Why do some book sellers on Amazon and eBay charge such outrageous prices for their books? Is anyone really so stupid that they would pay $999 for exactly the same book that they could buy for $10? I'm not talking signed first-edition leather-bound Dickens vs a mass-market 20th. c. paperback. Look here at the top of the page and at the bottom. (I have one I'm about to put up on Etsy, and I'm asking nowhere NEAR $1000 for it!)
I've wondered the same thing. I ran across a textbook listing that was so expensive that I could have ordered brand-new books for my entire class for less.
My brother's hypothesis is that the sellers are using automatic pricing algorithms to adjust their prices based on various factors. Then when something goes awry, the price ends up skyrocketing without any actual person looking at it to realize how absurd it is.
This plus drop-shipping is it exactly.
Drop-shipping is a practice where the seller of an item doesn't actually own that item yet. Say I'm looking for a copy of a particular DVD, and I see a hundred different choices ranging from $6 up to $50. The professional sellers with feedback in the tens of thousands all have theirs priced around $7.99, and anyone cheaper than that seems to be an individual person with almost no selling history. I decide I'm willing to pay a few extra bucks to work with a seller who will most likely ship quickly and have good customer service if the DVD ends up being scratched or broken, so I go ahead and pay the $7.99.
In that situation, I assume the seller has a warehouse full of DVDs somewhere and pulls mine out for me. A drop-shipper, though, just turns around and automatically purchases the DVD from that $6 seller and has it sent to me directly. The cheaper seller may or may not be professional, quick to ship, telling the truth about the quality, etc. (so basically, the same risks I would have taken on if I had paid the $6 myself). The professional seller I bought from, though, ends up taking the risks - if there's a problem, they're on the hook for it. The downside is that if I pay them $7.99 and suddenly all the $6 sellers yank their listings, the drop-shipper has no product to send me. He won't pay more and take a loss, he'll just send me a note saying "Sorry, I can't complete your transaction!" and he'll get a slap on the wrist from Amazon/eBay/whatever and he'll keep on selling things he doesn't own yet.
Here's where the brain-hurting part comes in: the drop-shipper's computer algorithm is usually based on the prices of other sellers. It might be set to sell for $1.99 higher than the cheapest other seller, for instance. If the cheapest seller rises to $9, the drop-shipper will automatically raise their price to $10.99. There have been some fantastic cases where there are only two copies of a rare book (self-published textbook or somesuch) and both sellers are drop-shippers - the result is the price rising incrementally at a predictable rate until someone realizes what's going on. I saw a blog where a professor was jokingly excited that his out-of-print book was available for the low, low price of $10 million dollars!
I personally think it's a kind of questionable practice, because there's no repercussions for having promised to ship an item and then not actually having it
You can usually tell the drop-shippers because they're the ones who don't give shipping discounts for multiple items. They're also more likely to have a super-low item price and a super-high shipping price - $2 for a DVD and $18 for shipping, for example. They justify it by saying they really do have a higher shipping and handling cost, since the handling is outsourced to the person who was trying to sell the item in the first place