The Yard Sale Principle: How Individual Value Changes The Art Of The Ask
When I was a kid in Rhode Island, every Sunday there would be yard sales throughout the neighborhood. The most common item you could find would be something like a baby stroller that was slightly used or clothes the family had outgrown. What was always interesting to me were the yard sales where comic books were sold because, every once in a while, if you were really lucky, you could find a mint edition of something that was worth way more than the person was charging for it and for a lot less than you’d have paid at the comic book shop.
This was my first introduction to the concept of value as it relates to price.
The comic book may be worth $20 if the seller sold it at a convention but, to the guy down the street, it was an item taking up space and he wanted it gone so he was willing to sell it for a dollar. Obviously, I was getting a pretty good deal because he didn’t value the comic as much as I did. In fact, I could even tell him what it was worth, and he’d tell me that he’d rather not deal with the hassle of going to a convention or store in order to sell it at that price. So I was able to get something valuable for less because the value of that item was a lot more to me than it was to him.
This same principle holds true in the case of most transactions: there is always one person who values the item more than the other and that dynamic governs the exchange.
Knowing this can be incredibly powerful when it comes to raising money, putting together a partnership, or making a sale. It’s important to take the time to either research or study how much the other side values the thing that you need.
For example, if you are raising $100 for a project and you ask someone who spends $100 on lunch everyday to donate the full amount there would be significantly less friction than if you ask someone who is working to stretch $100 over a whole week.
Alternatively, let’s say someone has a famous painting that once belonged to your late grandmother and it’s really important to you that you buy it back. Chances are you’d be more willing to stretch your budget than you would be if they just had a reproduction of the painting.
If the person you’re interacting with values the thing you need – be it money, resources, connections, etc. – less than you do it will be an easier transaction.
So the next time you are about to raise money, start a partnership, or make a sale, remember the Yard Sale Principle: people who have a surplus and don’t value that surplus are easier to work with and will give you a better deal.
Every relationship has a “yard sale,” you just have to take the time to look for it.
Excelsior!
