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How to Make It on Craigslist

blog.priceonomics.com

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Re: How to Make It on Craigslist

#111

Post by jcampbell1 »

dangrossman wrote: post #103
dotBen wrote: post #100

Earlier quoted context omitted.

Not speaking for this individual in particular but in general its unlikely that businesses like this are going to report all of their earnings, are they? You can audit a cash business but with no receipts whole transactions never happened or have a paper trail. I'm not condoning tax avoidance but remember most of the people on HN either earn six figures a year, will do in a few years and/or building startups that mig…

At the same time, in that income range with that family, his taxes are gonna be 0-10% of his profits at most... without the threat of being imprisoned for tax evasion. If his "typical summer week" is his typical week all year, he alone is already earning more than the median household income for this country... lots of people are self-employed making similar income without benefits. Is it morally OK for a plumber to…

Payroll taxes are 15.3% with no deductions. 0-10% on federal sounds about right, but that is not really an accurate picture for what taxes would do to his cashflow.

I agree that it is not morally OK to not report income.

Re: How to Make It on Craigslist

#112

Post by int3rnaut »

mapster wrote: post #109
int3rnaut wrote: post #104

I really like your story man, and I'm glad you're succeeding but I just wanted to voice my opinion on one of the things you said-- "Back at home I immediately found out the cards were worthless. I had paid the kid $100 for the cards, and eventually pestered him". Even if the kid knew, I think it's wrong for an adult to come back and reneg on a deal with a child. There's a big power imbalance there. You seem like a gr…

If a kid acts unethically, its your duty as an adult to correct a wrong, and if needed, discuss the kid's actions with his parents.

You know what, I agree but there's a right and wrong way to approach the problem, especially with kids. I mean that's why parents should be involved in the first place in situations like this.

Re: How to Make It on Craigslist

#113

Post by jleader »

r00fus wrote: post #62
redthrowaway wrote: post #51

Earlier quoted context omitted.

I wonder if it would be possible to scale the business. If you wrote a script that could flag potentially lucrative items for manual review, you would likely be able to cut out much of the searching, allowing you to target CLs in multiple cities. If he's making $38/hr in one city, he could hire someone for $18/hr in another to drive around and pick up / drop off items and pocket the $20 difference. I'd be interested…

As he mentions several times in his posting, time sensitivity is critical. Minutes, even seconds can make/break a deal... automation may be much slower than a human who's constantly scanning. Furthermore, it's clear that it's not just "pickup" and possibly "delivery"... the author is making a clear buy/sell/bargain decision on the spot... what happens when the pickup results in a fraudulent item? Clearly this means t…

With sufficiently good automation, he could be running the automated search while he's out driving around on pickups/deliveries. The search could send alerts to his phone (SMS, email, dedicated app?).

Eventually, you scale to having multiple drivers in multiple cities who spend their work time on the road, with the "back office" alerting them to new potentially valuable postings. Maybe even tracking their general location, and alerting them to lower-value postings that happen to be near their current location?

Given the entrepreneurial nature of the buy/sell/bargain decisions that need to be made on the spot, maybe it should be structured something like a franchise? You sign drivers up, they get a territory, and get sent alerts for their their territory. Several people mentioned paying the drivers hourly wages; instead, you could charge them (per month or per alert?) for the alert service, or you could do some sort of percentage profit sharing (though you'd have to trust the drivers to accurately report all transactions).

Re: How to Make It on Craigslist

#114

Post by [deleted] »

int3rnaut wrote: post #112
mapster wrote: post #109

Earlier quoted context omitted.

If a kid acts unethically, its your duty as an adult to correct a wrong, and if needed, discuss the kid's actions with his parents.

You know what, I agree but there's a right and wrong way to approach the problem, especially with kids. I mean that's why parents should be involved in the first place in situations like this.

[deleted]

Re: How to Make It on Craigslist

#115

Post by tsmith »

int3rnaut wrote: post #104

I really like your story man, and I'm glad you're succeeding but I just wanted to voice my opinion on one of the things you said-- "Back at home I immediately found out the cards were worthless. I had paid the kid $100 for the cards, and eventually pestered him". Even if the kid knew, I think it's wrong for an adult to come back and reneg on a deal with a child. There's a big power imbalance there. You seem like a gr…

The kid was old enough to engage in meaningful financial transactions. There's always _some_ power imbalance in any kind of meaningful transaction - that doesn't mean that the person on the weaker side has the prerogative to act unfairly.

Re: How to Make It on Craigslist

#116

Post by roseburg »

mahannay wrote: post #17

It's very impressive that he's able to earn so much money and support his family via Craigslist, but I can't help but think about how useful (or not useful, really) his job is for the overall economy. Basically, he's another middleman - buying goods for a low price and selling them higher. Without him in the picture, buyers could have purchased their items for less and saved money. I just don't see how this job adds…

People appreciate me being prepared to remove their appliances without damaging their house, showing up on time, paying cash, and often times I will buy all their appliances (and other items they might be selling). Sellers appreciate me cleaning out the appliance, changing out 220v power cords for them, delivery and setup of the appliance as well as the price, which I usually set at just under the going rate. Many times people will come to me asking for me to find a used appliance for them and want me to deliver it. Buying on craigslist can often times be like buying a used car. You never know who your dealing with. One of the skills I've picked up is how to read between the lines on craigslist ads. If you don't know what your doing, it can be quite a frustrating experience.

Re: How to Make It on Craigslist

#117

Post by jleader »

jccc wrote: post #102
reader5000 wrote: post #92

Earlier quoted context omitted.

There is nothing to "spell out" for the sellers since nobody knows at what max price an item will sell. When the original seller sets a price, they are balancing their need to move the item with how much they think they can get. When the arbitrageur buys an item they are offering immediate liquidity and accept not only the item but the risk that they will not be able to move it at a profit (or break even). Liquidity…

Does it matter at all that buyers and sellers ought to have that choice, to determine whether this really is a value to them? If liquidity and risk transfer is such a value, wouldn't you want this service-for-sale to be clearly visible to all? This is my theory: If a person doing this were clearly distinguishable on Craigslist from regular individual sellers (and buyers) a great number would be swayed away from doing…

Note that eBay provides this sort of distinction, in the form of feedback history (someone who's got feedback from 100s or 1000s of transactions is probably making money at it), and people generally prefer to deal with the dealers and middle-men (in part because dealers have more to lose if they rip someone off and get bad feedback).

[edited to clarify wording slighty]

Re: How to Make It on Craigslist

#118

Post by roseburg »

colton36 wrote: post #106
int3rnaut wrote: post #104

I really like your story man, and I'm glad you're succeeding but I just wanted to voice my opinion on one of the things you said-- "Back at home I immediately found out the cards were worthless. I had paid the kid $100 for the cards, and eventually pestered him". Even if the kid knew, I think it's wrong for an adult to come back and reneg on a deal with a child. There's a big power imbalance there. You seem like a gr…

I disagree. Letting the kid get away with this teaches that there won't be any consequences to questionable actions.

Exactly. The kid was a junior in high school. I'm 30 years old. It wasn't like I was picking on some little kid. The sooner someone gets called out for stuff like this the better.

Re: How to Make It on Craigslist

#119

Post by mikeash »

jccc wrote: post #33
tocomment wrote: post #19

Earlier quoted context omitted.

Well, he is delivering them, and taking old appliances away when he delivers them. There is a lot of value in that. He is also adding "liquidity" to the "market" by immediately buying new listings, and holding them for a few days until the right buyer comes along. Without someone like him the seller would have to wait several days to find the right buyer.

I doubt very much that sellers would appreciate this liquidity "service" if it were spelled out for them. They would feel cheated, as would the buyers.

People rarely feel ripped off buying goods from retail stores, even though everybody knows that retail stores just buy goods for less money than what they charge and make their profit based on that difference.

Re: How to Make It on Craigslist

#120

Post by dangrossman »

jcampbell1 wrote: post #111
dangrossman wrote: post #103

Earlier quoted context omitted.

At the same time, in that income range with that family, his taxes are gonna be 0-10% of his profits at most... without the threat of being imprisoned for tax evasion. If his "typical summer week" is his typical week all year, he alone is already earning more than the median household income for this country... lots of people are self-employed making similar income without benefits. Is it morally OK for a plumber to…

Payroll taxes are 15.3% with no deductions. 0-10% on federal sounds about right, but that is not really an accurate picture for what taxes would do to his cashflow. I agree that it is not morally OK to not report income.

Here's TurboTax's tax forecaster, which will do all the work, including the self-employment (payroll) tax: http://turbotax.intuit.com/tax-tools/calculators/taxcaster/

I put in my own numbers for a complicated personal return (business income, capital gains, itemized deductions, etc) and the forecaster agreed with my actual taxes done by a CPA, so it's not making any guesses.

Put in married, $45k in business income, 4 kids. The total federal tax bill comes out to $3700 or 8%. Most of the tax bill was offset by the large EIC for having kids. In reality he'd have many deductions to lower that even further, from business use of a home, to any health insurance he buys, to part of his car expenses and mileage...

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