

Bootstrapping a startup with Craigslist arbitrage - danecjensen
http://cam.ly/danesblog/2011/01/craigslist-arbitrage/

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randall
I appreciate the post, but in the end it just isn't that useful. It's like "I
did all this stuff to sell MacBooks and didn't really make any money, so I
started this startup."

Obviously you can't do it for long if you're not making coin, but either a
more in-depth analysis of how many you sold for what prices, or any success /
fail stories, would make this a more useful post for readers. Instead it's all
the build-up of an objective study with no real payoff.

Hopefully this comes across as a useful critique and not something that's
personally attacking. I like the idea, I just want something more out of a
post like this.

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orangecat
_Find a deal with the data and intuition on Craigslist. Then, meet in person
and barter at least $50 off the asking price._

You mean, agree to $X over email and then demand it for $X-50 when you meet in
person? That's really, really tacky.

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fleitz
He said 'asking' price.

What he is saying is that the person is offering $X and when he arrives in
person he counters with $X-50. (Probably more like offering $X-100 so you get
a counter at $X-50).

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Psyonic
Right... but if you agree to the price over the phone, don't negotiate in
person. It's a dick move. If I'm selling my TV for $250, you agree to that, I
drive to meet you and you low-ball me for $200, I hate you. It's that simple.

~~~
rwhitman
Rule #1: Never drive to meet someone if you're the seller. Let them come to
you. If they can't, someone else will.

Half of people on CL are flakes or cheapskates, you have to assume they will
either never show up or lowball you

~~~
jemfinch
Hah! Like I'm going to give my address out to people.

I meet people in a public place: Starbucks, a grocery store, McDonalds, etc.

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NyxWulf
Properly speaking, this is not arbitrage. There are two criteria for
arbitrage, it has to be riskless and self-financing. Looking at an item and
saying, I should be able to sell that for more is not an arbitrage. If you
were able to locate a buyer willing to pay a certain price prior to purchasing
the item, and then buy an under priced item and sell it to your buyer for more
money, that would be arbitrage. Arbitrage is a sexy three dollar word that
people like to throw around, but if you are risking loss in order to hopefully
make a profit, then plain and simple it is not arbitrage.

~~~
tansey
He's doing statistical arbitrage.

~~~
NyxWulf
What basis are you using for saying this is StatArb? Typically that involve
hundreds or thousands of equities where you can use the laws of large numbers
to your advantage. Buying one item that is below the average price of
something and "hoping" you can sell it for more just doesn't strike me as any
type of real arbitrage.

~~~
djb_hackernews
StatArb has no dependency on equities. This is arbitration, Arbitration
between two markets, his local craigslist market and the rest of the online
market. There is no hoping, hes priced the item in one market and it is above
the price of another, that is pure arbitrage.

~~~
minimax
Arbitration does not mean what you think it does.

~~~
djb_hackernews
s/arbitration/arbitrage/g my bad.

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colanderman
> Here’s an interesting graph from the data that proves the price difference
> increases with price: [followed by a graph of nearly random data]

Drawing a straight line through loosely correlated data doesn't "prove"
anything.

> I didn’t do Craigslist arbitrage for long because it was not worth my time
> and effort.

So a more appropriate title for this post would have been "Failing to
bootstrap a startup with Craigslist arbitrage"?

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chime
> For example it quickly became apparent that a unibody Macbook was worth more
> than one that wasn’t a unibody.

Then that's just another variable. Not intuition like the author claims.
Intuition would be in recognizing the important variables.

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bretthopper
He posts a math formula, a fancy graph, and even the Python script but barely
mentions the end result.

I would have loved to know how many he actually bought, sold, and for what
profit.

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bdickason
Slightly unrelated to the blogpost, but how do your cameras work in low light
settings? I'm looking into a similar system for a business my wife and I run.

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huntergdavis
I wrote a (fairly) successful e-book on this topic, freely available over at
my site.

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p90x
the word is "bargain" not "barter".

