Cashing in on Craigslist: How I’ve saved thousands of dollars buying used
In August, I wrote about Ryan Finlay, who makes a living through Craigslist arbitrage. Many readers wanted to hear more about how Ryan uses Craigslist to make and save money. In this guest post, Ryan explains how to use Craigslist to save money on high-ticket items like appliances and furniture. If there's enough interest, he may share more Craigslist tips in the future. Meanwhile, be sure to check out his new site: ReCraigslist.com.
“A penny saved is a penny earned,” my mother used to say. She's always been a thrifty shopper and a bargain hunter. “Pennies add up,” she'd say, but for years I scoffed at the idea. But my resistance to that message was outward and temporary; early on, I began resenting overpaying for candy or soda pop — or anything, for that matter. I began to notice that grocery stores would sell candy bars for half (or sometimes a quarter) of what the local mini-mart charged.
Bargain hunting began to intrigue me. I started joining my mom on garage sale outings, and soon I was hooked. Finding bargains was like discovering hidden treasures! I started reading the classified ads in the newspaper to supplement the garage sales and pawn shops. Garage sales provided the best deals, but were limited to the summer, leaving a void for the rest of the year.
Then, around the year 2000, Craigslist began expanding to cities all over the world, changing the way people buy and sell. Craigslist is simple, easy to use, localized, and organized into many different sections. I lived in a small town when they began expanding, so I wasn't one of the first to enjoy the incredible benefits that Craigslist has to offer. For eight years, I occasionally used Craigslist for purchasing and selling electronics, furniture, appliances, tickets, cars, etc. But it wasn't until about ten months ago that I went from casual user to actually making my entire living buying and reselling goods on Craigslist.
This is my story.
Overcoming Fear of Craigslist
First, I need to get this off my chest: If your exposure to the world is only through newspapers and TV, you might be terrified of Craigslist. Most news stories about Craigslist involve theft, muggings, and other criminal mischief. In fact, often a story that might otherwise have been ignored becomes news solely because it involves Craigslist. Exposure to only negative stories about Craigslist robs you of a balanced perspective. (Need evidence? Scroll through the pages of news stories at news.google.com involving craigslist.)
In over a thousand interactions both buying and selling on craigslist, I've had counterfeit money passed to me once. I've had a few people not disclose minor issues with items that I bought. That's it. The rest were simply hundreds and hundreds of great transactions where both buyer and seller were satisfied. So from my perspective, being in the field, the image of Craigslist portrayed on the news is wholly inaccurate.
Craigslist users are doctors, teachers, coaches, business owners, students, neighbors, and students. In other words, people just like you. They're the people that live in your community. Don't allow others to stir up an undue fear of Craigslist that prevents you from enjoying its benefits.
Change the way you think about buying
When I started buying on Craigslist, I had to get past the stigma of buying things used. Friends would laugh when they learned that I'd purchased certain items secondhand instead of new. I have much more confidence now, having become very skilled at finding good deals. I usually buy things on average for 10% of the new price (sometimes more, sometimes less). I went from being embarrassed of my finds to proud of them, like a fisherman showing off his prized catch. Saving a huge percentage off the new price for an item that you need is a victory. I hate overpaying for anything.
Second, I shifted my approach. If I need to buy something, I try to find it on Craigslist first. Stores are convenient, and for certain items provide a great value. However, most things can be bought used, and depending on your commitment can save you thousands. I'm not going to give a formula for what you should and shouldn't buy from a store. That will depend on how strong your desire is to save your money.
Third, I've become more patient. When most people want something, they want it now and aren't willing to wait. So they pay full retail price. I used to be like this. Getting yourself to the place where being wise with your money is more important over having things now, will save you a lot of money in the long run. If you have to buy new, wait until it goes on sale and shop around. I love it when I find what I'm looking for used in like new condition on craigslist and I get it for a small fraction of the price. This takes patience and sometimes waiting a few weeks. I've been there and the reward is definitely worth the wait.
How to Save Thousands of Dollars
Want to save a fortune? Stop buying bleeding edge technology.
When Apple comes out with a new iPad, wait three or four months before you buy it used. Just be patient. You can usually get a product for at least 40% off the new price just a month or two after it's been released. For example, when the Samsung Galaxy Tab was first released, I really wanted one because it had a built-in 3g card and a camera. Verizon was selling them for $499 with a contract. I went on craigslist a month after they were released and bought one that had been used for less than a week. I paid $325 and have no contract. I use mine a lot for work, but if I would have waited six months, I've seen them lately for between $150-$200.
I've been buying little netbooks for $80-100 and have probably purchased ten of them this past year. That's about one-third of what they sell for new. Same goes for other laptop and desktop computers. Monitors you can usually find for about one-third of what they sell for new. Smaller monitors you can almost get for free — another proof that it pays to use slightly older technology.
Buy Your Next Car on Craigslist
Start buying your cars on craigslist (clean titles only). Instead of buying this year's model, buy last year's or the year before and save thousands of dollars on a basically new car. The thing that's great about Craigslist is that you can search from home without the high-pressure salesman telling you that you needed a brand new car two days ago.
Do your research beforehand. Buy high quality, highly rated cars. Check out Consumer Reports. Finally, don't buy the car before you pay the money for your mechanic to check it out first. It's the wisest $75 you could ever spend. Don't cut corners here.
Buy Your Appliances on Craigslist
Buying white appliances on craigslist is the way to go. They are far more common than black or stainless steel, and thus much less expensive. If one of your appliances goes out, you'll be able to find an exact replacement much quicker and cheaper if the appliance is white. I make most of my money on this principal alone. People are constantly getting rid of their really nice white appliances to “upgrade” to stainless steel. I buy their appliances for next to nothing and then resell them to their neighbor who is simply replacing a broken appliance.
I've bought year-old dishwashers for $25, nice smooth-top ranges for $75, and nice side-by-side refrigerators for as low as $60. I've purchased a stainless steel year-old side-by-side fridge for $150 and a three-year-old stainless built-in convection oven for $50. You can save massive amounts of money by buying your appliances on craigslist. I make most of my money buying and selling appliances. The prices you can get them for are sometimes mind blowing. I usually get appliances for 10-20% of the original price!
My wife's KitchenAid mixer died last winter. It was a newer model, but alas they don't make things like they used to! I started looking for an older model upon hearing that her mother had an older one that has been working for 15 years. Well, probably four months went by, but I finally found an older model in great condition for $40. It came with a meat grinder attachment with its box. Though it was quite used, we sold the meat grinder attachment on eBay for $28, and another extra part for $7. Final cost for the well-made mixer? Five bucks.
Finally, if an appliance goes out, it's often far cheaper to replace it with a used one on Craigslist instead of repairing. For example, if your washing machine breaks and needs to be repaired, you can easily find another one for $75, much less than it would cost to repair your current one. Then, drive your old washer to the scrap yard and get another $20-$25 for it in scrap metal.
Buy Your Furniture on Craigslist
Like appliances, people are constantly changing their furniture. Here again I would encourage you to buy very nice furniture that will last a long time. Besides saving loads of money, used leather furniture is usually broken in, certain pieces are already assembled, and often times older furniture is higher quality and made from real wood. It's best to ask beforehand questions like if it's been around smoke or pets if those things are important to you.
When Not to Buy on Craigslist
I love Craigslist, but I'll admit it's not great for everything. TVs are probably the most overpriced items on Craigslist. I'll often find people trying to sell their TVs for more than the current new price for the same make and model!
The new price of certain TVs can drop by hundreds of dollars a year. Often, someone who paid $800 for a TV last year will try to get $500-$600 for it used. The problem is you can probably find the same TV new for the same price or less — and it'll come with a warranty.
Dealnews.com is a good site for finding out the best prices for many items. Before you buy anything on Craigslist, find out how much it is going for new in stores and online.
When you start using Craigslist, keep track of how much you save on the items you purchase. The numbers won't lie. At the end of the year, add up your savings. Then imagine what would happen if your buying habits remained like this for 30 years.
Buying on Craigslist will not only help you save money, but for many will turn into another income stream. You could easily make a few hundred dollars a month buying and selling products you're familiar with. And with some hard work, an entire living can be made (from home) buying and selling on craigslist. (I'll write more about this in a future post, if you'd like.)
With another recession looming, unemployment continuing to rise, and wages flat, now's the time for people to change their purchasing habits. It's not unpatriotic to buy used instead of new from stores. You're greatly benefiting your neighbor who you are buying from (or selling to). A lot of times people are selling things they don't need. This is a quick way to inject money into our economy. One hundred percent of the proceeds go to real people. It's keeping the money in the community, in normal people's pockets.
Bargain Hunting With Mom
Aside of Craigslist, I still find good deals at garage sales too. Nowadays when my mom comes to visit during the summer, I love to take her out to the yard sales. We pick up a coffee and hit about 5-10 garage sales on a Friday or Saturday morning.
One of the first sales we hit this year was a good one. As we were walking up the driveway our eyes started dancing at the quality items on the tables before us. She settled in on the clothing and I ended up over a pile of contractor tools. I ended up buying three nail guns and my mother bought a sweater. As we were walking back out of the driveway I turned to my mom and told her that I was going to make $200 profit on the nail guns. (It ended up being a little over $200) “That's incredible.” she said shaking her head.
I think it's incredible that my mom has always seen the wisdom in buying things used. Her example was influential in my life. Words can be so hollow; we need examples. If I can help you save some money in the years to come, or I planted a seed for a new career path, thank my mom.