The Psychology of the Trade Up

I get asked the same question all the time by friends, family, readers and pretty much everyone else I talk to about trading up.  The question is “Why would someone trade you something that is worth more than what you are trading them?”.  When you think about it, it’s a reasonable question.  Why would they make the trade? I mean they could sell the item and get more money than what your item is worth, right?

Yes, they absolutely can, but they won’t. I’ll explain.

Do you think the person is going to spend the time listing their item on Craigslist for sale, responding to a bunch of tire kickers and fending off all the asshole scammers? Let me answer that one for you, no.

Here is a bad analogy of the mentality behind making a trade down.  Do you find it easier to spend money on a credit card than it is to pay cash for something? Why is that? With cash we are actually handing something over and physically getting less back.  With a credit card you just swipe it and go on your way.  Less painful, right?  See what I mean?

Now, with bartering it’s kind of the same thing.  The person is getting what they want without having to pay anything for it.  It’s less painful that way.  Sure your item might be worth more money than theirs is, but at the end of the day it’s not costing them a penny to get what they want.  See where this makes sense?  You don’t know the situation the person is currently in when you are going to make a trade.  Maybe their wife just yelled at them to get rid of that snowmobile and you are helping them out because she’s wanted an iPad 2, but they don’t have the money to buy it.   So you trade them your iPad 2 worth about $400 for their snowmobile worth $1,000 and both parties are happy. If you’re thinking to yourself “yeah right, that would never happen” you are dead wrong.

To wrap things up, people by nature want immediate gratification.  If they want something they want it now. So if that means trading something that they never use to get it, they’ll do it.  It won’t matter to them that they paid $1,500 for that item 3 years ago and now they are only getting something worth $400.  They aren’t looking to sell your item or trade it up.  They are looking to actually use your item.

So the next time someone asks you this same question feel free to point them to this article.  That’s what I’m going to do from now on.

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Leave A Reply (6 comments so far)

  1. James
    1703 days ago

    I like this post it really helped me understand the trade up perspective. I think the iPad for a snowmobile was a little unreasonable, but the rest of the article was dead on. I personally haven’t tried to trade up something before, but if the opportunity presented itself I would.

  2. Giselli Garcia
    1703 days ago

    You make such a valid point! I recently traded my itouch with a friend for a pair of shoes I really admired. Ever since I’ve gotten my iphone I really had no use for the itouch anymore. Even though my ipod was worth way more than these shoes, I traded anyway because 1. I don’t use it anymore and 2. I really wanted those shoes! It sounds silly when you think about it but it sure does feel less painless when you’re getting exactly what you want and are going to actually put to use.

  3. The way to
    1693 days ago

    As I business owner I think the information here is actually real superb, thanks for your efforts.

  4. Dan
    1693 days ago

    Thanks, I’ve been searching for info about this subject matter for ages and yours is the best I have found so far.

  5. Sean
    1693 days ago

    @Dan Thanks for the positive feedback. I’m glad I was finally able to fill the need! I’ve got more tricks up my sleeve so stay tuned!

  6. Beth H.
    1692 days ago

    Your article has some of the best content I’ve read on this topic lately. You¯re viewpoints are really right on in my opinion. Thank you. Keep up the good work.

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"Sean helped me get started and make my first trade. He really went above and beyond to make sure I understood every step of the process. Thanks again, Sean!" -Tyler L Orlando, FL

"I honestly didn't think trading up was possible. Sean said to email him if I had any questions so I figured I might as well. He not only convinced me how possible it is he walked me through step by step until I made my first trade up. I am so happy I found this blog and emailed Sean." -Dave R. Raleigh, NC