Your car is not worth $5000

Sent by Jonathan Stark on September 2nd, 2018

How do you figure out what your car is worth?

Your first answer might be “Look it up in Kelley Blue Book” but you’d be wrong. KBB doesn’t tell you what your car is worth. It tells you how much you can probably get for it.

This might sound like semantic nonsense, but there’s an important difference.

The issue is this:

Saying something like, “I looked it up and my car is worth $5000,” presents the value as a property of the car, when in fact it’s not a property of the car - it’s a probability.

In other words, what Kelley Blue Book is saying is that statistically speaking it’s likely that you can find someone to give you $5000 for your car.

This is very different than saying things like:

These things are objectively true. They are properties of the car. it would be pretty hard to find someone who would disagree with you about these facts.

Where people get into trouble is when they present value as an objectively true fact about a thing, ala:

It may be true that you would easily find someone who would be happy to pay you $5000 for your car, but that doesn’t mean that the car is objectively worth $5000.

Lots of people would NOT agree to give you $5000 for your car because it’s not worth that much to them. Value is not an objective property of a product or service. It is a subjective perception that exists only in people’s heads.

You can see this disconnect play out any day of the week at used book stores and pawn shops and jewelry exchanges and car dealers and so on.

It goes something like this:

A customer comes in to sell a item which they value highly to a dealer who doesn’t value it highly. The buyer makes an offer that the seller finds insultingly low. The seller reacts indignantly, makes an unconvincing case, and then either gives up and takes the money or storms out red faced.

What’s going on here?

Two different people who each have a different value for the thing in their head.

Again:

Value is a subjective mental perception, not an objective property of a thing.

Why does this matter, you ask?

It matters because I see people do the same thing when selling their time and/or labor. It goes like this:

Buyer: “What’s your rate for web design?” Seller: “$150 per hour.” Buyer: “That’s ridiculous! I’ll give you $25 per hour.” Seller: (reacts indignantly) “But my time is worth $150 per hour!!!” Buyer: “Not to me it isn’t.” Seller: (storms out, submits story to Clients From Hell, and spends the next two days basking in the ensuing commiseration in the comment threads)

Moral of the story:

If the leads you’ve been getting don’t value what you sell, figure out how to get better leads OR sell something else.

Yours,

—J  


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