Startup offering $5 textbook trading forgets arbitrageurs exist

Very interesting analysis. Thank you.

The biggest problem I see with the business model is finding an exact match. As you have noted correctly, what are the chances of someone else having the exact book I need and needing the exact book I have? The only solution seems to be for this website acting as an information warehouse where it matches A with B, B with C and C with A so that there can be more complex arrangements of shipping and receiving. And then it becomes, simply, a store dealing with used books where buying price - selling price always equals to $5 (+shipping cost).

I'm afraid I did not understand the "depreciation" part well. Is it the money value difference between when you buy the book new vs when you sell the book used? Because there is one more kind of "value" to be considered here, which is pretty much binary. A student can either use the old book (in which case it is worth the full value of the book to them) or cannot use the old book (in which case it is worth nothing). If nobody can use the old book (e.g. in case there is a on-time code for homework or something), then you cannot even sell this book to a used bookstore. The value depreciates to nil as soon as the course is over.

/r/badeconomics Thread