Sales today were odd. There were relatively few sales but a high percentage of these sales were good. I only purchased items from two sales for a total of $6.25.
One of the first sales we went to had a GameCube and a stack of approximately ten GameCube games. The console was $10 and the games were priced at $5 each. Of the ten games, I chose four: Metroid Prime, Metroid Prime 2, The Legend of Zelda: The Wind Waker, and The Legend of Zelda: Ocarina of Time Master Quest.
I ignored the marked prices and asked the seller how much the games were. She told me "$5 each, so $20 total" to which I responded "$5 each?" She then immediately offered $15 instead. That was still more than I was willing to spend so I made a show of checking the boxes for documentation and the disks for scratches. I then countered with $4 because the disks were scratched and some of the booklets were missing. She offered $8 to which I offered $6. She then I offered $7 but I said I could really only do $6. She commented on my bargaining skills and accepted.
I know that giving you a play-by-play of my bargaining is rather dry but I feel it's important because it gives you an idea of real bargaining situations. I've described many of the bargaining techniques that I know and I've given situations in which they're useful. However, very rarely do you use only one of these techniques; I usually end up using a combination of several techniques to get a deal. In my technique introductions I only give you idealized situations in which only one technique need be applied.
I'm quite happy spending $6 on these four titles. Wind Waker and Ocarina of Time Master Quest both start at $35 used on Amazon and they're both supposed to be excellent games. In fact, I have been looking for OOT from garage sales for years now; I've actually passed it up at swap meets just so I could have something to look for at garage sales. These two games alone make it worth it.
The other $0.25 was spent on two books: Frank Norris' The Octopus and William S. Burroughs' The Ticket that Exploded. I had never actually heard of the latter but I had bought books from that seller in the past so I assumed it would be good.
On Wednesday I sold the Kindle I bought on the twenty-fourth. I only got $40 (about half its Craigslist value) but I sold it to a friend who I know will put it to good use. And, to make it even better, I still made $20 out of the deal.
Saturday, March 31, 2012
Friday, March 30, 2012
Uncommon or Unique Items, Part 3
Just what constitutes a fair price for unique items? It really boils down to gut instinct and willingness to pay.
If you've read this blog for a while, you've probably noticed that different people's idea of a good deal varies wildly. I'm notoriously cheap; I always laugh about the "great finds" that people post to Reddit, such as the recent $5 moon landing headline newspaper that was clearly a reproduction post. Perhaps that wasn't the best example; authentic moon landing papers, despite me never having seen them, are supposedly quite common (a quick eBay search confirms this). My point is that the buyer thought it was a unique item and that $5 was a great deal; he or she was willing to pay $5.
My willingness to pay is determined by a few factors, most importantly condition. If an item is heavily scratched or otherwise damaged I won't pay more than a few dollars. If it's simply dirty I may be willing to pay a little more (dirt can be cleaned, after all) but cleanliness is a good bargaining point. Mention the "bad condition" (the dirt) to try to knock the seller down by a few dollars. However, dirt that may harm the item's functionality (such as dirty electronics) will decrease my willingness to pay.
Another factor affecting my willingness to pay is whether I have a use for the item. I buy some items on a whim because I think they look good or may prove useful in the future. If I don't have a specific use in mind for an item I won't spend much on it because it will likely end up being sold at my own garage sale in a year anyway. On the other hand, if the item is something I've been looking to purchase because I actually need it I may spend a few dollars more than I normally would.
Finally, gut instinct takes an important part in all my garage sale purchasing decisions. Over my years of garage saling, I've obtained a pretty good sense of what is a good deal and what isn't, not to say I don't make mistakes. I can now judge fairly well whether an item is of any value or use to me, and, perhaps more importantly, if the item will continue to be of use to me in the future.
If you've read this blog for a while, you've probably noticed that different people's idea of a good deal varies wildly. I'm notoriously cheap; I always laugh about the "great finds" that people post to Reddit, such as the recent $5 moon landing headline newspaper that was clearly a reproduction post. Perhaps that wasn't the best example; authentic moon landing papers, despite me never having seen them, are supposedly quite common (a quick eBay search confirms this). My point is that the buyer thought it was a unique item and that $5 was a great deal; he or she was willing to pay $5.
My willingness to pay is determined by a few factors, most importantly condition. If an item is heavily scratched or otherwise damaged I won't pay more than a few dollars. If it's simply dirty I may be willing to pay a little more (dirt can be cleaned, after all) but cleanliness is a good bargaining point. Mention the "bad condition" (the dirt) to try to knock the seller down by a few dollars. However, dirt that may harm the item's functionality (such as dirty electronics) will decrease my willingness to pay.
Another factor affecting my willingness to pay is whether I have a use for the item. I buy some items on a whim because I think they look good or may prove useful in the future. If I don't have a specific use in mind for an item I won't spend much on it because it will likely end up being sold at my own garage sale in a year anyway. On the other hand, if the item is something I've been looking to purchase because I actually need it I may spend a few dollars more than I normally would.
Finally, gut instinct takes an important part in all my garage sale purchasing decisions. Over my years of garage saling, I've obtained a pretty good sense of what is a good deal and what isn't, not to say I don't make mistakes. I can now judge fairly well whether an item is of any value or use to me, and, perhaps more importantly, if the item will continue to be of use to me in the future.
Tuesday, March 27, 2012
Uncommon or Unique Items, Part 2
As I mentioned in my introduction on the 23rd, good bargaining skills are required for those rare garage sale items. It's a careful balancing act of ensuring you purchase an item you will probably never see at a sale again and still getting a good deal.
The most important factor in these situations is sizing up your seller. As I've mentioned before, profiling your seller and simply waiting to see how receptive the seller is to other buyers' bargaining attempts are both simple. However, note that some sellers aren't as receptive to some buyers' bargaining as they are to others'. I watched one seller go from $5 to $0.10 on a piece of jewelry for someone else and then refuse to go from $0.50 to $0.25 on a book for me.
Offending your seller is the worst thing you can do in this situation. If he or she doesn't want to sell it to you, you will possibly literally never get the item. Do everything you can to get and stay on the seller's good side. Bargain well but don't be rude. For whatever reason, people seem to take what I would consider offensively low offers much better if you smile when making the offer. If you desperately want the item, I suggest simply asking the seller for his or her starting price. I do occasionally insult sellers with lowball initial offers and, once or twice, I managed to get the seller to not sell me the item for any price. Even if he or she chooses to acknowledge you after being insulted, the seller may be unwilling to offer you as good a deal as you would have gotten otherwise.
Another way to profile a seller is to inquire about prices for items in which you have no interest. Say, for example, there's an LCD computer monitor (not especially uncommon but it's a good example for this technique) you're interested in but for which you're unwilling to spend more than $5. The seller, unfortunately, is of a demographic known to expect exorbitant prices for anything tech-related. (By this I mean old people; please don't be offended, readers. You have no idea how many older couples I've seen listing their late '80s or early '90s CRT monitors for $20 or even $40. Goodwill won't even take those now.) If you suspect a high price and a sensitive seller, inquire about other items you fear may be expensive and base your decision to make an offer based on the seller's response.
So ends Part 2, my discussion of various bargaining techniques for unique items. Part 3 will discuss deciding what's a fair price for these items.
The most important factor in these situations is sizing up your seller. As I've mentioned before, profiling your seller and simply waiting to see how receptive the seller is to other buyers' bargaining attempts are both simple. However, note that some sellers aren't as receptive to some buyers' bargaining as they are to others'. I watched one seller go from $5 to $0.10 on a piece of jewelry for someone else and then refuse to go from $0.50 to $0.25 on a book for me.
Offending your seller is the worst thing you can do in this situation. If he or she doesn't want to sell it to you, you will possibly literally never get the item. Do everything you can to get and stay on the seller's good side. Bargain well but don't be rude. For whatever reason, people seem to take what I would consider offensively low offers much better if you smile when making the offer. If you desperately want the item, I suggest simply asking the seller for his or her starting price. I do occasionally insult sellers with lowball initial offers and, once or twice, I managed to get the seller to not sell me the item for any price. Even if he or she chooses to acknowledge you after being insulted, the seller may be unwilling to offer you as good a deal as you would have gotten otherwise.
Another way to profile a seller is to inquire about prices for items in which you have no interest. Say, for example, there's an LCD computer monitor (not especially uncommon but it's a good example for this technique) you're interested in but for which you're unwilling to spend more than $5. The seller, unfortunately, is of a demographic known to expect exorbitant prices for anything tech-related. (By this I mean old people; please don't be offended, readers. You have no idea how many older couples I've seen listing their late '80s or early '90s CRT monitors for $20 or even $40. Goodwill won't even take those now.) If you suspect a high price and a sensitive seller, inquire about other items you fear may be expensive and base your decision to make an offer based on the seller's response.
So ends Part 2, my discussion of various bargaining techniques for unique items. Part 3 will discuss deciding what's a fair price for these items.
Sunday, March 25, 2012
3/24/12 Purchase Summary Addendum
When I was going to bed last night I realized I didn't discuss the circumstances of buying the Kindle. Yes, I mentioned that he immediately accepted my lowball (which means I payed too much), but I didn't discuss the conditions in which I found the item.
The Kindle was not somewhere that it could be easily found. It was sitting on a desk the seller was selling that was sitting away from and behind the bulk of his items. Obviously, if a small, high-value item is sitting away from the bulk of your items the chances of someone who is willing to pay a fair price for it seeing it are much smaller. Furthermore, the Kindle was in a generic, unmarked case that I initially assumed was a calendar.
The Kindle was not somewhere that it could be easily found. It was sitting on a desk the seller was selling that was sitting away from and behind the bulk of his items. Obviously, if a small, high-value item is sitting away from the bulk of your items the chances of someone who is willing to pay a fair price for it seeing it are much smaller. Furthermore, the Kindle was in a generic, unmarked case that I initially assumed was a calendar.
The case looks like this but it zips up fully
Whenever I see an unmarked protective case, I always check it. Usually it holds business cards, a calendar, CD's, or it's empty. Yesterday it paid off.
Saturday, March 24, 2012
3/24/12 Purchase Summary
Today I set to new (bad) personal records: the most I've spent on any individual garage sale item and the most I've spent in a day garage saling.
I spent $21.10 total: $1 on a book I have listed on Amazon, $0.10 for another book listed on Amazon, and $20 for a wifi-only Kindle 3 (also known as the Kindle Keyboard).
The Kindle was a little unfortunate. I found it and didn't intend to purchase it; I decided to ask the seller for the price just for my own curiosity. He told me $50 so I countered with $20 just to see his counter but he immediately accepted $20. Given how rapidly he accepted my offer; I'm sure he would have taken $10. I have it listed on Craigslist for $80 and I'll see how much I can get for it. I estimate someone actually paying me $50-$60 for it. If nothing else I can list it on Amazon; they start at $88 which means I'll get around $65 after fees and shipping.
I spent $21.10 total: $1 on a book I have listed on Amazon, $0.10 for another book listed on Amazon, and $20 for a wifi-only Kindle 3 (also known as the Kindle Keyboard).
The Kindle was a little unfortunate. I found it and didn't intend to purchase it; I decided to ask the seller for the price just for my own curiosity. He told me $50 so I countered with $20 just to see his counter but he immediately accepted $20. Given how rapidly he accepted my offer; I'm sure he would have taken $10. I have it listed on Craigslist for $80 and I'll see how much I can get for it. I estimate someone actually paying me $50-$60 for it. If nothing else I can list it on Amazon; they start at $88 which means I'll get around $65 after fees and shipping.
Friday, March 23, 2012
New Record!
Today I beat my return on investment record. My previous record was for a TI-83 Plus Silver Edition graphing calculator which I bought and sold before I had this blog. I paid $3 for it and sold it for $75.
Today I sold both Laser Tag sets I purchased relatively recently: the $3 set I purchased back in December and the $1.25 set I purchased back in January. The buyer paid $20 for the small set (this was agreed upon before he arrived) and $110 for the large set (this was not agreed upon before he arrived; I brought it in case he was interested). The small set isn't that impressive; I made an $18.75 profit on a $1.25 purchase. The profit from the large set is almost 150% my previous record of $72. With this sale, I also made December 10th, 2011 my most profitable garage saling day on record.
This sale adds $18.75 to my 2012 profit and $107 to my 2011 profit and completely shatters my previously estimated income for the large set.
Hopefully tomorrow's sales will provide me with some good purchases.
Today I sold both Laser Tag sets I purchased relatively recently: the $3 set I purchased back in December and the $1.25 set I purchased back in January. The buyer paid $20 for the small set (this was agreed upon before he arrived) and $110 for the large set (this was not agreed upon before he arrived; I brought it in case he was interested). The small set isn't that impressive; I made an $18.75 profit on a $1.25 purchase. The profit from the large set is almost 150% my previous record of $72. With this sale, I also made December 10th, 2011 my most profitable garage saling day on record.
This sale adds $18.75 to my 2012 profit and $107 to my 2011 profit and completely shatters my previously estimated income for the large set.
Hopefully tomorrow's sales will provide me with some good purchases.
Uncommon or Unique Items, Part 1
Sometimes you do come across items that are unique or rare to find at garage sales. Negotiating these items is more difficult because you may never see an identical -- or even similar -- item again.
Before I continue, I should clarify what I mean by "unique." In this context, I mean items that haven't been mass-produced in the last few decades and you can't easily find on eBay. If an item is uncommon enough to be considered unique, you will probably never see it at a garage sale again. This is a good example of a unique item:
Note that my idea of unique changes as I go to more sales. For example, last September I saw a second production run copy of Scrabble (the first run was done by hand under the name of Criss-Crosswords and was limited to a few hundred copies, I believe). Having never seen one before, I assumed it was rare but I knew there was no market so I didn't buy it. Since then, I've seen an identical copy every weekend I've gone saling.
I suggest you don't buy unique items with intent to resell them. For one thing, you have no idea if the items are sought by collectors. Even if collectors want them, you have no idea if the items are worth anything. Just because people on eBay collect them; it doesn't mean they are worth anything. Many collectible items on eBay sell for $10 or less. Even if the item is "worth" something, you have no idea how easy it is to find a buyer. If the market consists of all of twenty people in the United States, it's pretty hard to track down one of these twenty people and negotiate a deal. Remember, an item is worthless no matter its supposed value if you cannot find a buyer.
Well, I meant to start discussing bargaining for uncommon items in this post, but it's actually pretty long already. I guess I will start with that next week.
Before I continue, I should clarify what I mean by "unique." In this context, I mean items that haven't been mass-produced in the last few decades and you can't easily find on eBay. If an item is uncommon enough to be considered unique, you will probably never see it at a garage sale again. This is a good example of a unique item:
Yes, that is Gandhi. Yes, I did get him at a garage sale. I love the stripes.
Note that my idea of unique changes as I go to more sales. For example, last September I saw a second production run copy of Scrabble (the first run was done by hand under the name of Criss-Crosswords and was limited to a few hundred copies, I believe). Having never seen one before, I assumed it was rare but I knew there was no market so I didn't buy it. Since then, I've seen an identical copy every weekend I've gone saling.
I suggest you don't buy unique items with intent to resell them. For one thing, you have no idea if the items are sought by collectors. Even if collectors want them, you have no idea if the items are worth anything. Just because people on eBay collect them; it doesn't mean they are worth anything. Many collectible items on eBay sell for $10 or less. Even if the item is "worth" something, you have no idea how easy it is to find a buyer. If the market consists of all of twenty people in the United States, it's pretty hard to track down one of these twenty people and negotiate a deal. Remember, an item is worthless no matter its supposed value if you cannot find a buyer.
Well, I meant to start discussing bargaining for uncommon items in this post, but it's actually pretty long already. I guess I will start with that next week.
Tuesday, March 20, 2012
The Amazon Marketplace Fee Structure
As I have mentioned in the past, I do most of my non-Craigslist reselling through Amazon Marketplace. I've recently become disenchanted with it due to some poor transactions: the returned graphing calculator and a more recent incident in which the buyer was apparently unable to properly insert the batteries leading to a return because the item "wasn't working." Despite its flaws, the Amazon Marketplace is a good place for reselling items because you can delist an item any time, you can change an item's price any time, and you generally get more money than eBay (but partly because the shipping credit is so low and fees are higher).
Fees are broken down into three parts:
I, of course, am just summarizing the various fee tables listed on an Amazon help page. For more information they can be found here.
Fees are broken down into three parts:
- A referral fee
- A variable closing fee
- A fixed closing fee
The referral fee is equal to six to twenty-five percent of the item's closing cost, less the shipping credit. For most items, including books, music, software, DVD's, and video games -- the items most relevant to this blog -- the referral fee is 15%.
The variable closing fee is flat for six categories: books, music, software, DVD's, video games, and video game consoles. The fee for music and DVD's is $0.80; the fee for the other four categories is $1.35. The fees for these six categories are the same for standard and expedited shipping. For everything else, the variable closing fee is $0.45 plus $0.05 per pound of item weight for standard shipping and $0.65 plus $0.10 per pound of item weight for expedited shipping.
The fixed closing fee -- also referred to as the per-item fee -- is $0.99. This is waived for Pro Merchant Subscribers but the fee for this service is $39.99 per month. To make waiving the fee worth it you have to be a volume seller.
I, of course, am just summarizing the various fee tables listed on an Amazon help page. For more information they can be found here.
Friday, March 16, 2012
My $2.65 Challenge
In the mail today I received a settlement check from a class action against a former employer. I wasn't expecting much -- maybe $5 -- but the number on the check surprised even me: $2.65.
I contemplated the purchases I could make: a cheeseburger from In-N-Out with nothing else, two items from the dollar store, or a bunch of things from garage sales.
My mom had a better suggestion: rather than just spending the money on any items that interest me, I should invest my $2.65 wisely to try to maximize my returns. This is what I'll be doing: when I go out saling, I will have a special $2.65 set aside. When I see an especially good investment, I will spend some or all of the money and resell the purchase for (hopefully) an absurd profit. I'll keep you updated, dear reader.
Special Bargaining Situation: Electronics
Getting a good deal on electronics can be tricky because sellers invariably value them too high. You have no idea how frequently I see VCR's for $20+; it's like the seller thinks "Oh, it has a circuit board! It must be expensive."
Sadly, you frequently have to employ aggressive bargaining when purchasing electronics. Contrary to popular belief, that NES you've had in your garage for the last two decades is not worth $13000; it's not even worth $10.
Rather than have a massive wall of text, I'm just going to provide you with a list of techniques proven to work with electronics since you've seen most (if not all) of these techniques before.
Sadly, you frequently have to employ aggressive bargaining when purchasing electronics. Contrary to popular belief, that NES you've had in your garage for the last two decades is not worth $13000; it's not even worth $10.
Rather than have a massive wall of text, I'm just going to provide you with a list of techniques proven to work with electronics since you've seen most (if not all) of these techniques before.
- Ask if the item works. If the seller claims it does, ask to test it out or ask when it was last used. Be sure to not just check if the item powers on; check other functionality (open and close the DVD tray, check if it sends video to a tv) as well.
- Ask the seller if he or she knows he or she is selling. I've found that many parents end up selling their kid's stuff without knowing what it is, which explains people asking $40 for a bare Sega Genesis. I used this technique to buy a Sega CDX (a failed console that plays Sega Genesis and Sega CD games) priced at $20 for $0.50. At the time I did not realize it sells for $125+ on eBay.
- Ask the seller if he or she has all the accessories. That calculator is worthless and pretty much impossible to use without the manual, after all. I'm being sarcastic, of course.
- Scratches or dents? A perfect bargaining point.
As far as pricing goes, I suggest you be cheap, even by my standards. Electronics never work as well as the seller claims and for this reason I suggest you do not buy electronics as investments. For example, I bought a Nintendo 64 console in the past -- assured it worked perfectly -- as an investment only to take it home to find that the console barely worked, the video cable was shot, and the games worked just OK. It was too poor to sell on Craigslist so I ended up selling it as-is at my own garage sale, keeping the games for myself. I still made a profit but it was close to nothing. It's important you understand you're taking a risk when buying electronics.
That warning aside, you can sometimes find good deals on electronics at garage sales. I did, after all, buy a new Kindle for $13. I did, however, buy a Sony ereader as well and despite the seller's assurances that it works flawlessly, it frequently locks up and needs a hard reset.
I guess the point of this post is to really make it clear that you need to be sure you're not overspending on electronics because you will frequently get burned. I would never spend more than $2 or $3 on an item from this category unless I was sure it worked or that I could resell a part of it (ie, a game) for a profit.
Sunday, March 11, 2012
As Promised, More What to Pay: Common Items
As I said would most likely happen, I have since thought of some more items commonly found at garage sales. Here they are, with reasonable price expectations.
CD's: $1/CD is a fair price. Be sure to make sure the CD is actually in the case. You have no idea how common it is to find empty CD cases. This applies to DVD's as well.
Video Games: This is a rather broad category. I wouldn't pay more than $0.25 per game for NES generation games unless it's for one of the best games, such as Mario or Sonic. As for the SNES generation, $0.25 to $1 is fair depending on the game. For N64 generation, $1/game is fair. For GameCube/PS2/Xbox, $1-$3/game is fair, again depending on the game. You don't really see anything for the current generation of consoles (nor do I know anything about them) so I can't really give you a price for these.
Electronics: I admit, this is a rather broad category. Get electronics for as low as you possibly can. In my experience, they never work as well as the seller claims. Certainly never pay more than $10 for something; I would probably never pay more than $5. I think my next post shall be a discussion of bargaining for electronics.
CD's: $1/CD is a fair price. Be sure to make sure the CD is actually in the case. You have no idea how common it is to find empty CD cases. This applies to DVD's as well.
Video Games: This is a rather broad category. I wouldn't pay more than $0.25 per game for NES generation games unless it's for one of the best games, such as Mario or Sonic. As for the SNES generation, $0.25 to $1 is fair depending on the game. For N64 generation, $1/game is fair. For GameCube/PS2/Xbox, $1-$3/game is fair, again depending on the game. You don't really see anything for the current generation of consoles (nor do I know anything about them) so I can't really give you a price for these.
Electronics: I admit, this is a rather broad category. Get electronics for as low as you possibly can. In my experience, they never work as well as the seller claims. Certainly never pay more than $10 for something; I would probably never pay more than $5. I think my next post shall be a discussion of bargaining for electronics.
Saturday, March 10, 2012
3/10/12 Purchase Summary
I didn't actually go garage saling today. I walked through my neighborhood this morning and stopped at two sales; luckily I had the foresight to bring my bag of change. I spent $0.50 on Jak and Daxter for the Playstation 2. Included were the original case and documentation; the disk itself has no scratches.
Thursday, March 8, 2012
You Can Always Try Coming Back
Sometimes there's an item you're interested in but the seller, despite you using all the bargaining techniques we've discussed, is unwilling to let it go at a decent price. In these situations, you can just let it go. If cost-benefit analysis says the item isn't worth the seller's price, forget about it. You can always come back later in the day.
I purchased my newest set of Nerf guns on February 11th using this technique. The kid wanted $14 for the two, more than I was willing to pay. I came back at 11:30 on my way home, when the family was putting their stuff away. They realized they needed to get rid of the item more than they wanted the money so I got the guns for $6.
I like this technique because it gives the sellers time to reconsider the dilemma I mentioned above: which is more valuable: the money or getting rid of the stuff. In regards to the Nerf guns, I knew from having my own garage sales that buyers are unwilling to pay more than $1 or $2 per gun so I was pretty sure they would still have the guns late in the day.
Waiting until later in the day is not necessary; the buyer only needs the time to reconsider I mentioned above. One of my friends purchased a music device (I think it may have been a multitrack recording device but I may be wrong; I don't know these things) for half the seller's price by leaving, turning around two minutes later, and making the same offer they had refused earlier.
Really, you don't even have to get in the car. The seller of the LED lamp I purchased January 28th initially refused my offer of $0.25 so I walked over the neighbor's sale (it was a multifamily sale). On the way back to the car, I offered a quarter again and she accepted. All the seller needs is a little time to realize that they'd rather have the guarantee of the money and the item being gone rather than risk the item not selling.
When you think about it, this technique is really just an extended variation of the Put Down/Walk Away.
I purchased my newest set of Nerf guns on February 11th using this technique. The kid wanted $14 for the two, more than I was willing to pay. I came back at 11:30 on my way home, when the family was putting their stuff away. They realized they needed to get rid of the item more than they wanted the money so I got the guns for $6.
I like this technique because it gives the sellers time to reconsider the dilemma I mentioned above: which is more valuable: the money or getting rid of the stuff. In regards to the Nerf guns, I knew from having my own garage sales that buyers are unwilling to pay more than $1 or $2 per gun so I was pretty sure they would still have the guns late in the day.
Waiting until later in the day is not necessary; the buyer only needs the time to reconsider I mentioned above. One of my friends purchased a music device (I think it may have been a multitrack recording device but I may be wrong; I don't know these things) for half the seller's price by leaving, turning around two minutes later, and making the same offer they had refused earlier.
Really, you don't even have to get in the car. The seller of the LED lamp I purchased January 28th initially refused my offer of $0.25 so I walked over the neighbor's sale (it was a multifamily sale). On the way back to the car, I offered a quarter again and she accepted. All the seller needs is a little time to realize that they'd rather have the guarantee of the money and the item being gone rather than risk the item not selling.
When you think about it, this technique is really just an extended variation of the Put Down/Walk Away.
Tuesday, March 6, 2012
My Amazon Experiment, Part 2
This is a continuation of Thursday's post.
With those observations, I had an understanding of how Amazon's prices change in relation to new sellers. I thought that I could artificially create new clusters simply by setting my price equal to that of the fourth- or fifth-cheapest item for sale. Any items whose sellers didn't match my price would be quickly purchased, leaving only two or three items matching my price, allowing me to raise the market price and repeat the process.
My method worked. I was able to raise the low price for Sonic Adventure 2 from $25 to $35 (a forty percent increase) in a one week period, despite only two copies of the game selling.
A few market conditions which aren't immediately obvious prevent this from being a viable technique. First, and most importantly, are the volume sellers. These are the people (well, companies, I'm sure) that have feedback scores in the hundred thousands. They make their money by moving a lot of products with small margins. They undercut the low price by a fair amount to be sure they have a quick sale. For example, when Sonic Adventure 2 was $35, a volume seller listed a copy for $20. New sellers then see the low price is $20 and start inserting their copy between $20 and $25, undoing all your market manipulation. What's even worse is when there are multiple volume sellers attempting to undercut each other; at one point the $20 low price was cut down to $12 so there were many copies priced between $12 and $20.
Another issue is the people who attempt to undercut your price by $0.01 to $0.05. Numerous times I had the cheapest copy, only to see someone price there copy $0.01 cheaper than mine and sell it. You can't beat these people at their own game because when you reduce your price they reduce theirs within a few minutes; I'm guessing they use a bot. For a week-long period I had three different sellers use this technique against me (all three of there copies sold) until eventually a volume seller undercut as all by $20.
I guess the conclusion of my experiment is that you can influence the Amazon market for limited-seller items but only in the short run. In the long run, there are enough sellers who don't care about getting the maximum profit for this one item so you can't inflate the price too much. The most you can get is a couple extra dollars if you're lucky.
With those observations, I had an understanding of how Amazon's prices change in relation to new sellers. I thought that I could artificially create new clusters simply by setting my price equal to that of the fourth- or fifth-cheapest item for sale. Any items whose sellers didn't match my price would be quickly purchased, leaving only two or three items matching my price, allowing me to raise the market price and repeat the process.
My method worked. I was able to raise the low price for Sonic Adventure 2 from $25 to $35 (a forty percent increase) in a one week period, despite only two copies of the game selling.
A few market conditions which aren't immediately obvious prevent this from being a viable technique. First, and most importantly, are the volume sellers. These are the people (well, companies, I'm sure) that have feedback scores in the hundred thousands. They make their money by moving a lot of products with small margins. They undercut the low price by a fair amount to be sure they have a quick sale. For example, when Sonic Adventure 2 was $35, a volume seller listed a copy for $20. New sellers then see the low price is $20 and start inserting their copy between $20 and $25, undoing all your market manipulation. What's even worse is when there are multiple volume sellers attempting to undercut each other; at one point the $20 low price was cut down to $12 so there were many copies priced between $12 and $20.
Another issue is the people who attempt to undercut your price by $0.01 to $0.05. Numerous times I had the cheapest copy, only to see someone price there copy $0.01 cheaper than mine and sell it. You can't beat these people at their own game because when you reduce your price they reduce theirs within a few minutes; I'm guessing they use a bot. For a week-long period I had three different sellers use this technique against me (all three of there copies sold) until eventually a volume seller undercut as all by $20.
I guess the conclusion of my experiment is that you can influence the Amazon market for limited-seller items but only in the short run. In the long run, there are enough sellers who don't care about getting the maximum profit for this one item so you can't inflate the price too much. The most you can get is a couple extra dollars if you're lucky.
Saturday, March 3, 2012
3/3/12 (and 2/25/12) Purchase Summary
First of all, sales last week were terrible. For the third time in my life I bought nothing.
Sales this week weren't much better but I got lucky; I ended up spending $6 total. $3 was spent on myself, $1.50 was spent as an investment, and $1.50 was spent on others.
First -- and most importantly -- the item I purchased for myself. I purchased a new, factory sealed bread machine/baker for $3. This is one of those items I always wanted to buy if I saw it cheap and new at a sale but would never pay more than a few dollars for. My dad was surprisingly enthusiastic; we'll see how my mom reacts.
I bought two investment items today. The first was a psychology textbook for $0.50. Textbooks -- especially psychology books -- are always a risk because new editions get pumped out so quickly making old editions worthless. I figured this one was worth the gamble because it was only $0.50, the most I will pay without checking the value on Amazon first, and the copyright date is 2010. As it turns out it starts around $37 on Amazon so my investment was worth it. I estimate getting $28-$30 for it on Amazon after shipping and fees or $60-$80 on Craigslist; the Craigslist market is that heavily marked up. My other investment was a hiking pole. It's not nearly as nice as the ones I purchased on January 14th. I'll probably get $15-$25 for it.
My last two purchases were for others. The first was a word game for my sister: Upwords, for $0.50. I have never played it so we'll see how it is I guess. The other is forty shots of Polaroid 600 film for $1. It expired in 2007 but still works surprisingly.
Sales this week weren't much better but I got lucky; I ended up spending $6 total. $3 was spent on myself, $1.50 was spent as an investment, and $1.50 was spent on others.
First -- and most importantly -- the item I purchased for myself. I purchased a new, factory sealed bread machine/baker for $3. This is one of those items I always wanted to buy if I saw it cheap and new at a sale but would never pay more than a few dollars for. My dad was surprisingly enthusiastic; we'll see how my mom reacts.
I bought two investment items today. The first was a psychology textbook for $0.50. Textbooks -- especially psychology books -- are always a risk because new editions get pumped out so quickly making old editions worthless. I figured this one was worth the gamble because it was only $0.50, the most I will pay without checking the value on Amazon first, and the copyright date is 2010. As it turns out it starts around $37 on Amazon so my investment was worth it. I estimate getting $28-$30 for it on Amazon after shipping and fees or $60-$80 on Craigslist; the Craigslist market is that heavily marked up. My other investment was a hiking pole. It's not nearly as nice as the ones I purchased on January 14th. I'll probably get $15-$25 for it.
My last two purchases were for others. The first was a word game for my sister: Upwords, for $0.50. I have never played it so we'll see how it is I guess. The other is forty shots of Polaroid 600 film for $1. It expired in 2007 but still works surprisingly.
Thursday, March 1, 2012
My Amazon Experiment, Part 1
Back in January, I mentioned that I was doing some experiments on Amazon Marketplace to see if it is possible for for individual sellers to influence the market price for an item. After very limited success, I have concluded it is not possible.
First of all, I'll explain my hypothesis. For those of you who don't know, Amazon Marketplace is a place for individual sellers, such as I, to sell their products on Amazon. In return, Amazon gets a cut; I will explain Amazon's fee structure in a future post. I hypothesized that an individual seller could attempt to raise the Amazon market price for an item by changing the price of his or her item frequently enough. Obviously, this would only work for items for which there were relatively few sellers. I experimented with my TI-92 graphing calculator and a copy of Sonic Adventure 2. Both items had twenty or fewer sellers during my experiment.
When initial viewing the demand for Sonic Adventure 2 on Amazon (I was trying to determine a good initial insertion price), I noticed that prices tend to cluster. For example, the first seven prices could look like this: $25.00, $25.25, $27.00, $27.00, $27.00, $27.01, $27.99. The pattern repeats as you go higher in prices; the following four prices could be $28.50, $28.99, $28.99, $29.00. These clusters of close prices are the floors I mentioned when I first introduced my experiment in January.
I noticed that if sellers noticed a new cluster being created, sellers with prices below the cluster would raise their prices to just below the cluster, meaning that if the prices were $20, $21, $23, and $24 and another seller inserted the item at $23, the price breakdown would frequently shift to $23, $23, $23, $23, $24
This concludes my initial observations. Next post I will discuss my methods and why, eventually, they fail.
First of all, I'll explain my hypothesis. For those of you who don't know, Amazon Marketplace is a place for individual sellers, such as I, to sell their products on Amazon. In return, Amazon gets a cut; I will explain Amazon's fee structure in a future post. I hypothesized that an individual seller could attempt to raise the Amazon market price for an item by changing the price of his or her item frequently enough. Obviously, this would only work for items for which there were relatively few sellers. I experimented with my TI-92 graphing calculator and a copy of Sonic Adventure 2. Both items had twenty or fewer sellers during my experiment.
When initial viewing the demand for Sonic Adventure 2 on Amazon (I was trying to determine a good initial insertion price), I noticed that prices tend to cluster. For example, the first seven prices could look like this: $25.00, $25.25, $27.00, $27.00, $27.00, $27.01, $27.99. The pattern repeats as you go higher in prices; the following four prices could be $28.50, $28.99, $28.99, $29.00. These clusters of close prices are the floors I mentioned when I first introduced my experiment in January.
I noticed that if sellers noticed a new cluster being created, sellers with prices below the cluster would raise their prices to just below the cluster, meaning that if the prices were $20, $21, $23, and $24 and another seller inserted the item at $23, the price breakdown would frequently shift to $23, $23, $23, $23, $24
This concludes my initial observations. Next post I will discuss my methods and why, eventually, they fail.
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