FC NOW: The Fast Company Weblog
July 28, 2005
Get Used to It
The New York Times article on used books is interesting. As a buyer of books, both used and new, from Amazon or mom and pops stores, I can tell you that I usually buy a used book when it is something I am only mildly interested in and wouldn't have bought new.
This notion, making use of an opportunity to acquire something cheaply or for free because your interest isn't enough to warrant a full purchase, can be extended to many mediums. I believe this is the reasoning behind bootleg DVDs, illegal downloads, and the eBay craze. When the film industry says they lost out on billions of dollars in sales, they are assuming these people would've bought the film legitimately for a $20 pricetag. They probably wouldn't have. But a bootleg DVD at $5 to $10 is an impulse buy.
Businesses should use this tendency toward cheap goods for their advantage. Most companies would benefit form offering a cheaper alternative to their standard product or service. They probably believe sales of the lesser alternative would hurt their profit. I have been at a store with the opportunity to buy a new or used video game and went with the newer copy because the $5 savings wasn't enough. The opportunity for a used product created the sale of a new product.
What do you purchase used? What do you not?
Posted by Kevin Ohannessian at July 28, 2005 1:04 PM | Category: sales + marketing |
3 Comments
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I buy used business books frequently. Typically I will buy a used biz book after reading it was used as source material in a new biz book I bought. No sense paying $19.95 for a two-year old book at the book store when I can buy a new/used one for $3.00 on Amazon.
At least half of the used books i buy are out of print. For that half of the purchases, it is not a pricing issue.
Thanks
I think that the idea of lower marginal interest fueling used material sales hits the nail on the head although the idea is not new. It has been the driving force behind reduced price sales in retail, garage sales, etc, and is probably explained in every B-school econ course. As price decreases, demand increases - and only when price decreases below the marginal value of the item will the sale occur.
I also agree that industry is counting the "lost" sales wrongly. Surely some of the used or bootleg purchases would do come at the expense of legitimate sales, but I think that most come only because of the price reduction.