The Endowment Effect
14 Apr 2021
Have you ever been stymied in your decluttering project by an item you couldn't sell? Are you always finding your unwanted stuff doesn't fetch as much as you feel it's worth?
Well it's not you, it's the Endowment Effect, and it affects everyone!
If you're interested in the Stoicism women's conference "Practical Paths to Flourishing" on June 5th (as mentioned at the start of the show), you can find out more info and book via the link below.
From Tara's blog:
- The number 1 reason people aren’t buying your second hand stuff
“You've watched the TV shows, read the books and seen the transformations when people finally let go of their clutter. You are ready for that same unburdening. You are ready to get that feeling of liberty. You have done the hard work, emptied the attic, scoured the garage and made all those agonising decisions about what items to part with, but just when the uncluttered life is within your grasp you can't quite make it happen- Why? Because your stuff just sits there on the sales pages with barely a view. You're offering up your precious wares to the world but no one want to buy them. What's the catch? Why is your stuff not selling when plenty of other stuff on the sales pages is getting snapped up? What is this invisible barrier sitting between you and the clutter-free life you dream of?” To read more click the link below.
APA -American Psychological Association: define it as the tendency of people to place a higher value on items once they own them or once these have been associated with the self in some other way. For example, an individual selling goods often prices them above what he or she would be willing to pay to acquire those same goods.
What does the endowment effect mean for you and your potential sales of unwanted items?
- It means that you’re carrying a bias you probably weren't even aware of which is causing you to overprice your stuff when trying to sell.
- And if you cant get the price you want then you choose to keep it rather than lowering the price or donating the item.
How can you prevent the endowment effect from hurting your sales/declutter efforts?
- Ask the question: “If I didn’t own this, what would I be willing to do or pay to acquire it in this exact condition?”
- Research what else is available in similar condition on the market?
- Research what it costs to get that same item new
- Appreciate that production prices of things come down greatly over time.
- Stop thinking about what you paid - start thinking about current market value
- Ask yourself why you don’t want it?
If you choose to keep an item instead of sell it because you can’t get what you want for it, ask yourself if it’s worth the cost of storing it? (financial, emotional, relationship).