While making a sweeping statement about such business models not working, I guess the op failed to take notice of Gazelle.com, which has been in operation for 3

While making a sweeping statement about such business models not working, I guess the op failed to take notice of Gazelle.com, which has been in operation for 3 years now, has raised $46.4M in total with the last round being a series D of $22M. And guess what their business model is, arbitrage on used electronic products. So safe to say, such models can and do work. I also believe that these models will increasingly become more mainstream, because they save people 'time', time which is increasingly becoming the most precious resource that we have. You save 2 hours of time for someone, and pay him $40-50 dollars less than craiglist or ebay, and I am sure you can find a large percentage of people for whom the opportunity cost of 1 hours is more than $20-25, and voila, you have customers.