Sunday, January 4, 2015

Craig's List versus ebay: an illustration

As may be reflected my former posts, I use Craig's List on a regular basis.  It's been a great way to clear my house of some debris and I have also benefited by identifying new debris to accumulate.  Of late, I've been watching the posts for a snow blower.  I was able to purchase a used one recently to replace my non-working snow blower, but am considering a second for both back up and perhaps lighter snowfalls.

Most recently, I was attracted to a listing for a Toro – great brand and great reviews.  The ad indicated that the machine was about 3 years old, works great and that the seller had originally purchased blower for a little over $600.  The seller was asking $390.  What made the ad more interesting was that the seller indicated that the reason for selling was that he was moving from beautiful upstate New York to somewhere in Georgia in 30 days and the ad was identified as being posted for 22 days or so.  I thought that unless there was a major storm on the near horizon, the seller was a bit high in his asking price.  In fairness, used snow blowers are difficult to price – they're hot when its cold (specifically snowing) and they're cold when the weather is hot.  Regardless, this seller was pricing his machine a distance from where I envisioned a good price would be for this machine so thinking I had nothing to lose, I sent the seller an email stating, “if you run out of time, I'd be interested at $200.”

Shortly thereafter, I received a response from the seller stating, “I'll take it to Georgia and put it in my garage before I sell it for $200.”  I considered sending back a snarky response such as “good plan,” but I followed my better instincts to drop it.  I was surprised a few days later when the seller sent me a “courtesy” email to let me know that he had listed it on ebay... “in case you'd like to bid”.  This brings me to my first point that is valid for both Craig's list or ebay – always be cordial in your interactions with others.  From my perspective, I was less motivated to bid due to the gruff initial response from the seller – thinking thoughts such as “if I win this at $100, will this guy sabotage the machine?”    Nonetheless, I thought if the machine went cheap enough it might be worth the risk so I took a peak at the ebay listing which brings me to my first point of contrast between ebay versus Craig's list.  With Craig's list you are largely on your own in regards to ascertaining the character of the other party.

Craig's list encourages you to “deal local” but there is no way to ferret out local whack jobs.  Ebay provides feedback from others who have dealt with the individual.  I found it reaffirming that my seller with the snappy response about storing his snow blower in his garage had received similar feedback about attitude on ebay bringing his feedback rating down to around 96% (not terrible, but not great).  As a result of my initial negative experience with the seller via email and his ebay feedback, I lowered my top bid to around $150 and when the auction concluded the winning bid (not mine) was around $225.  Undoubtedly, if the seller's initial email response was a bit more cordial and the seller's ebay ratings reflected strong character, I would have been more inclined to stretch my bid limit to $250 or so which would have provided the seller with a more satisfactory sales price.

There are several interesting points to be made from this illustration.  First, Craig's list is ideal for big, heavy, “can't be shipped easy” type items.  In my opinion, Craig's list is the better way to sell a snow blower and if this seller were a bit more tactful, I believe he could have been very successful using Craig's list.  The seller clearly marked his ebay listing, “Local Pickup Only,” but as should be apparent local pickup greatly narrows the pool of potential buyers.  The strength of ebay is that it is an online marketplace with a huge number of buyers; in this instance, the seller narrowed his pool to only about 3 perspective buyers.

At first glance you may say that $225 is $25 more than I had offered the seller, but a second point to keep in mind is that there are fees involved with ebay in contrast to the free service provided by Craig's list.  On a positive note, one of the strengths of auctions and ebay specifically is the predictability of the sale.  In this case, the seller knew he had about a week to sell his snow blower before his move.  Ebay was a great way to ensure this was accomplished.  The trade off for this predictability of a sale is the uncertainty of the price as is well demonstrated here.   Craig's list provides an opportunity to have greater control over the price you accept.  For example, instead of responding “I'll store it in my garage...” this seller would have been much wiser to come back with an earnest response such as “I feel $200 is a little low, could we meet at $290" (or whatever amount).  This would have opened the door to dialogue (whether with me or with any others who likely contacted this seller).  I have little doubt that if the seller had a bit more sales smarts and tact, he could have easily sold his snow blower through Craig's list with no fees for more than the $225 that his auction fetched.  One of the interesting things that this seller did well was to notify those that had expressed an interest from Craig's list that he had listed his item on ebay.  This brought some perspective buyers to the table.  Had he not done this, I would not have been surprised if his snow blower may have sold well under $200.  (I certainly wouldn't have been looking for it on ebay and it is likely the other bidders learned of the listing the same way that I did).

Another take away from this illustration is the importance of pricing your item right.  In this case, the seller had priced and insisted on $390.  After not selling for 22 days, that should have been a wake up call that he had priced it too high.  Regardless of what you are selling on Craig's list, if you have not sold (or been close to selling) your item it is likely that you should take a second look at your ad to make sure that it accurately represents what you are selling (maybe you need to add more details to attract buyers) and also assess whether you need to adjust your price to come into line with what the market is telling you.  A third option may be to evaluate the timing – if it is a seasonal item you may need to wait to better time your item.  (For example, sell your lawnmower in the Spring and your snow blower around the first significant snowfall if you have the luxury of time).

Finally, I cannot emphasize enough the importance of being cordial in your business communications.  Snipping through email or brash responses are not in your best interest; it is truly better to kill them with kindness.  This concept applies regardless of which side of the transaction you may be on.  When I sell I Craig's list my first responses to prospective buyers are to those who sound courteous and responsible in their email message.  Similarly when I purchased my current snow blower, I offered the seller $150 to which he responded, "I've been offered that by others, but I'll take it from you because you cared enough to show up" (and I also struck up a friendly rapport when I did show up).  Being nice does not mean you need to be a door mat, you can negotiate and state differences of opinion in a kind but firm manner.