You've watched the TV shows, read the books and seen the transformations when people finally let go of their clutter. You are ready for that same unburdening. You are ready to get that feeling of liberty. You have done the hard work, emptied the attic, scoured the garage and made all those agonising decisions about what items to part with, but just when the uncluttered life is within your grasp you cant quite make it happen- Why? Because your stuff just sits there on the sales pages with barely a bite. You're offering up your precious wares to the world but no one want to buy them. What's the catch? Why is your stuff not selling when plenty of other stuff on the sales pages is getting snapped up? What is this invisible barrier sitting between you and the clutter-free life you dream of?
It's called the endowment effect. And it's the number 1 reason that people aren't buying your second-hand stuff.
The American Psychology Association* defines the endowment effect as :
"The tendency of people to place a higher value on items once they own them..."
If you've been spending time on the sales pages, like Facebook Marketplace, Craigslist or Ebay (to name just a few of the abundant amount of second-hand sales sites) then you will have seen this in action: people over-pricing their used items. You've probably even thought to yourself a few times when looking at items to buy, "They've got to be kidding with that price. No-one will pay that much for a second-hand whatever-it-is..." You scoff, chuckle and keep scrolling. If you're familiar with the cult Australian movie The Castle (1997), it's a case of "Tell him he's dreaming." Watch the clip below if you're not familiar.
So how is the endowment effect showing up on your journey to a clutter-free life? It's a bias you probably don't even know you're carrying which is causing you to overprice the items you're trying to let go of. Now, hold on. Before you exit this page, read on. I know most people don't like being told their stuff isn't worth as much as they want for it - but, sadly, most of the time it's the reality.
When you purchase something you are investing in it. Money yes, but also time. Maybe you're even investing emotions like hope, sentimentality or aspiration into the item. When you've finally made that tough decision to let it go, you don't see a subjective view of what that object worth in its current condition at market value. You see the initial purchase price, plus the time invested, plus the emotions attached. The endowment effect is a filter on our vision, convincing us this item is worth more than it really is. Also, it feels much less wasteful if we can claw back some of that initial investment, especially if the item is hardly used. We can even go so far as to fooling ourselves into thinking that if we saw one exactly the same online at this price we would snap it up, but would we really? If we asked ourselves, what we would be willing to pay to reacquire one just like this if we didn't already own one, would it honestly be as high as the price you've listed it for?
So now that you're aware of this bias you're carrying, what can you do to stop it over-inflating the price you're asking for your items?
Here's my top 5 suggestions:
Ask the question: “If I didn’t own this, what would I be willing to do or pay to acquire it in this exact condition?” If you cant separate yourself from the bias ask someone else in the target market what they would reasonably pay.
Research what else is available in similar condition on the market and what it's priced at. Check the date of listing too, it may have been unsuccessful in attracting a buyer for sometime, which is an indication that it's overpriced also.
Research what it might cost to get that same item brand new. Many people would only consider second hand if it's dramatically cheaper than acquiring one new.
Forget about the price you paid for it. That figure is no longer relevant. The money you spent is a sunk cost- in other words the money was lost at the time of purchase. Anything you get for it now is a bonus.
Ask yourself: "Why don’t I want it anymore?" If it’s something that is timeless, selling shouldn’t be a problem at the right price but if it's something out of date or unfashionable then there will be less demand and that will push the price down even further.
When selling items online you need to accept that you are most likely not going to recoup what you paid or possibly anywhere near that. If you have the time and patience to experiment, you can try at your preferred price and gradually lower over time if it doesn't sell- you will find the right price eventually. Even if that price is 'free'. The key to successfully selling your used items is to be aware of the endowment effect and how it can fool you into thinking your stuff is worth more than it really is.
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