What's more important, Supply or Demand?

[mintacular]

Originally Posted by hcv123

Not so simple a question or answer, but both are relevant.

1) Textbook economics teaches that Price is determined where supply meets demand. Further there is a concept of "elasticity" of either that looks at the affect on price of a specific item or commodity based on changes in supply or demand. In other words how significantly does price change in response to a spike or decrease in supply or demand. ( To illustrate - In the case of a 1/1 A potential seller can try to "hold out" for any price he wants as he is the only one with the supply - if there are multiple potential buyers they likely know they are competing for a single in supply and the one who is willing to pay the most sets the price. If that 1/1 has no one that cares or wants it - the seller then must entice people by dropping his price as there is no demand and hopes to reach a point where someone will pay him for it) - very oversimplified, but hope it helps.

2) Some factors that are variables that come into play in our hobby world that in theory factor in to the above, but can cause significant variation are; 1) Current owners of cards I would argue have a wide range of prices paid and therefore more or less of a tolerance to sell at a higher or lower price. 2) inefficiency of markets/arbitrage/perceived supply and demand - best by example perhaps - I participate in numerous auctions across a handful of categories - just yesterday I was in a coin and jewelry auction - there was a Rolex watch that sold for $6700 against a house defined $8300-$10600 estimate. Was that a good price? I'm sure the buyer thought it was. A simple google search showed that I could buy the same watch in the same condition from 3 different vendors for about $5600. This is the definition of what I mean by inefficiency of markets. A potential buyer almost always is clueless about the availability of the item they want in all places where it is possibly available - which information would give them the ability to find the best price. There is also a time value and of course the desire factor which are other variables.

Probably already said too much. At the end of the day - buy what you enjoy!

Thank you for this, very insightful

[Mike D.]

If it was all supply, wouldn’t all these 1/1’s being produced today all be worth big bucks? Some stars are, but an awful lot of lesser known are dirt cheap.

[JollyElm]

When i think of supply and demand with baseball cards, my thoughts immediately turn to the 1973 Topps #615 Mike Schmidt rookie card. It's part of the high series, so the number of copies 'should' be limited, but check ebay any time, night or day, and there are too many cards available to count. Check the sold listings, and the numbers continually grow. Many sales are completed day after day (and this is an expensive card whether it's graded or not). Supply truly isn't low at all, but the demand (probably due to it being the key to the 1973 set) has always been through the roof. Take from this whatever you may.

[brian1961]

Darren, you're right-on with the example you give us. Mike Schmidt is one of the most beloved baseball players of all time, with an extra-strong (large) collector base. Gum card collectors relish rookies like no other, and even though Schmidty's is a 3 on 1 design, as they all were that year, that is his rookie, and the gum card bandwagon want it real bad. I'm sincerely glad for them the card may be easily had. Instant gratification, even though the card, as you mention, is not cheap.

Please, I have nothing strong against gum cards. Growing up as a kid, I would not have had much of a collection without them. I'll leave it at that, as I've already expressed my strong inclinations to pursue other items after I entered the growing adult hobby in 1972. However, while I was especially drawn to the regional / food and Topps test issues, I also was finally able to see and buy some 1952 Topps, both 1934 Goudey Lou Gehrigs, and a mass of different Ted Williams gum cards. I loved them all, but simply regarded as extra special the regional / food, and in particular among the Topps test their 1969 Super Baseball.

--- Brian Powell

[mrmopar]

It would seem that the 1/1 example could potentially settle the argument, at least in the small confined of the world of sports collectibles.

Every player in a set has a 1/1 card made of them, all equally scarce in supply. However, the price for each will be determined by the players popularity (or perceived potential). Lacking any real demand otherwise, any given common 1/1 card with no interest or potential might sell or even sit unsold for under $10. Well below what you have to pay for almost any copy of the previously mentioned 73 Topps Schmidt rookie card with possibly millions of copies to choose from, but great demand.

I guess anything could be wiped out value wise if enough supply was to be introduced though. Unrealistic examples, but interesting to consider. Would the discovery of 1 billion previously unknown, mint Schmidt rookies make this card equal to a Von Joshua card from the same set eventually? How many newly discovered T206 Wagner cards would it take to make it just another "common" T206 HOF card and not the holy grail of cards?

[brian1961]

Supply and demand are both important; however, demand trumps supply in the long run. There are other very important considerations, of course, when determining the extent of "demand".

If we are talking about a particular set or a player, how many collectors collect the set or the player? If there's substantial number of collectors for that set or player, then we turn to supply. Within supply comes the matter of examining the number of examples for each grade. One of the key factors with the demand will be how beautiful was the set's design and for a player, how does his card look---stunning, amazing, breathtaking OR humdrum, raunchy, or flat-out ugly.

The brother that mentioned the addition of having an enthralling story to go with the set, and therefore a player from the set, is thinking wisely and offers striking examples that back his claim of its importance.

Distilling all of this, when you have a set or player that collectors love, and the supply of high-end graded examples are few, or the supply of collector-grade examples seem to take months and months to locate, the price point will keep rising.

Many regional / food cards and team-issue items are sleepers, for their supply is disturbingly low; however, the far majority of collectors seem to gravitate to the tried and true gum cards. Their design is usually appealing; their availability is easy to locate; and they don't have to think too hard or deeply whether or not they're worth collecting.

Whereas, the attractive regional / food items, with their built-in scarcity, rarity, and a paucity of a pop report, often seem over-looked and under-appreciated, for the collector bandwagon does not enjoy having to think for themselves, work hard at researching, and works even less still at tracking down the elusive.

Then again, the little secret is that the few collectors who long ago got their gum card fix, and then decided to launch out and go after better game or white whales, entering the narrow path full of obstacles to get to the gorgeous, tough-to-get regional / food cards would prefer, and I mean adamantly, that the gum card collectors who constitute the far majority of today's collector base, would just remain happy and content with their gummies----FOR THEY DON'T WANT ANY MORE COMPETITION FOR THOSE ITEMS; LIFE'S TOUGH ENOUGH COLLECTING THE BLUE DIAMOND REGIONALS!!!

Just some "food for thought"......

Oh yes, since other companies are forbidden to release regional / food cards today, and have been so for decades, that is why the current legal sport card makers have produced their manufactured rarities, or "chase cards", to replicate in their own way the original, all natural chase cards---those same aforementioned difficult to get regional / food items----tough to get back in the day; often tougher to get today.

Supply or demand. I say both, but mention demand first.

Stay safe. Drive carefully, as many seem to have had their driving skills affected by the Coronavirus and its accompanying fear factor.

--- Brian Powell