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Your Friend the Secondary Market – Part 1

Ahh, shopping. For some it is a relaxing past time. For others, it might as well be Dante’s tenth circle of Hell. For the savvy shopper, shopping can be both fun and stressful. It’s a good time when we exercise our wit and get a great deal on something. At the same time, trying to determine if we are getting a good deal can be stressful and difficult.

When we go to the store, or log on to your favorite online shopping website, we usually only consider a few basic factors when deciding what to purchase. Of course, at the top of that list is price. If we can find a better price somewhere else, we are more than likely going to spend our money elsewhere. We also consider convenience. Is the shopping experience easy? If I purchase something online, do I have to pay for shipping or is that cost wrapped up into the total cost? If purchasing online, am I willing to wait days, even weeks, to receive my merchandise? Usually we are willing to pay a little more if purchasing from that vendor is more convenient.

Another factor that many don’t consider but should is the existence of secondary markets. Secondary markets are just what they sound like, a secondary place to buy what you want. These are epitomized (unfortunately) by the used car dealership. A market that sells goods that have already been used. Of course, purchasing items on a secondary market means there are even more factors for a shopper to consider when deciding upon a purchase, but ultimately, they provide additional value to new items you purchase and they let you buy items at a discount. Today we will look at one way to use secondary markets to your advantage and in a later post, we will look at a second way to utilize secondary markets advantageously.

The first, and perhaps best way of using a secondary market is to avoid losing money instantly. Everyone knows the age-old saying when buying a new car: the second you drive it off the lot, expect its value to nose-dive. Unfortunately, this is true; it is perhaps the greatest disappearing act in the world of finance (excepting the stock market; that can lose your money faster than anything else). The mere act of taking a new item and turning it into a used item by a simple purchase depletes its value. For new car buyers this is bad news, for someone willing to consider purchasing a used car, this provides an opportunity. Why take that financial hit if you don’t need to? Let someone else suffer those economic losses and buy a used car that will not decrease (as fast) in value.

This theory holds true for other items as well. Used goods simply are more cheap to purchase. So, next time you need a new something, take a look at eBay, Amazon Marketplace, or Craigslist before heading to the local department store. You will probably find it’s easy to find what you need and at a much better price.

What do you think readers? How have your experiences with secondary markets saved you money?

Article publié pour la première fois le 31/07/2013

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