It's Classified!

I want to use this week’s column to personally thank Pierre Omidyar and Craig Newmark, founders of eBay and Craigslist respectively.

Thanks to Pierre and Craig, I now proudly own over a decade’s worth of stuff I probably don’t need.

I began using eBay in 1996, just socially at first, until I found myself injecting the online auction site directly into my arteries several times a day.

After years of therapy and retail shopping interventions, I weaned myself from eBay, just in time for Craig Newmark to slip me an unsuspecting Craigslist in 2006. Back I was again, hooked on looking for other people’s junk.

Thanks to eBay and Craigslist, even though I live in the Okanagan, I can now buy other people’s junk from all over the world. (The Swedes have some excellent junk by the way).

In all seriousness, both eBay and Craigslist are not only great sites for finding highly sought after stuff like Pinocchio shaped food dehydrators and Pamela Anderson, Tommy Lee commemorative divorce spoons but, believe it or not, they’re also great sites for studying marketing at a grass roots level.

Common mistakes in ‘amateur’ advertising can often be useful lessons easily adapted to the commercial marketplace.

In a recent exchange, for example, a Craigslist seller in Seattle responded to an offer on an item by telling me the offer was too low, because he knew what the item was worth. As it happens, sellers don’t dictate price, the market does.

Interestingly, what the market will pay for one item and not pay for another, despite which item may be more ‘valuable’, doesn’t always make sense. Often times it comes down to how you sell, not what you sell; and that’s the power of marketing.

Take the following two examples.

In the first, a liquid product is produced that is extremely rare and becoming rarer. It is available in only a few areas of the world. It requires enormous plants, machinery and skilled workers to create it, complex distribution channels to bring it to market and is only sold at specific retail outlets. This particular product is essential to maintaining our modern existence.

The second liquid product is quite literally available everywhere. It can be produced and packaged by virtually anyone with no major equipment, factories or skills required. Distributing it is simple and the product is widely available for sale at all kinds of retailers on every street corner, despite the fact that we can access the very same product for free whenever we want.

By these two definitions it would stand to reason that the first product would be far more valuable and demand a much higher price than the second.

As it happens, first product is gasoline. The second is bottled water.

While gasoline hovers at a dollar a liter, a penny or two increase in the price of gas can cause near riots on the streets, consumer boycotts and general disdain for the entire oil industry.
And yet, bottled water sells at a premium, in some cases for several times a liter more than gasoline, with few consumers ever complaining about the price or even bothering to pay attention to what they paid for their last bottle of evian.

The marketplace and how you sell into it is the same whether you’re Shell Oil flogging gasoline at the pumps or Fred Wimplemore pushing a 1965 Meccano set on eBay. In some cases, how you market will do more to create demand than what you market.

And for those of you who would like to treasure these words forever, you’ll be pleased to hear copies of this column are now available on Craigsliist... But, don’t bother trying to negotiate on the price, I know what these columns are worth!