk right now.
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Online, such literary treasures are in ample supply. But deals this good raise an obvious question. It clearly took a lot of time to usher Our Gang from the backrooms of Goodwill to Canada, where I live. So how does anyone make money selling a book for a cent?
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The only trouble is the low quality of that yield. Mike Ward, owner of Thrift Books – the largest of the used book sellers in the US and parent company to a number of subsidiaries, including Books Squared – likens the book collection process to “a very large salvage operation”. His network of warehouses is bringing in, on average, 15 semi-trailer trucks full of used books every day, but less than 20% of those books arrive in saleable condition.
The first thing Ward’s handlers must deal with is the garbage: “three-ring binders, Bibles, old Reader’s Digests, books that aren’t even books, books that are totally destroyed”.
From there the stock moves on to the receivers, who inspect each book’s condition and determine, by computer, its likely demand. “At that point they’re throwing away about 65% of what they touch,” Ward says – in part for the poor state many of them arrive in, of course, and in part as a consequence of supply and demand.
“There’s a limit to how many copies of Jurassic Park I can sell,” he explains. “If I already have a thousand in inventory and I think I’m only going to sell 500 in the next three months, I don’t want any more.”
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Root through enough charity shops and library discard piles, and you’re bound to come across a few valuables. In such cases the used book seller becomes a sort of antique dealer: with a few keystrokes they can put a true rarity online where those most interested can find it. Perhaps that’s why Mike Ward says Thrift Books is in the business of “matching people up with the treasures they want”.
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Penny books, of course, don’t seem quite so lucrative as a $45 volume on cattle. “If you talked to me 10 years ago and said that you’d be selling books for a cent on the internet, I’d have said that’s impossible,” Roberts says. But there’s some money to be made for those who are, as he puts it, “extremely efficient”.
The price point is partly a result of the market’s downward pressure: at a certain level of supply and demand the race to the lowest price swiftly plummets to the bottom. What remains inflexible is the $3.99 fee Amazon charges the buyer for shipping. From that $4, Amazon takes what they call a “variable closing fee” of $1.35. They also charge the seller 15% of the item’s price – which in the case of a penny book is zero. That leaves $2.64 to cover postage, acquisition cost and overhead.
“All told,” Mike Ward concedes, “we only make a few cents on a penny book sale like that.” Now that hardly seems like much, true. “But keep in mind,” he adds, “that last year we sold 11.5m books.”