The past few weeks I’ve been on the hunt for several second hand items. I’m currently on the lookout for a food processor, a chess set and some pre-finished hardwood floor remnants (for a tiny hallway area and small room). Lately I have been extremely amazed at the total lack of price awareness some of these sellers have. In the hardwood example, I’d say the majority of sellers are trying to sell the extra boxes they bought for close to the same price as they purchased it in the store. Just because an item is still new in the box, does not mean that you can charge the new pricing. I’d say most people don’t do any research before hand to check current market pricing.
Craig’s List: Buyer Expectations
You see, as a buyer in the second hand market, I expect a discount for the following reasons:
- You are not a store and you don’t have a return policy.
- I am taking a risk and don’t know how the item has been stored or misused while it was in your possession.
- You likely don’t have exactly what I need, so I don’t get to be as selective with my color/finish/brand, etc.
- If you’re selling something by the quantity, like flooring, it’s likely you’re not selling the exact quantity I need. Plus, if you only have a small quantity, there is going to be a very limited amount of buyers who can find a use for your product.
- I’m not comparing your product to the exact same brand/model that you bought in the store, but the cheapest version of that product that I can buy brand new. Ie, should I buy a new low end X or a higher end used version of X?
- Your product is old and if it is still around in the new retail market, it’s usually been heavily discounted and more often than not costs a lot less than what you paid (especially when it comes to electronics).
If I used the flooring as an example, I want a cheap pre-finished hardwood floor. I am willing to compromise on species, width, color, etc. I know in the store I can get that for about $2.50/ft for oak. I really don’t care if you paid $6/ft or $12/ft for your cherry floors. I’m not comparing this to the new price, but to the generic brand’s price because it’s easier for me to just buy exactly what I need direct. I have 3 small rooms to do and if I were to buy the new floor, I’d just get the same wood for all 3 rooms. If I’m going to take an aesthetic hit by having a hodge podge of flooring, I expect it to be less than $2.50/ft.
The I-Pad Example
Apparently I’m not the only one who’s experienced this of late. Here’s a hilarious ad I found this week posted on my local craigslist entitled: “To all You I-Pad Sellers”
A refurbished 1st generation iPad 16gb wifi costs $349 direct from Apple, shiny and perfect, with warranty and a new battery. A brand new iPad 2 with the same specs costs $499 at Best Buy.
It would probably be good if you fine CL sellers priced your 16gb iPads for, you know, LESS than that. Because those are new, have warranties, can be returned if they don’t work, etc. Got it?
When I looked at the I-Pad prices, sure enough, they were all in the $400-$450 range. I wasn’t shopping for one, I was just curious to see how far down the prices dropped on the Gen 1 version…apparently not very much just yet. I’m generally not an early adopter but I do like technology, so I watch prices on this type of stuff.
The Chess Set
The $30 Chess Set
Here’s another example. My son’s birthday is coming up and I want to get him a new chess set. We have a tiny 6″ travel one that I can’t even tell which pieces are which but he loves playing. Anyway, there’s a person selling a wooden set on Craig’s for $30. Right now, there are at least 5 pages of wooden chess sets on Amazon.com from $12.99 to $29.99 (and over $25 is free shipping). I decided to email the guy anyway and let him know there’s a similar set at the same price on Amazon and would he go down on his price. Here is part of his response:
$30 is really the best i can do and I’m already losing money on this.
He also said his set is nicer, bigger, and still new. But dude, are you really thinking you are giving me a deal on this? You’re not. Just because you paid more than $30 for this set doesn’t mean I think it’s a bargain when there are eleventy million other ones for that price or lower that are brand new and returnable.
Money Perceptions
In my follow up email, I was so tempted to give him some unsolicited advice but I didn’t. Instead I’ll save it for this forum. So here’s my lecture. If you perceive that selling your stuff on the second hand market is “losing money” then you’ll inevitably end up disappointed and bitter with the whole second hand experience. If that’s what I thought about all the kid stuff that I re-sell for pennies on the dollar, then I would have never sold a thing. I would still be tripping over all of it in my house and I’d be over $1600 poorer.
I think it’s a kind of second hand karma. Sometimes, I’m the one getting a bargain on an item someone else paid full price for and other times I’m the one giving the bargain. In the end, it all comes out in the wash.
I really didn’t know if it was going to be worth my time selling the kid stuff, but the stupid lead testing paint law (which prevented donations to many charities) made me want to sell my stuff instead of it going to a landfill. I kept track of my earnings out of curiosity’s sake. Plus, the longer you hold onto an item because of your resistance to lose money, the less that item is worth. If you’re going to be selling second hand stuff, do yourself a favor and keep a little spreadsheet. You’ll be surprised how much those $1 items add up. (For me, I made at least $500 on $1-3 books and cd’s alone.)
Lastly, think of selling your crap as “earning money” not “losing money.” You lost the money long ago when you made that bad decision to buy the item you’re not using. The sooner you realize your mistake and resell it, the more money you’ll be able to re-coup. I remember buying the PX90 videos after my second child. After two months of sitting on my bookshelf and not being used, I ended up reselling them. Luckily I bought them off craigs at a discount and I could just go back and sell them for the same price. If I tried selling them now, they’d probably be worth next to nothing.
Do I sound like a total tightwad, or does my pricing logic make sense?
PS. I found a Cuisinart Food Processor at a Tag Sale this weekend. Hurray, I can make my pie crust again.
PSS. Isn’t it always the case when you give up your search for a second hand item and buy a new one, you then start seeing it everywhere? This recently happened to me with a booster seat I bought. I’ve since seen 2 of them at tag sales after not seeing a single one for over a year. Grr.
I try not to rant too often but this one I think was worth a post. Thanks for listening.
{ 36 comments… read them below or add one }
Yes, all good advice.
And of COURSE you’re going to be losing money selling something used. That’s what depreciation is. Most things do not go up in value after you buy them!
We don’t buy much used and very rarely sell anything. Time is so precious that the most price comparison we do is on the internet, and ebay or amazon are the extent of what we buy used. But we buy very little, so it works out. Well, I guess we’ve bought used furniture, but from a store. We do accept hand-me-downs and give hand-me-downs!
Nicole – Depreciation. I should post a definition of it on Craig’s just as a reminder.
Exactly! I am looking for a portable air conditioner right now. It would cost me $500 to buy the one model they have at Home Depot. The sellers on craigslist are constantly saying “I paid $600 for this new!” and listing their items at $450, etc. But since there are other sellers on craigslist selling portable air conditioners for $250 or lower, no way I’m going to pay for the $450 one!
I think that your “rules” of craigslisting are pretty sound. The price you paid for the item is a sunk cost. What you are faced with now is a) keeping the item, not using it, not getting any money b) selling the item and getting money. Thinking about sunk costs is a big financial mistake that our brains trick us into making all the time 😉
@Nicole – you are spot on about depreciation of household items. Similar to cars, typical household items lose value the minute you walk out the store with them.
Kellen – I gave my AC unit to my daycare lady. I thought that was a good investment for my sweaty kids. Agree on depreciation. It’s a good way to look at it.
Kellen, I recently bought an 11,000 btu portable AC unit at Lowe’s for $299 + tax. It wasn’t worth the 50 bucks savings on comparable *used* units on Craigslist. And this one has a store warranty.
Yes! I can not for the life of me remember where I read this, but it there is a theory about the further away you get from a large city they more expensive crap gets on Craigslist. I do not want your avocado green pleather chairs for $75 a piece. I guess depreciation is a hard concept to grasp:)
Niki – That’s very interesting. Must be a supply/demand thing. Lots more supply in places with a lot of people. I think they call that avocado furniture “mid century modern” in and around my parts.
I have a lot of extra stuff sitting around that I want to sell, but first I have to get over the pricing issue, too. For example, I have two pairs of Earth shoes that I bought thinking they would be awesome. I think I only wore each pair once or twice and then decided I didn’t like them. Those are expensive shoes; trying to figure out a fair price for them has been tough for me. I’m tempted to just add them to the next clothes donation I make to Salvation Army, but I’d rather get some cash for them at this point.
Putting items on Craigslist is something I’m a bit wary of, too. I once sold a used faucet that way and one year later the seller sent me a hateful message about how I sold her a malfunctioning faucet. Really, a year later?!
I did have some success getting rid of a few items this weekend. I dropped two bags of clothing and mixed items off at the Salvation Army (and got a donation receipt), sold some books at Half Price Books, and sold one of my Eglu chicken coops. A positive cash flow weekend! Woot!
Linda – great progress on ditching stuff. Sell those earth shoes now. The longer you wait the less they will be worth. Ebay should give you a good sense for what the going rate is. I bought some shoes off there recently. If I were to guess they were about 1/4-1/3 of the cost of new version of those shoes. They were worn though.
I agree with everything you say in principle (esp about the ipads). But the reason they still have them is because they are able to sell them. Sometimes people are looking for cherry floors and those are the kind of buyers they are targeting. When I price an item on CL, I think a lot and do some research before pricing it. I hate it when people try to lowball me and at that point I have to keep myself in check as not send a rude email back to them. Some people are so obnoxious while haggling that I feel I would rather donate it than sell!
Ella – my husband’s theory is that there must be a bunch of dumb craigslist buyers that automatically assume it’s a deal, so again, it’s a supply demand thing. Someone out there is buying the stuff at inflated prices, so it’s driven the market price up. Perhaps that’s what’s happening. Perhaps those items are still sitting somewhere. My neighbor got offered $20 for a kitchen playset. She wanted $40 for it. She ended up saying no and donating it to the salvation army instead…like you.
I agree with most, but I disagree about your flooring example.
If new oak runs $2.50 and new cherry runs $6, then expecting to get new-in-box cherry for below the oak price is unreasonable. The price of cherry is the price of cherry and the price of oak is the price of oak. You can’t compare apples to oranges and then say that you shouldn’t have to pay more for oranges because apples are cheaper.
Kh – but I’m not shopping for oranges and expecting apple pricing…I’m shopping for fruit.
If apples are the cheapest kind of fruit, why would I pay more for oranges, even if they are a good deal? We are putting these floors in a neighborhood where we won’t get any benefit from a premium product, so to me as a consumer, upgrading to cherry is just a complete and total waste of money.
If you happen to luck out and find that perfect buyer that’s specifically looking for that shade of cherry you have for sale then it’s a win win but in the second hand market it’s all about compromises.
That’s probably why ebay prices tend to end up higher than craigslist, even ignoring shipping costs. On ebay there probably is someone looking for that exact item.
For sure. When I shop ebay, I’m looking for something very specific. I never just go to browse.
Then you’re not the client/customer for those items. I don’t understand why you expect someone to sell oranges for apple prices just because YOU are looking for apples. IMO that’s unreasonable and if it were me, I’d be complaining about you as the irrational and unreasonable Craigslist buyer – not because you wanted me to take a loss but because you wanted me to sell you X for Y price simply because it was what you wanted.
If you won’t get any benefit from cherry floors, then obviously that’s not the product you should be shopping for. But complaining or calling someone inept because they aren’t in the same situation you are (not caring about the value of cherry) is, IMO kinda rude.
KH- Thanks for sharing the other perspective on this. I hope that instead of getting offended, a seller sees low offers as a backup plan. When I email people who are not selling oak, I tell them my situation, what I want to spend and end with “Please consider me as your backup plan if you don’t move your leftovers in a reasonable amount of time.” That way they have the opportunity to find other buyers but have a way to move their product if no other buyer materializes. So far, the ones I’ve made an offer to are still listed up there 2 months later at the same price. It very much has to do with the quantity they are selling. If someone had enough to do a decent sized room, then the value goes up and the inventory moves quickly because the number of potential buyers goes up. If someone only has a couple of leftover boxes, then you limit yourself to people who want to do a hallway or entryway. Then if you narrow those buyers further by species of wood, you’re approaching 0 potential buyers pretty quickly. If they got offended by my offer and just hit the delete button instead of archiving my email as a backup, then they miss out if they change their mind months later and are still sitting on the inventory.
My opinion is that getting offended only hurts the seller. Getting emotional about a business transaction can lead to poor decisions. If someone thinks I’m rude by communicating my target price, then they should put Price Firm on their listing. From my point of view, I think I’m being courteous for communicating what I think the going rate should be and making an offer. When I am selling stuff on craig’s, I’d much prefer having someone contact me with a low offer vs radio silence. At least that’s some indication of market price. I consider all offers I get for my stuff as serious offers.
KH, I really appreciate your comments and I think they are well thought out and interesting, so please don’t stop making them but can we agree to disagree on this one?
I agree with your points, but I just am bothered by the fact that you would label someone as inept simply because they would prefer to wait and find a buyer who isn’t looking for a generic product with generic pricing.
I buy and sell a lot of stuff online as part of my side biz. Quite often I will have people try to lowball me based on some criteria they have or see as important. Sure I could accept the offer, but if time isn’t of the essence for me, I might keep the item listed or even take it down and relist it again a few months later. Often when I do that I do eventually wind up selling the item at a price much closer to what I want.
I guess we will just agree to disagree on this one. 😉
I guess this is why, in lots of cases, garage sales are still king when it comes to Used items. I’ve been looking for a simple bunk bed for weeks now. I just found one on target for $179 with free shipping!!! Nothing on CL comes close. I wish I could post your blog on CL LOL
Mutant – I know right. Just because you paid $1000 for your bunk beds back in 1980 doesn’t mean they are worth $500 now, especially when I can get a new set for $200. I was searching for those last year and finally gave up. The kids can stay in the beds they have for now.
If people list their items for too much on CL then they won’t sell. I agree that some people’s pricing is delusional but if their stuff doesn’t sell they will eventually figure it out and adjust their price. That being said I have had some luck selling stuff on Ebay for almost as much as they cost new. If the buyers are willing to pay that much I am willing to take their money.
Andy – I agree on ebay. People are looking for more specific items, so they will pay a higher premium. It doesn’t hurt to get as much money as possible. I remember my son loved this music thing for his crib and it broke. I got another one and didn’t care about the price, just as long as it was the exact same one.
Definitely agree with this! You’d be surprised, but with some Ikea furniture I was able to sell at near the full price, without losing too much money at all! I was surprised because in most cases the person would also need a van or something to pick it up.
Some other stuff depreciated a lot more, like my curtains, and the futon was really hard to sell although in my opinion it was a fine futon. In the end I gave it away for almost free… happy that someone picked it up on the last day, saving me from disposal charges!
Invest It – good job on maximizing your profits. How did you figure out how to price your items. Were there similar ones online? I hate futons. They aren’t comfortable to sleep on or sit on. No surprise that didn’t sell. I couldn’t even give away my popasan chair. Remember those. I thought it was so cool when I got my first apartment until I tried sitting on it.
Yep, target similar prices though I was still shocked when we got over 10+ replies in like a day for the Ikea dresser, and it wasn’t even listed for that cheap. I think it was within 80% of new!
My girlfriend felt the same way about the futon, but I liked it…
I agree with you 100% I’m trying to get my wife to go along with this as well as we have gotten into the habit of doing periodic purges of our kids’ toys on Craig’s List and through garage sale. Unfortunately, she prices things at what she thinks she would find them for in stores, or factors in sentimental value. I price to make the stuff move…
Travis – Yeah, toys are tough. They depreciate like crazy. Those talking elmos everyone was clamoring for a few years back…are selling for $1 at tag sales now. I actually buy my kids lots of toys at tag sales so I can scale back on the new ones during the holidays.
You are so right about how people should consider it as making money instead of losing money. If you bought something, it is a sunk cost, period. I don’t blame people for wanting to maximize what they can get for something, but if that is the case, then Craigs List may not be the best option for selling your stuff.
People also price items based on emotions. But, those are the sellers emotions and not the buyer’s, so they need to price the items objectively if they plan on actually making a sale.
I don’t know… There are people who will buy anything on Craigslist. I try to set reasonable price leaning a little high because I know I can always lower the price. I don’t price it as high as new though. Usually 50-75% and they move pretty soon.
I have noticed that a lot on craigslist here, and it is sad because we live in a city with three colleges. If someone just waits still May craigslist heats up with all the deals. Any other time, people are trying to sell their used items for a new price. If I can get the same thing or similar online for cheaper, I won’t buy it used, why is that so hard to understand.
I agree with retirebyforty. There is nothing wrong with pricing something reasonably to where both parties are benefiting. If you have taken proper care of the item in question and it still works fine, then there is no harm in asking a decent price to make it worth your while. Just because you’re not using it now doesn’t mean you won’t next month. I would never go about asking retail price, because I also agree with your reasons for not having to pay that on second hand products, but for someone to receive a quality item at a discounted price should also be a blessing. Sometimes I think we are quick to expect things for much less or next to nothing, but that doesn’t help out our fellow neighbors.
Oh, I agree with your logic. Totally get it. The whole loss mentality of that seller you mentioned is amusing. Has the guy heard of a sunk cost?
Great post!! I don’t buy a lot secondhand, but when I do I have the same expectations as you. I recently listed a designer dress on eBay that I paid over $600 for. I set my reserve price at $200 — I felt that was fair, I didn’t think there’d be any way to get close to what I paid back after 2 years and more wears. Lucky me it sold for $710 but that was a huge surprise, I don’t ever expect to have that sort of luck again!
Bridget – wow. I guess quality items do hold their value. I’m finding similar results with high end furniture too. Well made things have a high resale value.
You were off base on your price analysis of the chess set.
Your picture is of a Staunton design Tournament legal Chess set.
This design is patented so they charge a premium these are the same pieces they use at all serious chess tournaments.
From the picture it looks like it came with a quality wood one piece board and storage drawer to hold the pieces. I have a similar set and what you can’t tell from the photo is the bases of those chess pawns is an inch the Staunton set has large pieces. So despite the appearance that is likely a fairly large board with 1.5 inch squares.
It may not be worth that for you to give to your son if your not that serious about him learning chess.
I found the same pieces with a lesser board for $66.99 on Amazon.
http://www.amazon.com/Tournament-Staunton-Complete-Chess-Set/dp/B000SOGHQ4/ref=sr_1_21?s=toys-and-games&ie=UTF8&qid=1311472625&sr=1-21
You better be glad you didn’t trash him I would have paid that for a second set in a heart beat.
metamantis – I did actually buy this chess set and had a followup article on it with my change of heart.
http://firstgenamerican.com/2011/07/22/second-hand-buying-the-chess-set-continued/
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