Reselling: The Big Trade-Off

When reselling an item, you have to choose between getting your money immediately and waiting for a larger sum.  The rules I will discuss in the following paragraphs hold true for both Craigslist and Amazon, the two websites with which I resell most of my investments.

When I purchase an item with the intention of reselling it; the first thing I do when I get home is determine my anticipated profits.  I will discuss this process in the future, but a shortcut for when I'm feeling lazy is to simply find Amazon's used low price for the item, double that, and list it on Craigslist for the double price.  If I'm listing it on Amazon, I will take into account the price distributions as well. Today, I only need discuss Craigslist to demonstrate the trade-off.

Take, for example, my TI-84 graphing calculator.  I bought it on the 30th of July and resold it the 7th of October.  Why did it take over two months to sell it?  Two months is a rather long turnaround.  I was holding out for the best price.

When I bought the calculator that day, the low price on Amazon was $50.  This was less than I hoped to make: I wanted a $70 profit minimum.  Seeing how how there were at least twenty calculators price between $50 and $60, I knew it would take forever to sell it at the $85 needed to make a $70 profit after shipping and Amazon's fees so I listed it on Craigslist.

I initially listed it $100, expecting people to offer $60 from which I would settle at $75.  No one was interested at $100 so I reduced the price to $90.  At $90 people were emailing me with offers.  The typical offer was $60 but I had some as low as $45.  

I knew that if I waited I would find someone willing to pay $75 for the calculator.  This is the trade-off of my title: you either sell it quickly for a lesser sum or you wait for a better offer.  

I did end up selling the calculator for $75, earning more than my goal of a $70 profit although I did have to wait two months.  I probably could have sold within two weeks of purchasing it for $60, so by waiting I earned an additional twenty-five percent.