Finding deals on craigslist – UCB Statistics Project

April 21, 2012

General

College student paying and being paid by craigslist users
Buying under market price and selling above? You better know the true market price

Have you ever bought something used and naively underpriced on craigslist or eBay with the intention of using it for a bit, then just turning around to sell it at the market price for a bit of extra change? When living on a college budget, this process can be just what you need to justify buying some extra toys here and there – it’s not like you’re throwing money out the window, you’re making an educated investment in something you’ll flip later on, banking on making some kind of return.. right?

With relative success, I practiced this strategy throughout my four years at Cal, flipping everything from couches to air conditioners. The hardest part I found was truly being able to identify a good deal.

Buying Used – What Makes for a Deal?

A deal must be marked down enough that the possible profit margin would be worth the risk. Unlike the stock market where billions of dollars are spent analyzing securities in an attempt to find even the smallest profit margins, the second hand goods market has been left relatively untouched.

Unfortunately, people’s old “stuff” varies in quality, isn’t very liquid, and comes with inherent risks due to defects and, in my case, damaging college mishaps. This causes competition to be much less fierce and the market to be much less efficient. Because of this lack of efficiency, there are opportunities for these much higher margins.. again, only if you can pick the right deals.

function combine($ucBerkeleyStatistics, $craigslist) { … return($profitableDeals); }

By senior year I was fed up of wasting so much time browsing craigslist trying to narrow down and pinpoint an item’s market price. Especially because if there weren’t very many ads actually for or relating to what I was looking for then the chance of me misjudging the price, making a bad deal, and losing money would increase.

So, for my Linear Modeling statistics class I decided to focus on this dilemma for my final project. With enough of the College Statistics Price Analysis on Used Goodsright data, tools, and analysis these deals could be a lot easier to spot and could seriously improve the profitability of buying, using, and flipping things.

I’ll share the progress, results, and any neat discoveries made via this blog. So for all you craigslist fanatics and eBay Powersellers, feel free to follow along and contribute requests and/or suggestions!

Next up, I’ll post the promising and powerful capabilities the the project entails.

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By John Freier

John graduated from UC Berkeley with a degree in Statistics and received his Certificate of Entrepreneurship from the Industrial Engineering and Operations Research Department. During his senior year he focused on analyzing the prices of goods on online marketplaces. Following graduation, John founded and created Statricks, as a resource to help buyers and sellers save and make more money.

View all posts by John Freier

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