Tuesday, January 25, 2011
When Buying Used, Compare to Other Used Prices
Tip #283 - When buying Used, Compare to Used Prices. I am a big proponent of buying things used. Most of the time, buying things used will cut the cost of an item by at least 25% and sometimes as much as 95%. As long as the item is in acceptable condition and has enough life left in it, it is preferable to buy this way in order to save money. You have to find what is acceptable to you for buying used. It may include household items, furniture, clothes, toys, cars, or other things.
As with any item you buy, make sure you do the research first to find out exactly what it is you want to buy and secondly find out if you are paying the best used price for it. Most of the time, the used price will be better than the new price, but you really want to find out if the price you are paying is better than buying the item used elsewhere if it available elsewhere used.
For example, suppose you want to buy a small clock. You do your research and decide you want to buy a brand called LaPort (made up name for example). The best price you can find in the store is $79 and that is when it is on sale. However, you decide you really want to pay less than that and you scour the Craigslist ads. To your delight you find one listed on there for $40 and are thrilled. You check it out, find out that it is 3 years old and in pretty good shape. You buy it and are happy that you paid half price for this clock. So did you get a good deal or not? Well, it's really hard to say. Sure you paid 50% of retail but the item has some wear and has three years' of use on it. It would be expected that it would cost less than retail. The truth is, it's hard to tell if you got a good deal because you are comparing a used item to a new item. The best way to see if you got a good deal is to compare it to prices of the preowned items.
A good place to check out used prices for things is eBay. If you can beat eBay's price, then you are doing pretty well. Because eBay is such a large marketplace you can get a good idea of the value of the item. However, sometimes there is a bit of auction fever on there, and prices go unrealistically high. So the best policy is to look at several of your item and take the typical price your item sells for. If you are buying locally, the price should generally be a bit less than eBay's price not including shipping. So suppose after you buy the clock, you look on eBay and see that most of the used clocks are selling in the $50-$55 range plus $5 shipping, then you can feel confident that you got a good deal on your used one. But supposed the clocks are mostly selling for $25 then it appears you have overpaid a bit.
It may not have seemed that you overpaid at first because the price was better than if you had bought it new. But if you can get it elsewhere used for an even lower price, then it isn't a good deal. The reality is, used items should cost less than new ones, so the best way to tell if you have gotten a good deal is to compare it to prices on used items, not new ones. If the item is somewhat uncommon or hard to find used, then you have no choice but to compare it to new items and see if it is worth buying it at a lesser price for an item that has some wear or use on it.
Also, when buying used, there are other things to consider, how quickly you need the item, whether you can touch the item and test it out, how convenient it is to pick up the item, and the item's condition. Take all of those things into consideration, too when deciding if a used price of an item is fair. But just make sure you don't fall into the trap of only comparing the item to new prices, if it is available used elsewhere, as that is a better gauge of the true value of the item.
In Real Life (IRL) - As most of my posts come from circumstances and experiences I have had in real life, this one is no different. I am an experienced thrift store, Craigslist, and eBay buyer. I an generally a smart shopper and can gauge whether I am getting a good deal on things I buy. So I don't know what happened to me last week when I got caught up in the buying fever and overpaid for something used. Here is the story...
My son is a HUGE Thomas the train fan. All along he has been collecting the die-cast metal trains with plastic tracks. But at friends' houses and other places he has become enamoured with the wooden sets. And I was starting to see the value in the durability of these sets. So for the first night of Hanukkah I bought him a small wooden starter set (new and on 1/2 price sale) as his big present to open. I wasn't yet convinced I wanted to switch over to the wooden tracks completely but I had no other "big" gift for him, and I knew he'd enjoy it. Then one day a couple of weeks ago, my husband took my son to the thrift store. And while they were there a staff member put out a big tub of wooden Thomas tracks, bridges, and building. The price was $16 and absolutely was a steal. Needless to say, my husband bought it, and when they came home we set up all of the track on our train table.
And it was clear at this point, that we were not going to get away from collecting the wooden Thomas trains and tracks. On the next free day, I went over to AC Moore, a craft store that carries wooden Thomas trains to check out their prices. Like Michael's, they have 40% off coupons (and sometimes 50%) in the paper and on their website. I was shocked at how expensive the wooden trains were - $12.99 to $16.99 for a single train and $19.99 to $22.99 for a train with a coach. Ouch, even at half-price the cost would be a minimum of almost $7 per train with tax. The next day, I looked on Craigslist to see what people were selling. Unfortunately, most people were selling tracks or a train table which we didn't need. But one woman was selling a set that included 25 trains among other things for $100. "$4 per train?" I thought. I figured it was less than half price of the ones I saw at the store, so I went over her house and purchased them.
But after I came home I got buyer's remorse. I don't know why, as I am an experienced buyer, that I did not look around at prices of used trains elsewhere. I just compared the prices of the new trains at the store. And I only was interested in the trains. The seller included tracks and some other things that I didn't need, so while $100 was an okay price for the whole set, it really wasn't a smoking deal for just the trains. And I realized that when I started searching eBay for lots of used wooden Thomas trains. Many were going for $3 or less per train including shipping. I got a sinking feeling in my stomach that I overpaid because even though they were less than half price of the new trains, they were also significantly used. Some were missing pieces; paint was peeling on others. They should have been significantly less than new.
I was beating myself up over this purchase. How could I have been so dumb to jump on the first deal I saw? Why didn't I research the prices of used wooden Thomas trains first? I know it's because I went to the retail store first and was comparing the used prices to those prices, and it wasn't a fair comparison. If I had looked at eBay first, I would have realized that I could easily do better than $4 per used train. I feel a bit better about my purchase now because over the weekend I was able to sell off the tracks and buildings that came with that lot for $35 which brings my cost of the trains to less than $3 per train which is more in line with the going rate of used wooden trains. And I've learned my lesson when buying used.