The general art of buying and selling. How to?

January 21, 2007 6:34 AM

the art of buying and selling aka whealing and dealing. How to improve?

Some people have a knack of spotting something thats undervalued and are able to buy it and sell it on for much higher price. Whether its records, clothes, art, houses etc they just seem to be able to spot these hidden beauties. How would one go about improving? I know practice is the obvious one but one could spend hours practicing alone any technique and get nowhere fast whereas simply reading a book, getting advice or even mentoring would get results much faster.

posted by thegeezer3 to work & money (8 comments total)

Finding bargains is one thing, negotiating price is another. Always ask if the seller if they will accept a lower price, far lower than you top price. Often they will accept your offer and if they don't what have you lost?. This works for me at name brand retailers, estate sales, even buying new and used cars... if you are asking the right person. In short, have some nerve and low-ball 'em!
posted by punkfloyd at 6:53 AM on January 21, 2007

ultimately, learn to negotiate within yourself the concept of differing worth; what an item is worth to you vs. what an item is worth to someone else. if they're setting the price as what they want for it, offer them what it is worth to you. the firmness of this knowledge that sticker prices are always suggested will help you become a better buyer simply because you won't seem like you're haggling; you're confident that you're only willing to pay X dollars for the item or walk away.

selling's someone else's niche to add advice to.
posted by dflemingdotorg at 8:01 AM on January 21, 2007

Wean yourself of the idea that it's simply a "knack," and acknowledge that good arbitrage skills come from a really deep knowledge about some type of product or field of endeavor.

Pick something you want to arbitrage, and learn about it. Learn how it's produced, how much this production costs, how it acquires value (records, clothes, and houses all increase in value for very different reasons!), talk to people in the industry to see what various trends they see coming down the pipe. Make note of these and follow up to see who knows what's what and who doesn't. Read the news consistently to see what outside events might impact the market of interest.

This is how good arbitrage is done, from small-time used car dealers to wall street equity traders. Obviously, a degree in business or finance helps at the higher end of the spectrum.
posted by rkent at 8:09 AM on January 21, 2007

What looks like a 'knack' looks exactly the same if someone totally lucks upon a bargain versus someone with intimate knowledge of the subject recognizes it.

If you want to increase your odds of being 'lucky', pick something that is obscure enough that there is no widesread common knowledge about it and become an expert, and expose yourself to places where you might get lucky. There are thousands of these niches, and surely a few will interest you.

(My own areas of specialized knowledge involve electronic lab instruments, Hudson duck decoys, antique radios, and infrequently, real estate. )

Second, be prepared to strike. If you see something you strongly suspect of being a good item, be ready to buy it. Negotiating is a tiny part of the process, not the most important. While you won't always MAXIMIZE profit, if you can benefit if you preserve the vast majority of it.

Be prepared to be wrong. Accept the fact that things can go either way. Every now and then you fulfill someone else's desire to find a greater fool.

Then, liquidate. You don't make money until you sell. Buy all the bargains you want, but if you don't turn them, you are just building inventory. Here there are many things to learn about stimulating interest, accessing an audience, packaging product(s) with accessories to increase perceived value, and holding out for your target price.

Whenever you sense desparation in a seller, circumstances are ripe for deal making. I don't do this sort of thing because I generally am ethically opposed to making money on other people's misfortune or misery, but I am old fashioned in that regard. You, however, may not be and I will tell you, under 'perfect' circumstances, people will chase you down to encourage you to buy something that is clearly not in their best interests to sell. It's sad, but not uncommon.
posted by FauxScot at 8:38 AM on January 21, 2007

Make sure not to tell anybody about your failures either. Only mentioning the successes will make you look like you can't lose.
posted by smackfu at 9:06 AM on January 21, 2007

A friend of mine is very good at this. He is experienced, he is smart, he knows a great deal about hallmarks, types of wood, joinery, history (especially military history), blacksmithing, metallurgy, books, boats, cars, photography, art, memorabilia, and so on.

He will buy an old chair with a broken leg, find the exact same wood in his scrap pile, turn an identical leg on his lathe in five minutes, and sell the chair for ten times what he paid for it. He does this only partly for the money. He learns something different each time; he saves many of these items from being thrown out; he adds to the appreciation of history; he is being good to the environment. One day he's driving an old Mercedes, the next a Morris Minor, or Rolls Royce, or MG-TD. Everything in his house is old and beautiful and warm and comfortable; his furniture goes together not because it is of one particular style, but because everything has an interesting story.

You might as well ask how to become a better brain surgeon.
Practice, man, practice.
posted by weapons-grade pandemonium at 11:26 AM on January 21, 2007

Keep your eyes open 24/7; be on the lookout for goodies, they come from any/all sources. I agree with above poster (FauxScot) in saying that you've got to strike NOW! or you'll likely miss out. ie, years ago I was looking for a specific car, watched the ads to get a sense of what it would cost, then REALLY watched the ads and when the right car came on I jumped on it immediately and went to the guys house - with cash - and jumped in front of the other 50 calls he got. Since he'd agreed to sell to me - for cash - he didn't have the guts to say 'Buzz off, I want more money' even though he clearly knew he'd left at least a grand laying on the table.

Also. Be polite. Sometimes - but very rarely - it will help to come on like a hardass, offering a dollar on something worth twenty. But mostly it'll generate ill will, and I've not sold items to people who acted like idiots and I've had people not sell to me for that same reason ie I'd come across as Mr. Tough Guy. So mostly I don't laugh if someone has an outlandish price, I just tell them "I will give you X for it" and see where they are in it, see how attached they are to it.

If it comes time to really get redneck (ie used car dealer or other alien species), you'll have to cut loose any and all of your 'nice person' tendencies and get in their face. Don't believe a word they say, it's all lies, and when you catch them bs'ing you tell them straight up, and get in their face. They don't care - it's the only language they really understand, as far as I can see - but I do care, and don't deal with people like this unless it's really necessary, because I don't like to get redneck with people. I can, and I can do it well, but I don't like to.

Be aware, in both buying and selling, that many, many people LIKE to dicker, they LIKE to bargain. I can't stand it, I think it's berserk, but I know it's part of the game a lot of the time. ie when I've sold items, even though I've clearly said "130 dollars FIRM" some mope will always offer 56 dollars. Don't take it as an insult - they are just playing a stupid game. Politely tell them "Um, I said $130 FIRM and I'm not coming off of that". Also, you can play the game by putting in $150 FIRM and letting them have the game, take your $130 after playing. I think it's stupid but it's definitely part of it all.

Last. Any time I've burned someone - either by selling them something at way too high a price or by buying something after driving them way down - I've always felt bad. Instant karma. Etc and etc. It's not worth it to hurt someone. Ever. What goes around really does come around. There are plenty of good deals to be had without getting dirty.

Have fun!
posted by dancestoblue at 11:33 AM on January 21, 2007

Wheeling and dealing is fine, but whealing can be a pain.
posted by weapons-grade pandemonium at 3:59 PM on January 21, 2007