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How do you handle the game within the game: shipping & handling. Isn't that where new sellers in general (including brick and mortar) generally lose money?

you don't. i use amazon FBA. i ship boxes of inventory to them and they handle fulfillment, returns, etc...

it's easy to lose money by sending in trash inventory that doesn't move. they kill you with storage fees after 6-8 months.

for people losing money on shipping and handling... that's a skill issue.

i sell on 5 platforms aside from amazon, which i fulfill on my own. all you have to do is pass the shipping cost to the customer. simple and effective.

also - if you want to offer free shipping, just include the cost of shipping in the price. so instead of listing that book for $20 + shipping, list for $25 (or whatever your cost is) with free shipping.