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Why Buy New?

16 December 2009 4 Comments

It’s amazing how easy it is to buy used stuff these days.  Whether you want a used boat, used car, a couch or a baby stroller, you can get it all used very easily and reliably.  For many items, it really doesn’t make much sense to buy new.  I think that our leaning to buy new is mostly driven from our American-consumerism mentality that we like bright, new, shiny things.  If we’re able to put that aside and focus on the numbers, focus on the need, etc. we will come to the conclusion that in many cases, we should buy new.

With that said, many Americans are buying used goods more than ever.  Because of over production based on ever increasing models of consumption, there is a glut of products out there.  This is killing the manufacturers because there isn’t much demand for new goods to be pumped out of our factories.  Hence, government programs like Cash 4 Clunkers in order to drive sales of new cars.

The accessibility through online portals like Amazon, Craigslist, eBay makes buying products from other sellers easier than ever.

I can’t imagine a much worse business to be in right now than selling new office furniture.  Many companies are going under.  The others are downsizing.  The result is alot of extra office furniture that isn’t needed.  Companies that are starting up can often find office furniture for free.  At worst, they can furnish a new office with a few hundred bucks over Craigslist.  Why the heck would you buy new office furniture right now?

The Larger Shift Happening

I think there’s a larger shift taking place that is indicative of an evolving American consumer.  We’re more thrifty now.  Before shelling out money on a big purchase, we’re going to shop around, and also compare the value we’re getting with the value we could get from a comparable used product.  While this will hurt some companies, this larger trend is a positive direction for America.

Government officials are doing everything possible to prevent this shift from occurring.  Why would they do that if it is positive for America?  Because it is positive long term for our economy.  Over the short term, it will result in pain because we’re structured for consumption.  A lack of consumption will result in continued high unemployment and a lack of economic growth.  I believe the pain is worth the restructuring that is necessary for long term prosperity.  Do you believe it is worth it?

As I like to say, help yourself, not the economy.  Buy used.  Even if it hurts the economy.

What products have you bought recently that are used?  Why did you choose to go used vs. new?  Did you use an online site such as craigslist?

4 Comments »

  • Clayton said:

    Competition is the best thing for business, the consumer wins and you get rid of businesses that don't need to be there. By not letting competition decide who wins and loses you get a market that has too many producers and not enough buyers. You hit it right on the head people are going to find the good deals and that's exactly what they should do. good post.

  • 20smoney (author) said:

    Amen. Resource allocation via the free market. Not by the supreme leaders in d.c.

  • Wojciech Kulicki said:

    The immediate pain might be bad, but I think this trend is more sustainable long-term. Let's think about it this way:

    – Right now you buy 2 new things, costing you $600.
    – If you buy 4 used things instead, they also cost you $600.

    You're still spending $600!

    I think the one factor that will determine how much companies are going to hurt is how long people KEEP their products now. If you're keeping stuff around for, let's say, 3 years, and suddenly (via good care or by virtue of buying and re-selling used) you're keeping it for 9 years, companies are robbed of 66% of their income.

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