The Psychology of Buying and Selling on Craigslist

Craigslist is a fascinating place to buy and sell – especially in a buyers market (like we have now) with lots of people looking to sell unused or unwanted stuff for extra cash.

Although location makes a huge difference in terms of quantity and selection, I have found that a quick browse of Craigslist can save me anywhere from 10-50% off the price I’d pay retail.

A few observations from recent transactions…

When buying something with a hard sale price (ex: a concert ticket with $25 clearly written on it) you should expect to pay face value if that’s the advertised cost. Transactions for items with hard sale prices seem to go very smoothly, since such sales occur with much greater frequency and often a mature marketplace of repeat sellers has emerged.

For items without a hard price (ex: furniture), or where the hard price is no longer relevant due to wear and tear or age (ex: a used iPhone), transactions are not as easy and often default into a two-part negotiation: 1) online and 2) in-person.

Online is the first part of the negotiation where the buyer has only seen a picture and read a description. The potential buyer will often ask a few questions before making an offer. The offer made is normally less than what the seller has asked for (as a seller should you always price higher expecting this?). Also, I  have found that if someone is willing to call you, the transaction is more serious and likely to materialize. Incidentally, asking for a confirmation text message several hours prior, is a great idea.

The in-person (f2f) aspect of the sale is where things get interesting. More often than not when it comes time to do the actual transaction, the buyer will try and undercut the agreed upon price by 10% or more. “Oh, I only have $20’s. Will you take $40 instead of $50?” This happens with exceptional frequency. The trick is to anticipate that this may happen and to plan accordingly. For example if this is one of 10 different bids, as a seller you may be willing to call the bluff and walk away unless you get the full amount. On the other hand, if you have put in specific effort (say customized something for the buyer, rearranged your schedule, or traveled a great distance) you might suck-it-up and take what they offer. Also as a buyer you can use this same information to your advantage; it works both ways.

Whether buying or selling, Craigslist is a fascinating glimpse into a burgeoning local consumer marketplace that functions very differently from eBay largely due to face-to-face element. People are crazy. More on Craigslist later.