I’ve been hocking my family’s treasured possessions on Craigslist. We’re moving out of San Francisco, and where we’re going we don’t need Herman Miller office chairs with broken central pistons. I completed my first sale three weeks ago, offloading some of my old Nintendo 64 games to what I hope is a good new home. When the buyer came to collect the games he gave me ten bucks more than the price we’d agreed, apparently because he thought I had fleeced myself so hard. I suppose I’m glad that he got a good deal, but I would have preferred it if I’d captured at least a bit more of the transaction’s surplus value.
Fueled by this failure, I’ve since devised a set of principles for maximizing profit and evaluating success as a Craigslist seller. The principles aren’t exactly useful or ethical, but that makes the maths easier and the writing funnier. Of course, if your sole and only goal really is maximizing profit and you really don’t care about karma, then you should just fill your ads with lies and jack up your prices once someone has already driven for forty minutes in order to pick up your old air freshener. Just don’t expect to make any friends or to escape the burning fires of hell.
Setting prices on Craigslist is difficult. It is particularly difficult for items with few direct comparators. If you’re selling a boxset of The Wire then you can just look at what price everyone else is asking and add a few dollars for your nice-person fee. But what if you’re selling a couch? Some couches are listed for a thousand bucks. Others are listed for ten. Our couch came from IKEA and is a few years old. We’ve taken pretty good care of it, although we have no way of proving this to anyone. Is three hundred about right? That person’s only asking one-fifty, and their’s looks kind of like ours.
Typically I’ve set my prices after a quick survey of existing ads and my gut, and hoped for the best.
Once you post your ad, you are typically either inundated with enquirers who believe they have spotted an underpriced bargain, or completely ignored. In order to feel like you truly maximized your profits you really want to get one enquiry, a few days after you make the post, from someone asking if there’s any chance you could possibly budge slightly on your asking price. This suggests that you set your price right at the top of the market’s range, and probably couldn’t have gone any higher. In my experience this rarely happens.
Getting inundated with enquiries is in some ways a nice problem to have, but it also means that you almost certainly underpriced your item. The pro-slash-dick-move in this situation is to quietly de-list your item and post it again after bumping the price by twenty-five percent. However, this doesn’t feel like the honorable Craigslist behavior that I want to teach to my children. The even more pro- (and slightly more ethical-feeling) move is to set your initial price at the absolute limit of what you think anyone might conceivably pay, then repeatedly re-post it over the next few weeks, dropping the price by a few percent each time until someone bites. That’s optimum salespersonship right there, but it’s also a lot of work just to get an extra thirty bucks for your TV.
In order to feel like you’re winning, you don’t want to sell to anyone who is willing to travel a long way to pick up your item. Your buyer is paying for your item with money and with the time that it takes them to come and pick your item up. You get no benefit from your buyer’s investment of time, and so you want them to pay as large a fraction as possible of the total cost with money. Ideally, you want to sell to someone who lives next door. You also ideally want your buyer to be money-rich but time-poor, and therefore willing to pay a high cash price in order to minimize the cost in time.
I did warn you that this post was going to be problematic in parts.
You’re likely to get a worse price - relative to some abstract notion of “fair market value” - for bulky, non-standard items (like couches). This is partly because collecting bulky items from a stranger’s house is much more difficult than getting them delivered from Pottery Barn. Your buyer pays a high price in time, and so will be less willing to pay again in cash. It’s also partly because prospective buyers of non-standard items know that there is a greater chance that they will come round to your house to view the item and decide that it’s not actually what they were hoping for. This means that it is less worth their while to take risks on items that don’t feel like a total bargain. By contrast, suppose that you’re selling a very standard item, like a DSLR camera. The buyer knows exactly what they’re going to get and can research all of the details of the item and its model beforehand. The only risk they run when traveling to your house is that your particular camera doesn’t turn on, or has a troubling-looking dent that you neglected to mention in the ad.
Now that you’re equipped with the knowledge to be a Craigslist superstar, I’d like to end with a story about negotiation.
I recently sold my bike on Craigslist. It was an extremely fine commuter bike that had taken me up Mounts Diablo, Tam, and San Bruno, as well as to SOMA and back more times than anyone could possibly count. For such a steed, two hundred bucks was a very fair price. I decided in advance that I would let prospective buyers test-ride the bike up and down the street outside my apartment without asking for collateral, and that if someone pedaled it off into the sunset then they probably needed the two hundred bucks more than me and so good luck to them.
A gentleman, whose branded t-shirt suggested that he too was employed by one of the local technology companies, came round to try out the bike. He rode down the block, and fortunately did also ride back. “The gears kind of rub when you go down into the lowest one”, he said. I estimated that he didn’t know much about bikes, and explained that he needed to shift down on the big ring as well as the small ring. He nodded. He indeed did not know much about bikes.
He looked the bike up and down, mentally strengthening himself. “Two hundred?” he said. “Yes”, I said, preparing for the inevitable. “I have one-sixty on me”, he said. You clearly did bring two-hundred though, didn’t you, I thought. “I can easily get two-hundred for it”, I said. “Oh”, he said, “so that’s a hard two-hundred?” “Well”, I said, “unless you think it really isn’t worth two-hundred?” After several more painful exchanges between two terrible negotiators, over forty dollars that neither of us needed and a shot of testosterone that we could both have probably really used, inertia won and we stuck with two-hundred. Apparently both of our fathers taught us the same kiddy-wheel negotiation tactics, since he pulled out one-sixty from one pocket and the remaining forty from the other. We concluded our business.
I felt like an absolute champion.