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 a service to society.
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.
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.
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 and transferring risk away from original sellers is the value this offers to the CL community.
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 business with him. I think most people on Craigslist see it as the lubricant between buyers and sellers, intended precisely to replace middlemen like him. I think his ability to sell that liquidity and risk-transfer for profit would depend on his ability to blend in.
You might reasonably argue that I'm wrong. But if you do, then not only would you not object if (in a hypothetical universe) we were to clearly and involuntarily distinguish dealers and Craigslist profit-makers like him from the regular buyers and sellers, but you would see it as beneficial to him.
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).
Feedback histories show that eBay dealers are active users with the greatest number of transactions, and that those with the longest histories are successful because they continue to conduct themselves well. But it doesn't say much of anything about whether individual buyers or sellers anywhere (but especially Craigslist) would prefer to transact with dealers rather than other pedestrian users when given those choices.
But most of all: Amazon and eBay are themselves middlemen. They take a cut. Every time you buy or sell, a cut goes to support the platform you used to find and buy or sell. Active dealers with more transactions give more support to those sites. If you like using them you're probably okay with those dealers.
Craigslist doesn't take a cut (outside of certain job postings in certain big cities). It's a community platform for individuals. Dealers profit only themselves, contribute nothing to support the site, and offer little if any dubious "value" with their interference. This is not exotic knowledge for users of Craigslist.
Let me put a personal spin on this to explain it better.
3 years ago I was broke and bought stuff on craig's list, (specifically camera equipment) and sold it on eBay and held some and sold it on craig's list later. I negotiated hard on the phone and only bought stuff far below market value.
I only sold stuff for far above market value and I ended up with an extra $300 a month or so which was a huge difference in my lifestyle.
I noticed something with the sellers I dealt with. Most were wealthy, or made very good incomes and just wanted to get rid of the item. They didn't want to deal with a bunch of buyers, they wanted someone who would give them cash fast in a straight forward transaction. That is the "service" I did for them.
Buyers wanted the item, but wanted someone who would tell them it worked, and back it up, provide good photos and description etc.
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Fast forward 3 years and I make enough money that when I buy and sell stuff on craig's list I am primarily interested in a fast, easy transaction where I'm saving money over the new price, but not concerned about getting an extra $20 out of it.
I basically changed places and I am happy that middlemen are able to provide me with fast, easy transactions.
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One tip too. To get the absolute best deals put up WANTED ads on specific items. I bought stuff for ridiculously low prices that way. 60% off the mean. And you don't have to be the first to respond to the ad. A lot of people search for the item they are about to sell before they post it and when they see your WANTED ad, you provide the service they want and they are happy to get less than the item is worth.
I know when I moved out of my last apartment, I sold my washing machine for a couple hundred dollars less than I could have made, because it needed to be gone by the end of the week. I don't have storage, I don't want to keep something that size sitting around my new apartment. I totally understand and appreciate what we're both getting out of the deal.
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.
Given how many utter flakes I've experienced when selling (or even giving away!) stuff on Craigslist, I think liquidity here actually has tremendous value.
And unlike modern stock trading, not all Craigslist listings are created equally. He seems to be doing the dirty work that sellers don't want to bother with. Besides, everyone knows that if you want get paid a reasonable value, you put something on eBay, but that's too much hassle for these sellers.
Exceedingly useful. He's providing important information to the market and matching buyers and sellers who otherwise wouldn't have met each other. There was a recent Econtalk podcast with Mike Munger on this subject: http://www.econtalk.org/archives/2008/10/munger_on_middl.htm... , in which Munger and the host, Russ Roberts, discuss the role of middlemen and making markets.
Without him in the picture, buyers could have purchased their items for less and saved money.
Without him in the picture, buyers might not have found the items and wouldn't have the benefit they think buying the items at all will give them. He's doing a major public service.
> Without him in the picture, buyers could have purchased their items for less and saved money.
And yet, they didn't. The items he's selling are still cheaper than they would have been brand new, and he's in effect connecting people with items they want, for cheaper enough for them to afford them, for a relatively small fee.
You ought to rally against real estate agents, brokers, etc. harder than against this guy.
Considering he's getting these items off Craigslist and turning around to sell them on Craigslist, the only reason people aren't saving money is that they aren't beating him to the initial purchase.
Well, that and managing to ferret out poorly displayed/marketed items and re-post them with better advertising. That is a valuable service, but I'm not sure how much of his activity can be meaningfully characterized as doing so.
Real estate agents and the like bring an awful lot of time, skill, experience and special knowledge to their problem domains that their clients don't have. What does someone like this Craigslist middleman contribute?
Do buyers and sellers go to this man the way people go to real estate agents for their services? What would Craigslist buyers and sellers think of what he does if they knew about it? Respectfully, I think they would strongly prefer he weren't interfering.
> What would Craigslist buyers and sellers think of what he does if they knew about it? Respectfully, I think they would strongly prefer he weren't interfering.
Having tried to buy things on Craigslist, nice, clear photos are amazing - it saves me the trouble of shlepping somewhere, looking at the clearly mis-represented item, sighing, and shlepping back home.
As far as the sellers, what exactly are they losing? They stated the price they wanted to sell for, and they got it. You could argue that they could have gotten more with a better camera, some cleaning, and a better ad, but at that point you can argue that nobody should hire ad agencies.
Who hired this guy for his "services?" The buyers or the sellers? Someone at Craigslist?
If he's in the business of helping people buy and sell things on Craigslist then he should go to prospective buyers and sellers on that basis. And if he did, he would not make the kind of profit he's making.
Not to mention, when i give something away on cl, I'd like it to go to someone that needs it, not a wheeler dealer parasite living off the goodwill of others. Imho
The reseller needs the money he makes too. This guy was clearly in a bad situation when he started and being a "wheeler dealer parasite" provided for his family that needed the money.
How is this worse than someone who needs the item getting it for free?
Respectfully, I would encourage you to find someone personally to give your item away to. Craigslist is not a charity, it's a marketplace for people to buy/sell goods. Giving away an item on Craigslist is like throwing bread to ducks at a duck pond. If you indiscriminately throw bread up in the air at a duck pond, would you blame a squirrel for coming by and snatching a bagel every once in a while?
Nobody forced you to give him the stuff. As long as he's not lying about what he does - and we have nothing to indicate that he is - the seller is free to make that decision for themselves.
It's low-end Goldman Sachs market-making. Tinman Sachs, maybe. Not extremenly different from panhandling. It's definitely abusive of the Craigslist community.
Blah blah "price discovery is a service in a free market blah blah" does not apply to Craigslist.
There are a few ways a job like this could be ethical and productive, respecting the hippie community culture of Craigslist but improving efficiency in exchange for a share of the profit, instead of merely siphoning gains out of the system:
* Buy items that fail to sell (perhaps because they are geographically remote), and resell them from a more accessible location. http://craigstruck.com is a variation on this model.
* Buy junk, fix it up, resell it. ("Upcycle"/ "speculative repair work"
* Take good stuff that doesn't sell, and re-market it better.
[0] "spec" is a funny auto-antonym: "Speculative" or "to specifictaion"
For the purchased items I think it's fine, but for the items people are donating, the intent is usually that they be claimed by someone who plans to use them, not someone who plans to flip them. Though it does depend on the item; sometimes people give things away because they just want to get rid of them, especially with hard-to-move things like appliances. You can sometimes tell by the tone of the listing what the intent is, and I suppose it's up to each person's ethics whether they want to respect that.
It's a big controversy in communities like freecycle that attempt to maintain a certain charitable ethos and actively say that flippers aren't welcome, sometimes with exceptions for people who repair things (it's usually considered okay to take something broken free with the intent to repair and sell it, because that isn't pure flipping). Probably less controversial on Craigslist, which is a bit of a free-for-all.
I'm just now leaving an apt and put up stuff on CL. Some of it I'm willing to give for free (donated a bunch to charities, but they won't take everything)
As long as someone takes care of moving out of my place, I'm happy. If it goes to someone like this guy who flips to make a living and support his family, that's cool with me.
I think the point is that Craigslist itself is supposed to connect buyers and sellers, and he's inserting himself aggressively between them for profit, adding no real value.
1) He retakes clear photos of the merch at a variety of angles - something that many craigslist postings lack
2) He himself has a threshold of quality, and inspects the product before picking it up from the original seller - I would much rather trust a guy who buys 10 cordless drills a week on craigslist to know the drill is bad, than relying on my limited knowledge of cordless drills and their common defects.
I'm willing to pay a few extra bucks for his vetting.
What kind of "value" is added that is secret? Don't you think buyers and sellers alike should know up front what they're paying for?
To the seller: I'm going to make probably $100 on this washer in a couple days by Windexing it and taking some good photos. That's your fee for my pickup and selling "service."
To the buyer: I bought this washer a couple days ago for $100 less. That's your fee for my delivery and vetting "service."
As the previous poster observed this is essentially what Goldman-Sachs (and any other investment banker) does. When I squint and ignore scale, I can't see the difference between the two businesses.
