There are many reasons as to why we engage in sharing of goods. Reasons may include underutilisation of the product as it would only be used for a seasonal period of time. In addition, we may not want to accumulate too many unnecessary items. Also, it presents to us an economic opportunity to make profit out of valuable items we already have at home
The emergence of online marketplaces have encouraged people to start sharing and selling their pre-loved goods. Although there is an issue of the quality and durability of shared goods, people are more willing to share and purchase items that are of less value compared to items that are priced higher.
For example, people are usually more willing to purchase secondhand clothes, shoes and household items compared to buying secondhand mobile phones and televisions. This is because the retail price of clothing is significantly cheaper than that of mobile phones. Since these items do not take up a significantly proportion of our income, we are more likely to trust and purchase from online marketplaces. In the case of buying secondhand mobile phones and other electronic gadgets, the price may be still high if phone is kept in decent condition. We would thus want to ensure that the phone is working in good condition by testing it out at physical retail stores.
There is also a social stigma when it comes to purchasing secondhand items. Generally we would prefer purchasing something brand new in its original state because we can only then be sure of the product's quality. Apart from the issue of quality, we typically shun away from purchasing secondhand goods due to concerns about our social image. Buying something that has been used by someone else may also imply that we are not able to afford the good at its original price. However, this may not always be the case.
People may choose to purchase secondhand goods because these goods get better in time. These may include boots, leather goods, cast-iron skillets and musical instruments. For example, cast-iron cookware develops a non-sticky surface that allows one to fry, bake or stew without the ingredients sticking to the pot. In such cases, these secondhand goods may be priced even higher than its original retail price due to its improved quality over time.
This model can be efficient as it would reduce the wastage of resources. Take for example the amount of textbooks a student needs to purchase throughout the school year. Our usage of these textbooks are seasonal - we would probably only use it during the semester. When the school term ends, these textbooks would accumulate and not only waste space, but also results in wastage of resources when we decide to throw them out. Thus, instead of purchasing new textbooks directly from retail stores, students usually prefer to buy secondhand textbooks from their seniors or on websites that allows the resale of textbooks. In comparison to the retail price of textbooks, secondhand books can be up to half its retail price. In addition, a book with notes and workings written on its pages is usually preferred to over new books (since we are given more resources and insights!). Apart from purchasing secondhand textbooks, students can also trade different textbooks with each other during the semester.
Hence, shared goods is generally welcomed in society due to its environmental benefits and practicality. It is usually more successful in small local communities through peer-to-peer and business-to-peer transactions as items are usually valued less. In terms of business-to-business transactions, sharing of goods may not be more regulation to ensure that there are certain guidelines to follow when exchanging or renting goods between businesses.
References:
https://www.pwc.com/us/en/technology/publications/assets/pwc-consumer-intelligence-series-the-sharing-economy.pdf
https://www.researchgate.net/publication/255698095_The_Sharing_Economy_Why_People_Participate_in_Collaborative_Consumption
http://ask.metafilter.com/136636/What-items-get-better-with-use
http://www.columbiatribune.com/arts_life/community/cast-iron-gets-better-with-age/article_f7adda56-2e48-52e3-b720-4fddab25986c.html
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