Library of ideas
Library of Ideas

crucible of experience
Crucible of Experience

stairway to a fortune
Stairway to a Fortune

Treasury of Tales
Treasury of Tales

Vault of Old Videos
Vault of Old Videos

Portfolio of Motivation
Portfolio of Motivation

Table of Negotiation
Table of Negotiation


Additional articles:

Get Rich After Retirement

Never Break the Copper Rule!

Barter Page

Fourth Step to a Fortune:

step 4 garage sale
I passed this sign near my house.

Picking bargains at Garage sale to grow capital

Vision

 I close my eyes and visualize negotiating with the ladyrunning the sale.

Experiment Title

Buying cheap and selling dear.

Objective

From $3.90 in reserve capital, I plan to invest up to $ 1.10, looking for a return of $1.21 or greater.  This would include a profit of $ 0.10 or more.

Hypothesis

If I purchase Stephen Hawking's book, The Universe in a Nutshell for under a dollar, I believe I can turn it for a profit. I believe we can get better than normal pricing on ebay by using an embedded video with 2001 A Space Odessey playing in the background while turning the pages of the book.

Procedure

Driving by, I spotted this sign for a large garage sale.  Actually it was a yard sale.  I decided it might present a buy low sell high opportunity.  I had no way to check market prices so I drove home and got my lap top computer with an air card to check out any prospects.

lady garage sale attendent

I returned and found the Stephen Hawking book. Market research on ebay showed it had sold for as much as $7.96 and as little as $1.92.  with a some auctions going without bids.  Using techniques advocated by Jim Thomas in his book, "Negotiating to Win", I set my negotiating envelope at between 25 cents and $1.00, I might have a viable deal here.  

I would open the bidding at $.25, with first concession to $.50. By design, my next concession would be smaller than the first giving the message that I was nearing the end of my envelope. So my plan was to offer $.75.  (notice that I decrease the concession the closer I get to the limit of my envelope.) My next concessions could be $.10, then $.05 and so on until my envelope was exhausted with deadlock and no deal.

With designed concessions, the negotiator is giving messages throughout the whole process.  If you made the concessions larger and larger, the seller would have reason to believe you still had more money on the table and not be encouraged to settle. 

The above was the plan, but what really happened was I asked her how much she wanted for the book.  She said she would take $.50.  Not many Americans realize this, but it is really rude to accept the first offer.  In countries where the negotiators are skilled, to do this would make the seller think he was leaving money on the table.  You want the seller to be happy, so I offered $.25 and she took it.

I immediately took the book home, spread it out on a red drop cloth and made a video of me turning the pages of the book with 2001 Space Oddesy playing in the background for drama.

I embedded the video in an ebay auction and I was in the market.

Results

I got no bids.  My book had no dust cover and I think I asked too much for the shipping.  I offered the book on craigslist for $5.00 but again got no takers.  I was about to relist on ebay with a more reasonable shipping charge when I found myself thinking how much I would have to pay to buy a similiar book to replace this one.  I really wanted it in my library.  It didn't make cents to sell it for less if I was willing to pay more for my own uses.

Since I wanted to keep the book anyway, I considered getting my wife to buy it for me. My son said I couldn't write this up as a completed sale if I bought it myself, so I just sat on this a while. I could have sold it on ebay or Amazon books, but it only cost me a quarter and I probably would not rest until I had paid $5 to $7 for another one for my own purposes.

In the end I decided that I would take money out of my library pocket and put $2.00 in my penny capitalist pocket. There are no rules. I can make them up as I go.

Large companies buy other companies so they can control the prices and quality of their suppliers. A conglomorate paper company could buy a small pulp supplier and then set the prices low for pulp in order to show a higher profit for the main company. They could do the opposite if they were wanting the pulp company to show the profit. That's the multi-pockets of capitalism on a large scale.

On a penny capitalist scale, a bar owner knows he can go broke drinking his own booze. The smart thing to do if he drinks something is to take money out of his own pocket and put it in the register just as if a regular customer had bought the drink.

This is what I did! I bought the book from myself. So I got to sell my book and have it too!

Questions

Why did my offer fail?  What can I learn from this to make future deals more valuable?

Conclusion or Final Result

My shipping price on the original listing may have been too greedy. it cost me a deal but it worked out in the end. I really wanted to keep that book.

I also learned I can structure a deal any way I want to get the results I want.  Here I wanted to make a good negotiation, a smart marketing plan, and increase my capital.  I did all of these things by using a similiar technique as the mega companies do.  I did business with myself.

I started with $3.90 in capital. I was looking to risk $1.10.  When it was all over I had $5.65.  As a good citizen I pay 35%of the 1.75 for taxes= 0.61 which leaves $1.14.

As a good person I contribute 10% of 1.14 to a worthy cause =.11 which leaves us with $1.13 net this deal, total of #5.03 for investment capital and surplus in case things go poorly.

Actual investment                                     .25

Total expenses                                            0   Listing fee waived

Profit or loss  this deal                         $1.13

Note:  If you contribute to a government approved charitable organization, you pay taxes after the deduction.  If you give to a cause you approve, you'll have to pay the taxes on that amount. It all depends on whether you want to limit your giving to official causes or just someone you feel needs the money. Also, if you give in secret, you'll have a harder time claiming the deduction.  Your choice!

 

Ending capital  $5.03

Next Step 5