Ways to Sell Your Stuff
A Survey
In this sad solemn world, there is basically only one way to sell something. You put it in your store, or on the internet, and list a price. Whatever price you think is best according to the laws of supply and demand which you keep in your breast pocket. Then you just wait for people to get interested. If they want to pay the advertised price, they can have the item, no strings attached. If they don't think the price is worth paying, they can leave.
But the truth is, there are a bunch of other ways to sell stuff. Let's compare the merits of the systems, hm?
Modern style sales. As I said, this is the system we use for 90 percent of our sales today. The merit is clear. It doesn't require much labor at all. It just requires someone to read the price tag to make sure it hasn't been doctored, and accept the money. This is a low skill job. At a supermarket or Wal-Mart, it might be the only system that is practical. I don't think it would work to force people to go through the whole rigmarole when they are trying to buy a pack of chewing gum. I don't think they would stand it.
The drawback is equally clear. If the posted price is not what people want to pay -- if you could make more money selling your vacuum cleaners for $50 instead of $60 or vice versa, you won't know unless you do a set of complicated experiments. Of course, this is not a big problem for selling little things like chewing gum. Wrigley's has undoubtedly done extensive research to determine that their gum will make the most money selling at price X.
When to use: When you are selling something cheap whose value is not hard to determine.
Haggling. Do they still sell things this way in the Middle East? Even small things (like Middle Eastern chewing gum? What must that be like)? Well I guess they can afford to. With the economy in such bad shape there, the only thing that's cheap is labor. Haggling, as of course you know, involves the seller quoting way too high a price for his item, and the buyer quoting way too low a price. Then they argue one another to a reasonable middle price. They do this in America too, sometimes. I understand that when you try to buy a car or a house or some other huge expensive thing, that the process is practically the same as in the souks.
If you can afford to waste your time and mental power arguing over the price of a flyswatter, that's great, but very few people in the West can. Moreover, you can't use any unskilled jerk as a salesman. He needs to be better at arguing prices than average, and anyone who is really good at bargaining is not going to want to take a job at a convenience store.
On the other hand, it easily solves the problem of mis-pricing your items. Since the seller chooses a price that is obviously too high, and the buyer chooses a price that is obviously too low, the correct price is somewhere in between, and it will be arrived at, provided the customer and dealer are both good arguers. Of course, if the seller is a bad arguer, he will wind up with prices that are consistently too low, but he shouldn't have gone into selling if he was bad at haggling.
When to use: When the value of the item you are selling is high relative to the cost of labor.
Raffling. Raffles are not used very often. That is one of the reasons I am sad, because raffles are one of the neatest ways to sell stuff. Here is the method: You offer something for sale, typically a big valuable thing. People then buy tickets for it. They can buy as many as they want. Everyone gets his name written on his tickets, and all the tickets are placed in a drum. One is drawn at random, and the person with his name on the ticket wins the item.
This is a pretty unorthodox way to sell things. You see the differences? Probably the biggest problem is that people are afraid of risk. Even if the expected value of buying a raffle ticket is quite high, they will tend to shy away, because the chance of winning is so low. On the other hand, some people thrive on risk. You could probably sell a lot of tickets to a compulsive gambler. And sometimes a raffle is the only way to sell something. The golden ticket game in Charlie and the Chocolate Factory was a kind of a raffle. There was really no other fair way to distribute the golden tickets, when you come to think of it. And in doing so, Mr. Wonka certainly sold a lot of candy. The raffle in Patience is another excellent example, where a mere sale might not have been sufficient.
When to use: When you are selling an item, of severely limited quantity, that is indivisible, or that you absolutely have to sell, like Wonka Factory Tours, or Reginald Bunthorne.
Lottery. Lotteries are very similar to raffles, but infinitely more popular. Lotteries work like this. People buy tickets in advance, as many as they want. When they buy each ticket, they request a number, from 1 to X. That number gets stamped on their ticket, irrespective of whether it's on anybody else's. Later on, a number is drawn at random. Everybody who has a ticket with that number submits it, and the prize gets divided evenly among them.
The two differences between this and a raffle should be obvious. First, it is not certain that anybody will win. If the winning number was 666 and nobody drew that, then nobody wins the prize, and the seller keeps it. Second, if more than one person chooses the winning number, the prize has to be divided.
Now. I am not sure that a lottery is better than a raffle in any way. Lotteries are definitely more popular, but only because it was hard to organize a statewide raffle in the pre-information age, whereas statewide lotteries are simple. We could just as easily do state raffles now if we wanted to, but tradition is a strong force. I don't even know whether lotteries make more money than raffles. Somebody ought to do a study.
When to use: When you are selling something infinitely divisible, and a raffle would be too weird or difficult to set up.
Auction. In the auction, lots are put up for sale. Many people gather in one place, and bid on the lots. Whoever submits the highest bid gets the item. The auctioneer runs the sale, and attempts to encourage higher bids.
As you might think, auctioneering is a highly skilled job. Auctions happen fast, and if you can panic people into placing high bids, then you stand to make a lot more money. Likewise, auctioneering suffers the same problems as haggling. If you get a dud auctioneer, he can let his lots get away for a lot less than they're worth. If your lots aren't worth very much, the money spent on a highly skilled auctioneer is wasted. And if you don't get enough people at your auction, you won't get very many successful bidding wars. Imagine the horrifying auction that only one person shows up at. He gets all his lots for whatever he chooses to pay.
Nevertheless, auctioning is a powerful way to sell stuff. I understand that people at auctions often bid much more than they would be willing to pay for the item in a modern market, probably due to the sense of competition with the fellow bidders. So if you can set it up, an auction is a good way to stampede people into paying way more than they ought to. The government might want to criminalize the more aggressive forms of auctioning as fraud, come to think of it. The government likes to do that kind of thing.
When to use: When you are selling fairly valuable things, and can expect a lot of buyers.
Secret Auction. These seem neat but I have no idea how well they work. An item is displayed for sale. Everyone who wishes to buy it writes a price on a slip of paper, and hands it in, without letting the others know how much he's bidding. The person who submits the highest price gets the item. I have no idea how well this works. Does it make more money than a normal auction? I doubt it, since otherwise it would be more popular. It seems pretty hit-or-miss, like it would depend a lot on the crowd you had. Probably too unstable to use regularly, but a neat concept all the same. If you found a buyer who really wanted the lot for sale, you could probably get him to pay as much as ten times its value. If you found two buyers who really wanted it, well who knows what they might pay? You could make a killing.
In this sad solemn world, there is basically only one way to sell something. You put it in your store, or on the internet, and list a price. Whatever price you think is best according to the laws of supply and demand which you keep in your breast pocket. Then you just wait for people to get interested. If they want to pay the advertised price, they can have the item, no strings attached. If they don't think the price is worth paying, they can leave.
But the truth is, there are a bunch of other ways to sell stuff. Let's compare the merits of the systems, hm?
Modern style sales. As I said, this is the system we use for 90 percent of our sales today. The merit is clear. It doesn't require much labor at all. It just requires someone to read the price tag to make sure it hasn't been doctored, and accept the money. This is a low skill job. At a supermarket or Wal-Mart, it might be the only system that is practical. I don't think it would work to force people to go through the whole rigmarole when they are trying to buy a pack of chewing gum. I don't think they would stand it.
The drawback is equally clear. If the posted price is not what people want to pay -- if you could make more money selling your vacuum cleaners for $50 instead of $60 or vice versa, you won't know unless you do a set of complicated experiments. Of course, this is not a big problem for selling little things like chewing gum. Wrigley's has undoubtedly done extensive research to determine that their gum will make the most money selling at price X.
When to use: When you are selling something cheap whose value is not hard to determine.
Haggling. Do they still sell things this way in the Middle East? Even small things (like Middle Eastern chewing gum? What must that be like)? Well I guess they can afford to. With the economy in such bad shape there, the only thing that's cheap is labor. Haggling, as of course you know, involves the seller quoting way too high a price for his item, and the buyer quoting way too low a price. Then they argue one another to a reasonable middle price. They do this in America too, sometimes. I understand that when you try to buy a car or a house or some other huge expensive thing, that the process is practically the same as in the souks.
If you can afford to waste your time and mental power arguing over the price of a flyswatter, that's great, but very few people in the West can. Moreover, you can't use any unskilled jerk as a salesman. He needs to be better at arguing prices than average, and anyone who is really good at bargaining is not going to want to take a job at a convenience store.
On the other hand, it easily solves the problem of mis-pricing your items. Since the seller chooses a price that is obviously too high, and the buyer chooses a price that is obviously too low, the correct price is somewhere in between, and it will be arrived at, provided the customer and dealer are both good arguers. Of course, if the seller is a bad arguer, he will wind up with prices that are consistently too low, but he shouldn't have gone into selling if he was bad at haggling.
When to use: When the value of the item you are selling is high relative to the cost of labor.
Raffling. Raffles are not used very often. That is one of the reasons I am sad, because raffles are one of the neatest ways to sell stuff. Here is the method: You offer something for sale, typically a big valuable thing. People then buy tickets for it. They can buy as many as they want. Everyone gets his name written on his tickets, and all the tickets are placed in a drum. One is drawn at random, and the person with his name on the ticket wins the item.
This is a pretty unorthodox way to sell things. You see the differences? Probably the biggest problem is that people are afraid of risk. Even if the expected value of buying a raffle ticket is quite high, they will tend to shy away, because the chance of winning is so low. On the other hand, some people thrive on risk. You could probably sell a lot of tickets to a compulsive gambler. And sometimes a raffle is the only way to sell something. The golden ticket game in Charlie and the Chocolate Factory was a kind of a raffle. There was really no other fair way to distribute the golden tickets, when you come to think of it. And in doing so, Mr. Wonka certainly sold a lot of candy. The raffle in Patience is another excellent example, where a mere sale might not have been sufficient.
When to use: When you are selling an item, of severely limited quantity, that is indivisible, or that you absolutely have to sell, like Wonka Factory Tours, or Reginald Bunthorne.
Lottery. Lotteries are very similar to raffles, but infinitely more popular. Lotteries work like this. People buy tickets in advance, as many as they want. When they buy each ticket, they request a number, from 1 to X. That number gets stamped on their ticket, irrespective of whether it's on anybody else's. Later on, a number is drawn at random. Everybody who has a ticket with that number submits it, and the prize gets divided evenly among them.
The two differences between this and a raffle should be obvious. First, it is not certain that anybody will win. If the winning number was 666 and nobody drew that, then nobody wins the prize, and the seller keeps it. Second, if more than one person chooses the winning number, the prize has to be divided.
Now. I am not sure that a lottery is better than a raffle in any way. Lotteries are definitely more popular, but only because it was hard to organize a statewide raffle in the pre-information age, whereas statewide lotteries are simple. We could just as easily do state raffles now if we wanted to, but tradition is a strong force. I don't even know whether lotteries make more money than raffles. Somebody ought to do a study.
When to use: When you are selling something infinitely divisible, and a raffle would be too weird or difficult to set up.
Auction. In the auction, lots are put up for sale. Many people gather in one place, and bid on the lots. Whoever submits the highest bid gets the item. The auctioneer runs the sale, and attempts to encourage higher bids.
As you might think, auctioneering is a highly skilled job. Auctions happen fast, and if you can panic people into placing high bids, then you stand to make a lot more money. Likewise, auctioneering suffers the same problems as haggling. If you get a dud auctioneer, he can let his lots get away for a lot less than they're worth. If your lots aren't worth very much, the money spent on a highly skilled auctioneer is wasted. And if you don't get enough people at your auction, you won't get very many successful bidding wars. Imagine the horrifying auction that only one person shows up at. He gets all his lots for whatever he chooses to pay.
Nevertheless, auctioning is a powerful way to sell stuff. I understand that people at auctions often bid much more than they would be willing to pay for the item in a modern market, probably due to the sense of competition with the fellow bidders. So if you can set it up, an auction is a good way to stampede people into paying way more than they ought to. The government might want to criminalize the more aggressive forms of auctioning as fraud, come to think of it. The government likes to do that kind of thing.
When to use: When you are selling fairly valuable things, and can expect a lot of buyers.
Secret Auction. These seem neat but I have no idea how well they work. An item is displayed for sale. Everyone who wishes to buy it writes a price on a slip of paper, and hands it in, without letting the others know how much he's bidding. The person who submits the highest price gets the item. I have no idea how well this works. Does it make more money than a normal auction? I doubt it, since otherwise it would be more popular. It seems pretty hit-or-miss, like it would depend a lot on the crowd you had. Probably too unstable to use regularly, but a neat concept all the same. If you found a buyer who really wanted the lot for sale, you could probably get him to pay as much as ten times its value. If you found two buyers who really wanted it, well who knows what they might pay? You could make a killing.
posted by apk01004 at 10:56 PM
0 Comments:
Post a Comment
<< Home