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Comment by aashay | Hacker News Reader

This looks really neat, but I've got some comments/questions:

* Typo when trying to set up a sale of a Late 2010 MacBook air: Choose your product's "condtion"

* Where do the prices come from? Are they competitive with other trading sites? For example, a "MacAir 13' Late2010 1.86GHZ 2GB RAM 128 Flash" in "Good" condition goes for $407 on Gazelle, but h3750 ($375?) on Swapidy. However, Gazelle does give me the option to include my power adapter and specify that I have a working battery.

* Why honey? Why not real money?

Edit: Formatting

Edit2: Clarity

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I'm also curious about the choice of virtual currency.

From perusing their FAQ, it seems like you can buy Honey with real money, but it doesn't look like you can get your money back out. Ick.

At the moment, we're not offering redemption of Honey but we may consider it in the future. The value you're getting of selling your product over market value and buying under wouldn't require you to ever take out money anyway.

Also, if your product is worth as much as a product we're selling, you won't have to pay a single dime.

-Adam

> The value you're getting of selling your product over market value and buying under wouldn't require you to ever take out money anyway.

This is only true if the difference between the sold item and bought item(s) is small. If the seller is looking to offload a macbook but only to buy an iPad a cash transaction would make significantly more sense. In this system the difference in values is tied up in honey which has no value outside of the system. With cash the seller can apply their remaining funds to anything they want.

I would imagine that even though the "value" of honey supplied to sellers is more than what they might be able to obtain in a cash transaction that extra honey is actually worth next to nothing as it sits in the sellers account unused.

Another downside is that your money is tied up in a company that could fail.

In the event that Swapidy goes under, there's no guarantee that you could get all your money out safely.

I think Swapidy is a great idea -- a dynamically-priced, peer-driven marketplace sounds awesome. But the currency lock-in seems very sketchy.

Totally understandable. However, that scenario is highly unlikely.

Your currency is always worth that amount and will never change in value.

Unless like the parent said, you go out of business. In that case the honey is worth $0 because it's virtual currency. It's also not highly unlikely as most new businesses fail.

Think about it this way... A lot of people try to sell their iPhone 4S's or 4's when the new model came out. So what did they do? They went to eBay, Amazon, Craigslist, Gazelle, etc. to sell it. Once sold, they used the money to pay for it plus the difference.

Think of that whole experience done on one site... Swapidy. You sell your stuff to us, get paid instantly, and buy whatever you want right away.

As for the remaining balance goes. New products come out all the time and more often that not, you will purchase a new product in the future, right? You can use that currency that was left over to buy the next best thing whenever it comes out. And better yet, we will always be updating our product lines. So there will always be something new to buy.

So think of it as savings in your bank that's used for something else down the road. The value is never going anywhere... it always stays the same ($1 = 10 Honey).

Let me know if you have any other clarifications I can make.

-Adam

I'm not confused about how your product works, virtual currency systems are great for the vendor but the lock into the marketplace carries risks and downsides for the consumers using the marketplace.

> New products come out all the time and more often that not, you will purchase a new product in the future, right?

That's assuming a lot. New products come out all the time, however I have no guarantees that your marketplace will have another product that I want at any time. If I have a balance of honey I'm taking a risk that I will find continued utility in your marketplace. That same risk doesn't exist if I sell or trade my goods for real currency instead of virtual currency.

> So think of it as savings in your bank that's used for something else down the road. The value is never going anywhere... it always stays the same ($1 = 10 Honey).

It's nothing like savings in a bank. My bank pays me interest and allows me to withdraw money at any time for any purpose. Converting money, or my used goods, to honey locks me into your ecosystem and has a significantly smaller value to me in utility and opportunity cost than actual cash. Additionally, if my bank goes out of business my deposits are insured by the FDIC. If swapidy goes out of business the honey evaporates into thin air and it's just a loss.

1) Thanks, will fix that!

2) The prices are generated based on current market value and are changed constantly. In most cases, our offer will be higher than most sites because we pay in virtual currency. That gives us the ability to offer you more value. It really depends on what the current demand is like.

3) With Honey, we can offer you more unlike cash where there is more up front overhead.

Did that answer your questions?

-Adam

Why does using virtual vs. real currency affect your ability to dynamically adjust prices?

Great question! We have the power to offer you more because our up front overhead (cash) is minimal.

Right now, the aim is to provide huge value to the customer by buying new and then eventually the inventory that we gather up with used products, will be available too for less than market value. We can do this because acquisition costs are low.

Does that answer your question?

-Adam

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