Those who sell stuff off and those who buy it
January 3rd, 2008 | by mbhunter |Stuff is illiquid, but it’s liquid at the right price. A boat, a car, or a house might get decent offers if the owner has time to wait for the right buyer to come along. If the offers don’t come and the owner wants to sell, nothing attracts more buyers like reducing the price. Further, nothing attracts even more buyers than offering to sell to the person who’s willing to pay the most at a given time. But selling commodity goods under these conditions usually means that the price is at a steep discount to retail.
Scott Burns’ article on MSN Money, The coming ‘yard-sale economy’, thinks that this year will be kind to bargain hunters who have cash to pick up distressed merchandise. With adjustable rate mortgages resetting, people getting laid off in the financial and homebuilding sectors, rising oil prices, and so forth, finances will become difficult for people “at the margin.” This doesn’t mean that they’re at the margin of society. It means that they’re at the margin of what they can afford. $4 gas could be the last straw. An extra $200 per month on their mortgage payment could be the last straw. Three months without work could be the last straw. Or rising prices in general without a commensurate rise in pay could be the last straw. Whatever that last straw is, some of their stuff will have to go for whatever it goes for.
This is good news for people who aren’t at the margin, meaning that they have cash. These people will help out the people who need to make their mortgage payment. Pawn shops will do this for some goods, but not all, and when they buy, it’s usually immediate. People buying at auctions (online or offline) mean that the the seller gets his money a little later, but not much later, and the range of goods that one can sell this way is virtually limitless. Or, there’s always the yard sale. Or classified ads. Or Craigslist.
If you’re in a pinch, selling your stuff is a good way to raise funds. If you’re not in a pinch, buying stuff from someone who needs to sell it is a good deal for both of you.
One Response to “Those who sell stuff off and those who buy it”
By Personal Finance Management Guide on Jan 4, 2008 | Reply
Enter the Yard Sale Economy. That’s where once-new goods go back on the market to be sold as either used (as in clothing at a consignment store) or “pre-owned” (as in the purchase of an aging Ferrari or vintage Patek watch). Lots of people are going to take stuff out of their closets and garages and try to sell it.