Did the value of secondhands change?

[bos]

I've been thinking about how secondhand items have become more expensive over the years. This trend wasn't just a feeling. I decided to look at my own numbers. My secondhand account is almost 20 years old, which means I started it in my teens.

As a kid, my "job" was buying electronics from wealthy kids secondhand and reselling them. When I got older, I did the same by flipping motorcycles. Since I joined the working force I don't flip anymore, but do continue to buy second hands where possible. However, about four years ago, things started to change. The good deals began to dry up, and people started "overpaying". For example, I bought a new sleeping bag for €200 during an end-of-season sale (50% off) and later sold it secondhand for €320 after using it daily for six weeks on vacation The person could have bought the item, with 2 years of warranty for only 80 euro more, with an high change of the item being in sale again soon.

I think two factors contribute to this. First, secondhand in general has become much more popular. I remember my parents and friends used to found it odd that I bought items secondhand. They were curious about how it worked and whether I ever got robbed or scammed. Nowadays, there are advertisements for "vintage clothing" right on my street, and these items are worth more than new fast-fashion pieces.

Second, environmental awareness has increased. Even my parents have changed. They recently bought a secondhand table for environmental reasons. This shift has for sure affected the value. Which is a good thing!

Jacob once mentioned that secondhand items are getting closer to their true price. Is that what's happening? Were secondhand items always undervalued? How do you guys experience this?

[zbigi]

I don't think second hand items were ever seriously undervalued in Poland. Polish society was just too poor and too thrifty for irrationally low prices to go unnoticed (and not corrected by the market). Maybe one of the reason of rising prices of used goods in the West is pauperization of society, particularly the young adults (who are also most likely to adopt new trends, such as buying used)?

[loutfard]

Two more possible factors:
- optimising a closing information gap. One used to have to make a real effort. Information technology has made second hand arbitrage more accessible, so less profitable.
- ERE/FIRE mindset taking root? Probably wishful thinking...

[ertyu]

Nah, it's not an ere mindset, it's the first thing you pointed out, loutfard. resellers that make it their business to dig out good finds causing the second hand stores themselves to go, wait a second, we could be sorting these goods into tiers and charging that. The arbitrage gap is closing on both ends due to increased info and business savvy.

[Henry]

On-line shopping changes the game. Hollywood Chic ends the game.

https://www.cnbc.com/2024/05/29/benefit ... stone.html

[7Wannabe5]

Yes, I've definitely noticed this. OTOH, it's become easier to find a new pair of jeans on the clearance rack for $4 at the same super-store where you might simultaneously be paying $8 for a jumbo pack of toilet paper. I remember BRUTE making the point once that a cheap textile is a cheap textile, and what we arbitrarily designate a throw-away can be oddly culturally determined. For nth degree example, the extent to which we do not depreciate our education and training as an asset when we retire or semi-retire "early" due to our cultural belief in personal freedom. Or maybe this is more in my mind at the moment due to the fact that I recently spent approximately the cost of an okay mid-grade used car to purchase myself a new grad degree at the age of 59.

[bos]

- optimising a closing information gap. One used to have to make a real effort. Information technology has made second hand arbitrage more

This is a great observation that I missed. Platforms show sellers what the item is worth. If you upload an Iphone it shows that Iphone's are usually sold between X and Y. As Ertyu highlights; Data closes the gap for both sides, which is a bad thing if you are good at making deals.

[jacob]

The secondhand market is definitely becoming more efficient.

It's not just that there's more information about what the price should be but that the logistics infrastructure has been put in place to make it easy to move goods. There are basically more rent-seeking entrepreneurs and businesses who have inserted themselves between the ultimate seller and the ultimate buyer.

It used to be that a local thrift store took a small profit from the $0 that the donator got resulting in the buyer ending up with most of the "profit" by getting good stuff very inexpensively. Today, this profit is often split between several resellers, arbitragers, marketplaces, shipping companies, ...

The result is that not only is secondhand getting more expensive. There's also less $0 supply available.

Overall, this is actually a good thing since it means that stuff is being put to good use and less money is lost in the process of ownership.

[Henry]

I just learned that the outside clothing bins you tear your rotator cuff trying to stuff hefty bags stuffed with old clothing are privately owned and operated by companies euphemistically called clothing recyclers. They bail the clothes up and sell them by weight. Sometimes overseas.

[Frita]

As thrifting is becoming more trendy and economically attractive, prices have risen. Buying for life as @Jacob says makes even more sense.

About an hour ago my son informed me that my favorite leggings wear like a diaper. Until involuntarily retiring, I never wore such clothing. My preferred fit is between a legging and sweatpants. I am actually glad to have bought the two pairs I did, for about $100 total. (Not washing after every wear, using cold water, and line drying; they wear like iron.)

[bos]

I just learned that the outside clothing bins you tear your rotator cuff trying to stuff hefty bags stuffed with old clothing are privately owned and operated by companies euphemistically called clothing recyclers. They bail the clothes up and sell them by weight. Sometimes overseas.

My friend's dad has a successful business selling and buying vintage clothing. He became wealthy in recent years ago when 90s Nike and Adidas shirts became more valuable than new ones. He acquired most of the shirts for 0.50 cent per kilo and has been storing them for almost 30 years. A quality 90s vintage sport shirt can sell for 40 euros here.

Buying for life as @Jacob says makes even more sense.

Do we maintain an ERE list of buy-it-for-life approved brands? I have the feeling as soon as those brands get populair as "buy-it-for-life" they move production overseas and drop quality. Looking at you Carhartt and Redwing. My Carhartt jeans from 7 years ago look fine while my new ones have a hole in less then 6 months.

[jacob]

Do we maintain an ERE list of buy-it-for-life approved brands? I have the feeling as soon as those brands get populair as "buy-it-for-life" they move production overseas and drop quality. Looking at you Carhartt and Redwing. My Carhartt jeans from 7 years ago look fine while my new ones have a hole in less then 6 months.

I'm not aware that we have a list and you're right about what happens to brands once they get discovered by the public. I've gone back and forth on this over the years in terms of whether the BIFL the best of the best or whether to buy the cheapest option possible and treating it as as expendable/consumable. In practice, I do both. My main objective is to avoid "upgrade-fever" in which I'd want to buy a slightly better model in a short time and so on. The "best" is already at the top. The "worst" is already at the bottom.

The alternative to BIFL is to get good at the secondhand/reselling game treating everything as something you "rent" until you sell it again. While easier than ever, selling secondhand still takes effort and time depending on how much money you want to recover.

[ducknald_don]

I've noticed for clothes that quality doesn't seem to vary much once you get above the bottom tier. I could buy a pair of jeans for £15 and they won't last very long at all or a good pair for £30. It seems there is nothing to be gained for spending more than that other than a label (or a tear in the knee).

[Sclass]

I think there are several drivers here. Most you guys have hit. Efficient online marketplaces are good for pricing. Pauperization of society. Changing attitudes towards vintage both from an environmental and quality view.

I have a personal take I can contribute. Cost of new tech has gone down.

I design new versions of old tech and I can grind the prices down by replacing old chips with new ones. I made a small business making replacement parts for old cars using new tech. It’s cheaper for me to make modern digital electronics than it is for Mercedes Benz to keep manufacturing vintage analog electronic parts for their old cars. New processes are just cheaper.

I have a lot of advantages all of which come from using 2020 tech over 1980 tech. I was able to arbitrage this discrepancy to dominate a corner of the replacement parts market. I basically compete against little kids in Bangladesh hand soldering analog op amps to through hole circuit boards. They need precision resistors and capacitors to obtain nominal filter frequencies. I just use a 2020 $0.50 microcontroller running a mathematical formula which is just code to produce the same output using a kind of digital synthesis. I don’t require precision manufactured components or calibration because the math is always the same. Cheap chip + code trumps 1980s tech. Assembled by a robot in Shenzen without Bangladeshi child labor. I’ve crushed the refurb market for this particular device. The clients would be crazy to buy refurbs though some collectors insist on keeping their vintage Mercedes 100% vintage.

[chris580]

I believe another factor may be the major tech gatekeepers such as Amazon, Google, EBay etc. changing their policies to favor certain second hand vendors over others, leading to fewer vendors. I looked into online reselling in the not too distant past and many long-time vendors were complaining about this. I could see why the gatekeeps would do it; they believe can better control the quality (and hence their reputation), limit the number of sellers (driving up prices and possibly manipulating the availability of products for various marketing purposes), and extract more money from their approved vendors.

I feel like I, the consumer, have lost out from this limited gatekeeper market, and I also feel like my entrepreneurial opportunities have been limited so the gatekeepers can make more billions for their AI spam projects.

[ertyu]

Just bought a pair of very lightly used xeros on a second hand app. Second hand apps, it seems, have quietly adopted adaptive pricing. I have a history of searching for shoes of this brand and paid $X for a similar pair of shoes before, so now the price im quoted is $X + n. Next time I will probably see $X + 2n and so on until I cry uncle. I did pay the X + n but it seems a change of strategy when it comes to acquiring second hand goods might be in order from now on. What that strategy is, of course, is location-dependent. The tldr is, I wouldn't trust an online marketplace farther than I can throw it.

[FieDollar]

If you told me that the gap had narrowed I would certainly believe it.

[purple]

One other observation -

For some items the rate of Price New / Utility has become so wacky that buying new makes no sense. Think about all the tech. I recently learnt that flagship phones cost around $1500. This is insane! It makes no sense whatsoever to buy such item new. Either one would go about buying a non-flagship or you would stick to buying used / old model, etc.

This removes the gap between new and old because it becomes more like Wacky New and Reasonably Old/Used. More people are going for the latter item...

There is now a whole group of entrepreneurs figuring out how to buy Wacky New things at cheaper price and then resell them as Reasonably Old but still make a profit.

[Ego]

It depends on what you mean by second-hand. If you mean purchasing something from a second-hand marketplace, then yes, it is more expensive. The marketplaces have become more efficient and more people are willing to buy second-hand because it doesn't feel all that much different from buying something new. Search, click, and poof... it is delivered.

If, on the other hand, you mean sourcing second-hand stuff from discards, then no. There is way more discarded stuff than ever. It can be had for free or nearly nothing.

What's changed is people's willingness to be seen digging through the trash or shopping at the poorer, grimier second-hand places. People are more easily embarrassed. They care what others think and refuse to be seen sinking that low. The rare person who willingly goes that low is either an immigrant who does so out of necessity or the person who does so conspicuously by adopting second-hand as a style. Generally, the former do not know what the online shoppers value and the later only want things that are vintage and appear second-hand. The amount of discarded stuff that is valuable but not cool vintage style is bottomless if you know where to look and are willing to go there.

[7Wannabe5]

If, on the other hand, you mean sourcing second-hand stuff from discards, then no. There is way more discarded stuff than ever. It can be had for free or nearly nothing.

Yes, this is also very true. Especially if you are able to generalize the discards market at systems level and understand the conditions under which "waste" is created. For example, data is often a waste product of 21st century business which the discard workers known as data analysts attempt to salvage and promote to the level of information. OTOH, as a used/rare book dealer, I was often engaged in rescuing artifacts of knowledge. As a math tutor to underprivileged children, I was engaged in the sort of reclamation work addressed in an old non-profit commercial with the line, "A mind is a terrible thing to waste." Doing permaculture on vacant lots. Dating middle-aged men. The perspective and practice of an operator in the discard market can be applied quite extensively, although with more or less success likely with outcome.

What's changed is people's willingness to be seen digging through the trash or shopping at the poorer, grimier second-hand places. People are more easily embarrassed. They care what others think and refuse to be seen sinking that low.

This may be true, but I think it is more a reflection of the overwhelming tendency in our culture/economy to find yourself stuck or regressed at the level of Optimization. Most often in terms of $/hr, but also frequently in terms of marginal life-energy/attention. I think I know more people who are embarrassed about the non-virtue signal attached to sometimes not going to the bother of recycling the paneer pizza box than people who are embarrassed about an outing to the $1 Goodwill Store next to the cheap/good ethnic bakery. However, what passes as cultural capital does vary, sometimes significantly, and any edge at which a significant difference such as this is found would also constitute an opportunity for the discard operator.