
A recent study out of Washington State University indicates that online entrepreneurs may be able to generate quick sales by hyping what they’re offering, but it comes at a cost.
The study, coauthored by Chase Potter, assistant professor of accounting, and Zhonghua Zhang, a doctoral student in accounting, analyzed more than 2,100 online business listings sold on Flippa, a popular peer-to-peer platform for buying and selling digital assets such as e-commerce stores, content websites, and software-as-a-service businesses, according to a release.
The researchers found listings containing what advertisers call puffery – hyperbolic or overstated language used to emphasize positive aspects without providing factual evidence – sold about 12% faster but for an average negotiated price that was 66% lower than listings without such claims.
“It’s a trade-off,” Zhang said in a statement. “If your goal is to sell quickly, puffery can help. But if you’re trying to get the best price, exaggerating your claims might work against you.”
The study found that experienced “super sellers,” those with multiple successful listings and recognition badges, used more puffery than first-time sellers. Researchers said those sellers’ experience may have shown them how to use puffery more effectively, though the benefit still only brings faster rather than more profitable sales.