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…
Probably downvoted because 1) Priceonomics of course has never had any intention of actually buying and selling used items and 2) there are actually many examples of good businesses buying and selling used items (and, in fact, office furniture is one of them).
I still dont get what priceonomics provides that craigslist or ebay doesnt. Craigslist: * Listings have "ASKING" prices and can easily negotiated down 5-20%. So even if you provide a historical information of "Asking Prices", its still not a 1-1 relationship to how much you expect to sell your item for or its "BUYING" price * I do question the value of historical information on CL: Its never been available, therefore…
I'm not sure if Priceonomics' vision is a viable business but it is relatively easy to see how it can offer information that is better and more valuable/useful than the very raw data currently found on Ebay and Craigslist.
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…
>Did you really think arbitrage of used goods could be a business? Isn't that basically the business model for antique dealers and pawn shops?
That's not arbitrage, neither is buying goods in one location and selling them in a far away location. Arbitrage is a simultaneous purchase/sale in different markets with a trivial amount of work and no risk. If there is risk, it's not arbitrage; if there is work, it's not arbitrage; if there is a lot of time involved (and thus, of course, risk), it's not arbitrage. Antique dealers buy from people who want to get rid of things and sell to people who want to buy things. They make a profit because historically it is difficult to find antiques when one wants to buy them. Even if you managed to be connected to every antique seller imaginable you'd have to be lucky enough to have an item go on sale within the time you want to buy it. Antique dealers serve as a buffer, offering quick cash to sellers and selection to buyers.
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…
> 2) People who buy on craigslist are flaky and tend not to show up, 3) The time spent waiting around to meet people was obnoxious, and 4) Sometimes sellers see what you did with their item and send you angry emails. This is why you buy in the small and isolated market (craigslist) and then sell in the larger market (ebay) where you don't have to find people and waste time and money delivering the item to the person.
Interesting. But wouldn't it be better to buy on ebay and sell on craigslist? That way you don't have to drive around to pick up stuff and people come to your house to get things so you don't have to mail it out.
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…
> searching, inspecting, paying (cash), storing inventory, selling, shipping, etc. So Amazon was never a scalable business? Or netflix? You don't have to be sitting around a kitchen table selling nothing but bits for it to be scalable business.
I have no idea whether you have a point that you're getting at.
Amazon wasn't profitable for a long time and only scalable because of massive investments. They don't buy used goods and resell them. Same for netflix.
His main argument is that the acquisition of items for resale is not scalable, because you are dependent on people to supply used goods. You cannot make the market provide more used goods to meet demands. Amazon and netflix can perfectly well do that.
> 2) People who buy on craigslist are flaky and tend not to show up, 3) The time spent waiting around to meet people was obnoxious, and 4) Sometimes sellers see what you did with their item and send you angry emails. This is why you buy in the small and isolated market (craigslist) and then sell in the larger market (ebay) where you don't have to find people and waste time and money delivering the item to the person.
Interesting. But wouldn't it be better to buy on ebay and sell on craigslist? That way you don't have to drive around to pick up stuff and people come to your house to get things so you don't have to mail it out.
In places like ebay the sellers are a tad more experienced and they have more exposure to the "market price" so it's harder to get a better deal. You could still get a small deal and try to sell for an inflated price on craigslist, but I'm of the opinion that it's just easier to find buyers who will buy at the market price on ebay rather than buyers who will buy for an expensive price on craigslist. Even more so with specialty / collector style items.
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…
A friend of mine runs a larger-scale version of the used book business your wife used to run. She started out buying books from estates and old people looking to downsize. She'd take anything, paying a flat rate of something like 10 cents a book, and would show up at your house and haul away all the books. Then she'd list all the books on Amazon. Even if the book was selling for one cent she would make money on the shipping, since shipping costs slightly less than Amazon's shipping allowance (unless the book weighed over a certain amount and thus she'd lose money on shipping, in which case she'd recycle it, as she did with books in unsaleable condition). After a while she built bookshelves in her garage which let her store I believe tens of thousands of books, and hired people to do the book listing and shipping for her. She also moved on to more large-scale ways of acquiring books, like arranging with churches and schools to pick up the books that people left in their donation boxes. Every so often there'd be a volume that sold for $100, but the great bulk of the predictable cash flow came from making less than $1 for a large number of books sold each day.