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Adventures in Aeron Chair Arbitrage

blog.priceonomics.com

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Re: Adventures in Aeron Chair Arbitrage

#71

Post by zecho »

zem wrote: post #65
zecho wrote: post #64

Earlier quoted context omitted.

I got a few where people were mad that I simply re-listed their item at a higher price than they sold it for. I'm sure they felt duped for undervaluing their product in the first place. As binarysolo pointed out in this thread, some sellers feel they need to urgently sell their items, so they under-price. I'd could afford to wait for someone to pay my asking price.

i can see where they might be mad, but i can't imagine what exactly they would say that wouldn't sound ludicrous when put into words.

Try selling or buying things often on CL for a week. You'll find most people are ludicrous to begin with.

Re: Adventures in Aeron Chair Arbitrage

#72

Post by whatusername »

georgemcbay wrote: post #17
whatusername wrote: post #6

Earlier quoted context omitted.

This point also applies to the $1 chair.

The $1 chair is very unlikely to still be a chair in a couple of years if it is sat upon for ~4160 hours. Perhaps you could still sell it for $1 as firewood, though. If you're happy with a "doordesk" and a metal or wooden folding chair, more power to you. I bought my own personal Aeron years ago, I've used it at multiple different companies and at home when I was freelancing. In the approximately 10 years I've been s…

Granted. There is completely a place for good tools that make you more efficient and work better/longer/etc.

My point was more that you could replace Aeron Chair with X (where X is anything that doesn't have a steep depreciation curve -- ie - something that's not a car or PC)

If you buy a used "X", it's very likely you can sell it for the same price a couple of years later. Essentially you can lease "X" for free.

Re: Adventures in Aeron Chair Arbitrage

#73

Post by yonran »

zecho wrote: post #64
zem wrote: post #60

Earlier quoted context omitted.

angry emails saying what exactly?

I got a few where people were mad that I simply re-listed their item at a higher price than they sold it for. I'm sure they felt duped for undervaluing their product in the first place. As binarysolo pointed out in this thread, some sellers feel they need to urgently sell their items, so they under-price. I'd could afford to wait for someone to pay my asking price.

Instead of being angry that they didn't maximize their profits, could it be that the sellers were _offended_ that someone would maximize profits with their possessions? I can imagine a couple reasons:

1) The Toy Story 3 plot: people want to find a home for their possessions with people of similar interests. They become angry that you are reducing the consumer surplus that would have gone to the ultimate buyer.

2) They realize that arbitrage on a first-come-first-served marketplace can reduce the value of the marketplace as a whole, since buyers are less likely to find bargains. They recognize your behavior as antisocial and become angry.

Re: Adventures in Aeron Chair Arbitrage

#75

Post by brc »

nomadomatic wrote: post #18

It’s unlikely Priceonomics could build a massively successful business arbitraging used goods if we have to take possession of them. Did you consider letting the buyers and sellers do the leg work? Setup a distribution center. Sellers who want to offload stuff scan the items and their details to you and you give them instant, fair quotes. If they like your offer, they bring the items to your center, and you check to…

Pawn shops make all their money on the interest on the loans. The buying and selling of goods is really the side line lower-profit leader to get people in the door. Most of the items for sale as just items that the owner failed to collect.

There is a world of difference between a straight 2nd hand goods dealer and a pawn shop. Most of that difference is in the profit margin.

Re: Adventures in Aeron Chair Arbitrage

#76

Post by brc »

zecho wrote: post #22
callmeed wrote: post #14

Did you really think arbitrage of used goods could be a business? I think the best thing these types of experiments do is expose pain points and inefficiencies that you can make businesses out of. When I was in my ramen phase of startup life (and newly married), I used to (among other things) buy clothes at local thrift stores and resell them on eBay for a decent margin. You quickly learn what brands/items sell and o…

Exactly. It's a hobby, but while scaling it up is hard to do, it is not impossible. Two stories. I wrote a program awhile back that would look for iPod Touches on my local Craigslist and would analyze the price for many different versions. If an individual iPod was available and was below mean price within a given time frame, I'd send the seller a note almost immediately. Then, if I purchased the item, I'd relist it…

I've posted this before but I've made half decent money in small batches by purchasing crates of assorted goods at live auctions. Police auctions are sometimes good for this, as they may just load a heap of stuff onto a pallet and sell the pallet as a lot. Most people don't want to buy a pallet full of junk, but you can get lucky if you scope it out before the auction and look for valuable items. Same goes for office liquidations - you might get a bulk lot of 10 LCD monitors or laser printers or something like that. You can sell the first 1 or 2 on eBay, get your capital back and the rest is pure profit. It's also easy if you buy a bulk lot because you only need to write the listing once and just keep repeating it, plus you can get a feel for what days/times bring the most bids.

It's not terribly scalable because you need to have transport and time to attend auctions, plus somewhere to store the stuff. But if you have a decent sized car/pickup, proximity to auctions and a nose for a bargain, you can pick up some good pocket money with this strategy.

Incidentally, I think the market for the pricenomics data is precisely the same as the KBB market - detailed lookup via mobile app for people who are buying/selling regularly. A good pawnbroker/2nd hand dealer/auctioneer will know the price point on a wide range of goods, but allowing people to purchase this information for a reasonable price will help both people starting out, and also professionals stepping outside their bread and butter.

I would suggest a freemium model, where the free version gives you a price range, and the pro version gives you a very direct price.

Re: Adventures in Aeron Chair Arbitrage

#77

Post by brc »

lambtron wrote: post #19

there have been stories of people who scavenge for used/old/rare books and resell them for an exhorbitant mark up ( http://www.slate.com/articles/arts/culturebox/2010/10/confes... ) some arbitrage of used goods can be a business; but it ultimately depends on the effort required and sustainable the income generated.

Someone I know runs a very profitable business that is essentially a rare book finding/agency business.

They provide a 1800 phone number + internet site. People who are looking for an out-of-print book give them the details. They search for the book. When they find it, they add 20% the price, charge the buyer, purchase the book at the list price and have it shipped to the buyer, and keep the 20% without ever touching the book.

Essentially it's an agency business - I've often wondered why people don't find the books themselves, but it's a time/doing business internationally/inexperience type of thing. They would rather pay the extra 20% and have someone else deal with it.

The true value of the business in in the dealers database which allows them to find a book very quickly by drilling down into who is most likely to have a copy, plus they have an exclusive deal with point-of-sale booksellers, whereby anyone who wanders into a bookstore looking for an out-of-print book can be given somewhere to go.

Re: Adventures in Aeron Chair Arbitrage

#78

Post by orangecat »

yonran wrote: post #73
zecho wrote: post #64

Earlier quoted context omitted.

I got a few where people were mad that I simply re-listed their item at a higher price than they sold it for. I'm sure they felt duped for undervaluing their product in the first place. As binarysolo pointed out in this thread, some sellers feel they need to urgently sell their items, so they under-price. I'd could afford to wait for someone to pay my asking price.

Instead of being angry that they didn't maximize their profits, could it be that the sellers were _offended_ that someone would maximize profits with their possessions? I can imagine a couple reasons: 1) The Toy Story 3 plot: people want to find a home for their possessions with people of similar interests. They become angry that you are reducing the consumer surplus that would have gone to the ultimate buyer. 2) The…

The reverse can be true for both of those points. Raising the price to the market-clearing level increases the probability that it gets sold to someone who places a greater value on it.

Re: Adventures in Aeron Chair Arbitrage

#79

Post by notJim »

callmeed wrote: post #67
notJim wrote: post #46

Earlier quoted context omitted.

This seems like Silicon Valley echo-chamber thinking at it's finest. If your definition of a scalable business is based on the number of VC rounds raised, or which prestigious incubator it comes from, then no, I suppose it's not a scalable business.

No my idea of a scalable business is correct: grow revenue without costs growing proportionally. Software is the perfect example: you write it once and (potentially) sell it infinity times. (Please don't nit pick my definitions unless you fundamentally disagree) Buying and selling used goods is absolutely not that. You're talking about searching, inspecting, paying (cash), storing inventory, selling, shipping, etc. A…

Well, that may be what you were thinking, but it isn't what you said.

Re: Adventures in Aeron Chair Arbitrage

#80

Post by JoachimSchipper »

orangecat wrote: post #78
yonran wrote: post #73

Earlier quoted context omitted.

Instead of being angry that they didn't maximize their profits, could it be that the sellers were _offended_ that someone would maximize profits with their possessions? I can imagine a couple reasons: 1) The Toy Story 3 plot: people want to find a home for their possessions with people of similar interests. They become angry that you are reducing the consumer surplus that would have gone to the ultimate buyer. 2) The…

The reverse can be true for both of those points. Raising the price to the market-clearing level increases the probability that it gets sold to someone who places a greater value on it.

Yes, but (value) - (price) still decreases. Higher prices are not good for the buyer, as should be obvious.
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