Economic Wisdom to Apply in Your Twenties

Chapter 28

Chapter 3, Section 9 Going to the second-hand market to search for "treasures"

The second-hand market first appeared in Europe in the 19th century, and it has another name called "flea market".Composed of small stalls, the market size varies.Most of the goods sold are second-hand goods, people's surplus items, and unused but outdated clothing.From small decorations on clothes, to complete old cars, TV sets, and digital cameras, everything is available, and the price is low.With the development of information technology, the second-hand market has also developed rapidly, and online second-hand commodity trading has become an important part of online commodity trading.

Second-hand commodity trading is generally welcomed by customers for its convenience, cheapness and practicality. "Only choose the right one, not the expensive one" has also become the most attractive advertising slogan in many second-hand markets.

Young people in their twenties are mostly born in the 20s. They are highly personalized. We love fashion and novelty. Whenever new products are launched, whether it is the latest clothes, bags, mobile phones, cameras, MP80, etc. For digital products, "fashionable people" always rush to buy the hottest new products, and the old products that have been eliminated can be put on the second-hand market and sold to other consumers who are only willing to pay low prices.In today's society, the updating speed of commodities is getting faster and faster, which further promotes the prosperity of the second-hand trading market.

From an economic point of view, the formation of the second-hand market is due to the "law of diminishing marginal utility" in economics.

"The law of diminishing marginal utility" (the law of diminishing returns) is one of the basic laws of microeconomics.The "utility" here refers to the psychological feelings of consumers. "Margin" means "increased, extra".Consuming a certain item is actually a kind of stimulation, which makes people feel satisfied or have a certain psychological reaction.When consuming a certain item, the stimulus at the beginning must be great, and the degree of satisfaction of people is high.However, when the same item is continuously consumed, that is, the same stimulus is repeated, the degree of psychological excitement or satisfaction of people will inevitably decrease.In other words, as the amount of consumption increases, the utility continues to accumulate, and the increase in utility brought about by the newly increased consumption becomes increasingly negligible.That is to say, the marginal utility of every new product you buy is always decreasing after you buy it back.

We all know that the price of a new product is calculated according to cost + profit + shipping cost, however, the price of a second-hand product mainly depends on its marginal benefit to the seller.Generally speaking, second-hand goods are in the stage of diminishing marginal utility for the seller. Maybe he has too many such or similar goods, so he will sell them at a lower price than when he bought them. So second-hand goods are much cheaper than new ones.

The prospect of the second-hand market is very broad, and it is an important supplement to the primary circulation market.The existence of the second-hand market is the reuse of economic resources, making the best use of items with use value or part of use value.Some replaced commodities have not lost their use value. Discarding is a waste, and sending them to the second-hand market for recirculation is a good use.

Second-hand transactions can benefit both buyers and sellers, and people can get more choices in the second-hand market.In fact, many second-hand items are almost as effective as new ones, but the price is much cheaper.Such as furniture, electrical appliances, books, CDs, etc., you can find all kinds of them in the second-hand market at low prices, and what you lose is only the feeling of using new products.

Nowadays, "Taobao" in the second-hand market is not only promoted as a consumption behavior, but also forms a life attitude and life wisdom.Especially after the financial crisis, going to the second-hand market to Taobao has become a good choice during the economic downturn.

For young people in their twenties, compared with the crowded second-hand market in the real world, the online second-hand trading community in the virtual space is more popular.Through the online second-hand market, we can quickly browse the products we want to buy, including pictures and detailed text introductions. At the same time, we can easily compare the market prices of similar products through the Internet, which greatly saves time.In addition, there are many private-to-private transactions in the online second-hand market. The second-hand goods sold by individuals are not changed hands by middlemen, so the prices are relatively low.

Of course, we're not suggesting that you spend a ton of time on the second-hand market.After all, compared to your precious time, in many cases buying new goods is more economical than flipping around in the second-hand market, especially if you plan to buy long-term use items.Instead, wise economists encourage twenty-somethings to consider the potential cost savings of using second-hand goods without being forced to give up too much on something like consumer satisfaction.If there is such an opportunity, don't miss it, it will allow you to use your limited purchasing power to bring the greatest utility.

Wisdom Pieces: The Origin of the Flea Market
Flea market, in English is FleaMarket.There are two sources of FleaMarket: one is that FleaMarket originally originated from FlyMarket in New York. FlyMarket is a fixed market in Manhattan, New York. The word Fly comes from the Dutch name Vly or Vlie of this market, which means in Dutch "Valley", coincidentally, its pronunciation in Dutch is exactly the same as Flea in English, so it forms the FleaMarket in English.Another way of saying is that FleaMarket comes from Paris and is a place in Paris that specializes in selling bargains.People half-jokingly say that the junk goods in the market are probably infested with fleas, hence the name of the market. FleaMarket first appeared in English in the 20s, referring to an informal market often held on weekends.

Today, flea markets have little to do with fleas, but the name has stuck.

(End of this chapter)