I doubt very much that sellers would appreciate this liquidity "service" if it were spelled out for them. They would feel cheated, as would the buyers.

There is nothing to "spell out" for the sellers since nobody knows at what max price an item will sell. When the original seller sets a price, they are balancing their need to move the item with how much they think they can get. When the arbitrageur buys an item they are offering immediate liquidity and accept not only the item but the risk that they will not be able to move it at a profit (or break even). Liquidity and transferring risk away from original sellers is the value this offers to the CL community.

Does it matter at all that buyers and sellers ought to have that choice, to determine whether this really is a value to them?

If liquidity and risk transfer is such a value, wouldn't you want this service-for-sale to be clearly visible to all?

This is my theory: If a person doing this were clearly distinguishable on Craigslist from regular individual sellers (and buyers) a great number would be swayed away from doing business with him. I think most people on Craigslist see it as the lubricant between buyers and sellers, intended precisely to replace middlemen like him. I think his ability to sell that liquidity and risk-transfer for profit would depend on his ability to blend in.

You might reasonably argue that I'm wrong. But if you do, then not only would you not object if (in a hypothetical universe) we were to clearly and involuntarily distinguish dealers and Craigslist profit-makers like him from the regular buyers and sellers, but you would see it as beneficial to him.

Note that eBay provides this sort of distinction, in the form of feedback history (someone who's got feedback from 100s or 1000s of transactions is probably making money at it), and people generally prefer to deal with the dealers and middle-men (in part because dealers have more to lose if they rip someone off and get bad feedback).

[edited to clarify wording slighty]

Feedback histories show that eBay dealers are active users with the greatest number of transactions, and that those with the longest histories are successful because they continue to conduct themselves well. But it doesn't say much of anything about whether individual buyers or sellers anywhere (but especially Craigslist) would prefer to transact with dealers rather than other pedestrian users when given those choices.

But most of all: Amazon and eBay are themselves middlemen. They take a cut. Every time you buy or sell, a cut goes to support the platform you used to find and buy or sell. Active dealers with more transactions give more support to those sites. If you like using them you're probably okay with those dealers.

Craigslist doesn't take a cut (outside of certain job postings in certain big cities). It's a community platform for individuals. Dealers profit only themselves, contribute nothing to support the site, and offer little if any dubious "value" with their interference. This is not exotic knowledge for users of Craigslist.

Let me put a personal spin on this to explain it better.

3 years ago I was broke and bought stuff on craig's list, (specifically camera equipment) and sold it on eBay and held some and sold it on craig's list later. I negotiated hard on the phone and only bought stuff far below market value.

I only sold stuff for far above market value and I ended up with an extra $300 a month or so which was a huge difference in my lifestyle.

I noticed something with the sellers I dealt with. Most were wealthy, or made very good incomes and just wanted to get rid of the item. They didn't want to deal with a bunch of buyers, they wanted someone who would give them cash fast in a straight forward transaction. That is the "service" I did for them.

Buyers wanted the item, but wanted someone who would tell them it worked, and back it up, provide good photos and description etc.

--- Fast forward 3 years and I make enough money that when I buy and sell stuff on craig's list I am primarily interested in a fast, easy transaction where I'm saving money over the new price, but not concerned about getting an extra $20 out of it.

I basically changed places and I am happy that middlemen are able to provide me with fast, easy transactions.

--- One tip too. To get the absolute best deals put up WANTED ads on specific items. I bought stuff for ridiculously low prices that way. 60% off the mean. And you don't have to be the first to respond to the ad. A lot of people search for the item they are about to sell before they post it and when they see your WANTED ad, you provide the service they want and they are happy to get less than the item is worth.

I know when I moved out of my last apartment, I sold my washing machine for a couple hundred dollars less than I could have made, because it needed to be gone by the end of the week. I don't have storage, I don't want to keep something that size sitting around my new apartment. I totally understand and appreciate what we're both getting out of the deal.

People rarely feel ripped off buying goods from retail stores, even though everybody knows that retail stores just buy goods for less money than what they charge and make their profit based on that difference.

Not exactly. Retail stores make their profit by buying in bulk and selling individually. Their service is dividing up large orders.

Sure. The point being that people can understand, at least on a basic level, that sort of obscure and indirect service.

This guy's service could be described as dealing with random craigslist sellers for you, who can be quite a hassle if you get unlucky.

Given how many utter flakes I've experienced when selling (or even giving away!) stuff on Craigslist, I think liquidity here actually has tremendous value.

And unlike modern stock trading, not all Craigslist listings are created equally. He seems to be doing the dirty work that sellers don't want to bother with. Besides, everyone knows that if you want get paid a reasonable value, you put something on eBay, but that's too much hassle for these sellers.

That is why he is able to make more on appliances which can really only be bought and sold on craig's list.