When you buy for resell, what percentage do you try to buy at?

[wdwfan]

I love a good conversation. So how about this one.

I know myself and most all of you love collecting cards, but I've also started buying to resell. So, my question is this: when you're buying to resell, what percentage of comps do you try and buy at? Is it based on years? Or liquidity? For instance, if it's a modern hot QB, will you pay more than say a vintage card? Of if you already know you have a buyer, will you pay a little more since you're not going to sit on it as long? If it's a hard card to move, or not rare, do you typically pay less? Do you factor in what you're going to do with the card i.e., grading, giving it to someone? Just genuinely curious.

[jchcollins]

Are you supposed to actually sell cards for more than you paid for them? LOL. I seem to barely stay afloat lately just selling covering PC purchases I should have stayed away from in the first place.

Oy, maybe 2025 will bring new hope.

[wdwfan]

Yes, there's tons of flippers in this hobby, especially when it comes to modern cards. Can't tell you how many times I've heard someone at the Dallas Show say ... "well I've got to get this for it because I paid this for it." Too many flippers.

Originally Posted by jchcollins

Are you supposed to actually sell cards for more than you paid for them? LOL. I seem to barely stay afloat lately just selling covering PC purchases I should have stayed away from in the first place.

Oy, maybe 2025 will bring new hope.

[swarmee]

Since I'm a regular flipper on COMC, I really don't buy anything I don't expect to sell for at least double. If I'm grading it myself, I expect the grading value to increase the cards value by at least triple the grading fee. $20 fee means card value has to grow at least $60 as a result.

[bnorth]

It varies greatly by the value of the card and how easy it is to resell. I have paid 90% before and turned down cards at 10% of value for reselling.

In general the cheaper the card the lower the percentage paid. The easier it is to sell the higher the percentage of value paid.

[raulus]

Originally Posted by bnorth

It varies greatly by the value of the card and how easy it is to resell. I have paid 90% before and turned down cards at 10% of value for reselling.

In general the cheaper the card the lower the percentage paid. The easier it is to sell the higher the percentage of value paid.

I'll vote for this answer.

For the most part, if I'm buying something with an eye towards selling it in the not too distant future, I'm probably buying oddball stuff that is hard to move. But I usually feel like I get it for a screaming deal, so I'm okay sitting on it for a while, until I can find the right buyer.

A few examples come to mind, just because we're having fun here.

A few years ago, I purchased a complete set of the 1968 Bazooka Complete Boxes, all graded and ready to go. Kept a couple for my PC, since they had my favorite players. Put the rest on eBay.

Immediately sold the Mantle piece, for an amount that equaled 100% of my cost to buy the complete set. I've been very slowly working to sell the rest. Most of them are still for sale, and could continue to sit. It's a thin market, and it probably doesn't help that I'm asking museum prices, but it's worked out just fine for me so far. My guess is that I'll end up with triple my original investment, maybe more if I ever sell off my PC pieces.

A few years ago, I purchased a complete set (minus the Mantle) of 1969 Globe Imports Checkerboard Back cards. Paid $500 for the set in raw form, and turned around and got them all graded for $20 apiece.

Since I already had one that was higher graded, I sold off the Mays for $3,000. Sold another one to a player collector on this board for $1,000. And I've been slowly selling off the rest, including some recent price reductions, which have helped to move them a lot faster. So far, my total sales are probably around $7,500. I'm guessing that I'll probably end up with around $15k in sales by the time I sell the last one off.

[darkhorse9]

Lately, when I walk through card shows and see the dealers (and buyers) who are clearly speculators with only the latest issues, rookies and autographs in their possession I think to myself, "yep, they'll be out of the hobby completely in three years."

[Rich Klein]

The "right" answer is,, what are you comfortable with?'

You can work on a tighter margin if you know/have a good understanding of how quickly you can sell an item than if you think you are going to hold it for a while

Coin dealers made a lot of money over the years buying deals on literally a 5 percent markup or less.

One secret to Alan Rosen's success was he was more of a "Flipper" and worked on a smaller margin than most of us were comfortable with.

We may talk about this on a future Dr. Beckett podcast but to give you an hint: I had a small group of 17 cards I purchased from a $1 box last weekend.

This was the result and understand these prices will be at the next show I set up at

so I got home this afternoon and decided using the OPG and COMC for those 2 cards not in the OPG to price what I had purchased

The results are -- all $5-8 cards I priced at $5 for my selling purposes

$1 3 Cards
$3 1 Card
$5 10 cards
$10 3 cards

This is a 5X BTW $86 of asking price for $17 cost

Not too bad. Also, sometimes I will do the break even to get a card into my inventory I kind of sort of like.

Rich

[Exhibitman]

OK, just to be clear, we are now putting on the big boy 'investor' pants: sentiment, collecting and emotions are out.

So many factors go into answering the question on how to price a deal for eventual resale. Some musings on the issue are all over my columns (see the link below in my signature line) and more will come in the future as I kick around the issue, but here are some appetizers:

Rarity (from "Bruce Lee Would Have Been A Great Card Investor"): "Market research is not just data mining prices. Understanding the context is everything. There are lots of databases with pricing information out there, so getting a rough idea of value can be pretty simple if the item is frequently transacted. You still have to account for eye appeal and the odd outlier sale, but you can get pretty close. For example, a 1954 Topps Hank Aaron sells hundreds of times a year (not rare, just demanded). You can get a pretty accurate real-time price on the card in any condition from any of dozens of data aggregating and scraping services. The art is understanding how the data fits on the rare or non-mainstream stuff. I recently needed to price a rare card that had not transacted in any tracked sale since 2014. I had the data, but it was meaningless because the card is so rare that the data is grossly out of date. If the data is meaningless, valuation is experiential. You must know enough to extrapolate from other sales of other cards, and that takes knowledge of how the market works generally."

Velocity aka Turnover (from "Whaddayagot?"): "The retail value on a 1976 Topps common may be $2 but it is a low demand card that will take a long time to sell at retail if it sells at all. The retail value of a PSA 7 1976 Topps Hank Aaron is about $80, but it is a high demand card that will sell readily, especially if I shave a bit off the price at a show. Given that reality, there is no way that I will trade you the Aaron for 40 of your commons, even if the retail values are similar. I might trade you the Aaron for 400 of your commons on the thought that it is worth the time and effort to price, list and carry $800 of retail value. I still must sell it all but I can risk grinding out a profit over time. The way it usually works is that there is an initial burst of activity (which I hope pays back the cost of the deal) and then a few sales a week trickle in as people build their sets. After I get my cash out with a decent profit, I will likely blow out the balance to finish the cash flow and create space for more inventory."

Trend-Chasing (from "Craps, Cards and Crappy Cards"): "In card investment terms, one of the most critical skills to develop is the ability to spot manias and trends. Like the surge in modern card prices from 2020-2022. The people who bought into modern product as it was surging were buying into the equivalent of a great craps run. They aren’t smarter than the rest of us (though they will shout out from every social media outlet that they are) they were chasing a roll. I know it is hard as hell to avoid it, but if you want to keep value in your card portfolio over the long term, if you want it to be a money-maker not a money pit, you must try to stay out of these trends, and if you go into them, have a clearly defined exit strategy and the discipline to implement it, or a huge loss tolerance. When there is a mania with rapidly surging prices, it is easy to look like a genius no matter how stupidly you buy because everything makes money when you sell and everything you have appreciates on paper. It is what happens when the table gets choppy that you need to understand."

I am continually at work trying to noodle out the secret formula for buying and selling, so there are undoubtedly more factors and more details to these. Every deal is different too. I will say that my bottom line on mundane deals is [cost of purchase + cost of sale] /3 = maximum price. If a card costs a buck and it costs me twenty cents to sell it on eBay, I won't pay more than forty cents for it. If it is a low velocity card, like a common, more like four cents. Bring me a nice, slabbed card and I will pay a higher percentage. The work is done, the value is pretty easily established, and I know where my price point has to be for a quick sale (turnover), so I can cut it closer.