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Online auctions change the way we buy and use

By CECIL JOHNSON, Jan. 15, 2006

If you think putting out $700 for a stroller is foolish extravagance, think again, says Web entrepreneur Daniel Nissanoff in his new book “Futureshop.”

Nissanoff says buying such an expensive stroller makes perfect sense. He points out that celebrities such as Gwyneth Paltrow and Madonna pay as much as $2,800 for Silver Cross Balmoral strollers, an exclusive brand that has become a status symbol on Manhattan’s Upper East Side.

But Nissanoff is not arguing that a middle-class family should pony up $700 for a stroller just to show off, when it could probably buy a serviceable plastic one for $12.99. Here’s what he says:

“Buying a new stroller for $700 is a good deal. A liquid secondhand stroller market means that your child is safe and happy in a stroller that you’re proud to push, and then, when the harness is too snug, you can sell it for about $550 on eBay. It will have cost you about the same as if you had bought a mediocre stroller to begin with. Even a black Silver Cross Balmoral goes for about $1,950 on eBay, saving one lucky parent hundreds of dollars,” Nissanoff writes.

The stroller is only one of scores of examples the author provides to drive home the point that consumers today are increasingly shedding their “accumulation” culture mind-set and are moving toward an “auction” culture mind-set.

He means that consumers are buying more things with a plan to use and resell them while they still have value instead of keeping them until they can only be trashed or donated.

For the most part, eBay and some of its Web competitors are driving that trend, Nissanoff says.

But despite the success of eBay, which in less than a dozen years has evolved from a small experimental auction to an international behemoth, it has not nearly reached its potential.

eBay and most of the other auction sites are too difficult for most people to use. But the number of facilitators such as drop shops, where one takes items to be traded, is rapidly increasing, he says.

Those facilitators take care of the photographing, shipping and other details of the process for a percentage of the sale. And they also eliminate the need for communication between sellers or traders and bidders.

Nissanoff is the founder of Portero, an online facilitator that specializes in luxury goods.

As improvements continue to enhance the liquidity and security of trading and selling used goods online, Nissanoff says, the auction culture will assume the proportions of a consumer revolution that will totally transform the retail marketplace.

He sees the creation of a cycle in which sales of new goods will increase by virtue of the buyers of quality used goods becoming attached to various brands. The other part of the cycle sees sellers of used goods using their recouped value to offset some of the cost of buying new ones.

Continuing technological advances and product innovations will boost that cycle, Nissanoff suggests.

Nissanoff spies a blossoming of entrepreneurial possibilities and jobs, as new services arise for the evolving secondary market. He also sees businesses providing staffing and developing competencies for managing the secondary market for their products.

“Those that do will keep counterfeiters at bay by guaranteeing authenticity, and will thus gain the trust and loyalty of their clientele, increase their profits, have a firm grasp on what their sales figures really mean, and be adept at understanding the competition,” Nissanoff writes.

“Futureshop” reviews the history of the various forms the secondary market has taken from medieval times to the present as a platform for projecting its future. The book is a good read from that perspective, as well as for the practical advice it offers. It would be a good investment to buy it — new or used.

How the New Auction Culture Will Revolutionize the Way We Buy, Sell, and Get the Things We REALLY Want

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