It’s been a long time since our last blog post, in fact this is the first one this year and it’s already May!! But don’t think for a minute that trade2save has been in hibernation. We are very close now to launching a fabtastic new website – having overshot by about 9 months! My friends in the valley reassure us that a 9 month overshoot for a website of this scale is quite normal – well kind words I suppose, but back to the subject title…

We have looked very closely into the very high brow pricing tools that a number of sites are starting to use when buying products off of customers.

In some of my previous blogs I rant about poor trade-in prices given by online e commerce sites who are prepared to buy your used electronics for cash or trade-in value – See my previous posts about Best Buy and Sony (who both use ‘sophisticated pricing tools to get you the best possible price’ – ‘searching through thousands of prices for up to the second accuracy’) -

The marketing push for this service and also the success of buying-in trading portals like Gazelle (who’ll give you cash for your goods on the spot) show that there is a very large and lucrative market of not so savvy customers who won’t use eBay and flinch at the thought of opening their front door to a potential rapist who answered their ad on Craigslist to buy their used laptop.

These customers choose safety and convenience over squeezing every last buck out of their used digital camera – but boy are they paying through the nose for it!

One thing that unites what I like to call the rip off portals, is the use of so called sophisticated pricing tools. Basically what this means is getting a bot to trawl through sites like eBay and Amazon to get a price for what you’re selling, without them having to hire a team of pricing analysts who answer the phones or live chat with customers without needing to regularly update the prices on their database using standard demand and supply techniques.

The problem with these Bot pricing tools is that although they save trading portals a lot of money in terms of staffing, they are notoriously inaccurate.

To counter this problem, buying portals need to factor in a huge margin (in their favor naturally) – to prevent any inadvertent and costly mistakes the bot has gone and done.

Another issue is that they will never come close to any price a customer could get on eBay or Craigslist, so why bother trying? Why not tap into the market of the unsophisticated and blind them with technology, simplicity and cute little graphs showing a 6 month price index and forecast of the future price expectation (Why does the price graph always look the same?).

At the moment, unsavvy customers wanting to sell or trade-in their electronics can choose the difficulty of eBay or the simplicity of Best Buy, Sony or even Gazelle. I know which choice my mother would take, and this is precisely the market which is proving to be so lucrative – a suprising statistic given the state of everyone’s pockets today.

It’s not a very fair choice for people like my mum, but it’s a choice which they take willingly, in a complicated world, simplicity is the key for them – let others haggle on eBay for those extra bucks their laptop or cellphone might be worth.

Until, that is, they come across a simple, easy and sophisticated site which will actually give them an honest buck for their electronics. Watch this space…