About 6 months or so ago my neighbor told me that he wanted to get rid of a weight set that was taking up space in his garage. He had purchased this about 9 months before that and had probably paid in the neighborhood of $600-700 for everything. I asked him how much he wanted for it and he said, "Oh, just give me $200 for it". I did and thought it was a pretty good deal. Back to the present. I’ve decided to get rid of it since I haven’t been using it much. I listed the package on Craigslist for $295 and people came out of the woodwork to buy it. It should be sold by the end of the day today. (Someone is coming to get it at 3:00 today after the previous buyer fell through). My first thought was that I priced it too cheap but I’m happy to get rid of it and turn a nice profit.
That brings me to my question. Should I feel guilty for "flipping" this weight set and making almost a $100 profit? Should I consider splitting the profit with my neighbor? Or should I just think, "He got it out of his garage and was happy to get $200 for it so I should consider us even".
What would you do?
Update: I told him what I got for it but didn’t offer to split it. He commented that he would have probably given it away in the first place just to get it out of the garage.
you are talking about two arms length transactions. you owe your neighbor nothing.
if someone is asking 5K for a car you know you could sell to someone else for $7500, would you feel obligated to split the profit with the other guy?
it is arbitrage and capitalism at work.
Thanks Ryan. I pretty much agree with you. The only complicating factor, in my mind, is that it’s a friend and neighbor.
I’d probably split it with him. I guess my reasoning is that a friendship isn’t worth losing over $50.
I guess to flip it around, would you be irked if the situation was reversed and he made $100 off you?
He set the price in the original transaction. You paid what he thought it was worth. That transaction is done, your profit is irrelevant on the secondary transaction. If you make money trading a stock to you feel bad for the people you purchased it from?
Why not just have him over for BBQ and some beers on you . . . then you get some profit and BBQ/beer.
Why does your neighbor even need to know how much you sold it for?
Good question TO.
I happened to make the mistake of mentioning that I put it up on Craigslist so I’m not sure if he knows or not……
I don’t think there’s any clear answer here. You could argue convincingly either way. You just have to follow your gut. The very fact that you blogged on this topic tells me that it’s nagging at you. If you think you’re not going to sleep well at night unless you split the money with your neighbor (or you’re going to feel awkward hanging out with your neighbor until you set the record straight), then you should do it. Life’s too short for unnecessary awkwardness, and good neighbor’s are hard to come by.
I don’t think there’s any clear answer here. You could argue convincingly either way. You just have to follow your gut. The very fact that you blogged on this topic tells me that it’s nagging at you. If you think you’re not going to sleep well at night unless you split the money with your neighbor (or you’re going to feel awkward hanging out with your neighbor until you set the record straight), then you should do it. Life’s too short for unnecessary awkwardness, and good neighbors are hard to come by.
Another thought, since this is a friend. Question is how good a friend? Usually, I’m like business is business, but if it is a really good friend might you consider giving him the whole $95, or all of your profit. I mean he’s out ~$400 and you would be out $0. Just a thought.
Thanks for the comment Trip.
I have never really entertained giving him all of the profit because part of the reason that he sold it to me cheap was because he didn’t want to deal with the hassle of trying to sell it. It was very easy for him to just say, “get it out of here”. When I decided to sell it, I had to take the initiative and deal with the hassles of people flaking out, coordinating time to see it etc. so I think that entitles me to some, if not all, of the profit.
At this point I’m actually leaning towards keeping the cash. I wouldn’t expect him to give me any of the profit if the situation was reversed.
You don’t owe your friend anything. You did not have any intention of flipping when you bought it.
If you feel guilty, (especially if you feel you got a low price because of your friendship)then buy him a dinner or something. You have already given him more by giving him an education….next time sell on Craiglist!
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I would have gone the route of having him and his family over for BBQ and beer. Most of my friends seem to be the sort that would be OK with that. It would have to be something serious not to be able to laugh about it over a beer. (actually most of my friends would probably be happy for me to get that much!
).
[...] sells some gym equipment, and then faces a moral dilema. Keep the cash, [...]