Sunk Costs in the Hobby Video

[Johnny630]

Originally Posted by Pat R

But it's relevant to them and the conversation especially if the customer made some kind of counter offer.

If a dealer over paid for an item he shouldn't expect a future buyer to do the same. I can't be responsible or feel sympathy for what a dealer paid.
Idk just my thoughts

[Leon]

Originally Posted by Johnny630

If a dealer over paid for an item he shouldn't expect a future buyer to do the same. I can't be responsible or feel sympathy for what a dealer paid.
Idk just my thoughts

What I have into a card is my business. When someone asks me what I paid for a card, I have for sale, I tell them $1.

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[Johnny630]

Originally Posted by Leon

What I have into a card is my business. When someone asks me what I paid for a card, I have for sale, I tell them $1.

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Leon, You'd be surprised how many times dealers tell me what they have into a card as a reason for their asking price. I never ask them what they paid I just ask what's your number, that's it.

[Leon]

Originally Posted by Johnny630

Leon, You'd be surprised how many times dealers tell me what they have into a card as a reason for their asking price. I never ask them what they paid I just ask what's your number, that's it.

Don't get me wrong, I do base my price on cost but that isn't anyone's business but mine. And yes, dealers can tell you what they have into a card but is that always the right amount?
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[Johnny630]

Originally Posted by Leon

Don't get me wrong, I do base my price on cost but that isn't anyone's business but mine. And yes, dealers can tell you what they have into a card but is that always the right amount?
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I agree it is your business I'm with you. Do they always tell you the right amount? Maybe maybe not, don't care. That's why it's irrelevant to me, just tell me a price. That's it. Lol

[Republicaninmass]

I was once told it was "impossible" to sell something for less than you paid... by a government employee.

I quickly determined They have a lot to learn about the real world!

[mrreality68]

interesting video but also dealing without alot of variables in the videos examples.
For example everyone is right as a buyer we do not care what the seller pays and if they make money or not
But in his example where that seller was offered $100 and the seller said but 3 months ago I have $150 into it he said the seller should just sell it at a loss and move on.
That is an option but if the seller does not "need to" sell it then he can decline the offer and wait to see if he/she gets better offers or can hold it until the market value goes up and sell it at that point.

[Exhibitman]

Originally Posted by mrreality68

if the seller does not "need to" sell it then he can decline the offer and wait to see if he/she gets better offers or can hold it until the market value goes up and sell it at that point.

+1. When someone tells me I 'need' to see a card for a specific price my answer is that the only person who gets to tell me I 'need' to do something is my wife, and she says it plenty.

[Exhibitman]

Originally Posted by Republicaninmass

I was once told it was "impossible" to sell something for less than you paid... by a government employee.

I quickly determined They have a lot to learn about the real world!

I guess they never had to realize losses in a portfolio at year end for tax purposes...

[obcmac]

While I agree with the discussion presented in the video, this analysis and discussion always seems to miss the key element of the market. There isn't one objective price for an individual card, but rather there are a group of buyers all with different valuations of the same card (aka, the good old demand curve). Dealers are buying in a competitive, but limited (due to time and information constraints) markets, and trying to reallocate to those with the highest valuation. A market clearing price isn't the "true price". A dealer will seek out individuals with highest willingness to pay and try to sell to them near their maximum. This is where supply matters a lot...89 UD Griffey, then you are going to get a price near the market clearing price since the selling market is competitive...cards with limited population can sell closer to the buyer's valuation instead of the underbidder valuation + 1 bid. A good business rule of thumb is to sell cards for more than you buy them for...and if you offer a dealer less than they paid, then it is often in the best interest of the dealer to wait until they find someone with a higher willingness to pay. So...if you paid $100 for your Kevin Seitzer rookie, holding out for $150 would be a sunk cost fallacy...but holding out for someone to pay a little more on a rare pre-war card isn't an example of the same error, even if one or two sales appear at lower levels.

[Leon]

Nice analogies but I respectfully disagree about supply. It really just doesn't matter. If I have a unique card and there is no demand then the sales price will be low. That said, there are over 1000 Jordon's in a 10 holder (I believe)....but the demand is through the roof so it's valuable. Supply rarely has to do with price since demand will set the price. All in my humble opinion...

Originally Posted by obcmac

While I agree with the discussion presented in the video, this analysis and discussion always seems to miss the key element of the market. There isn't one objective price for an individual card, but rather there are a group of buyers all with different valuations of the same card (aka, the good old demand curve). Dealers are buying in a competitive, but limited (due to time and information constraints) markets, and trying to reallocate to those with the highest valuation. A market clearing price isn't the "true price". A dealer will seek out individuals with highest willingness to pay and try to sell to them near their maximum. This is where supply matters a lot...89 UD Griffey, then you are going to get a price near the market clearing price since the selling market is competitive...cards with limited population can sell closer to the buyer's valuation instead of the underbidder valuation + 1 bid. A good business rule of thumb is to sell cards for more than you buy them for...and if you offer a dealer less than they paid, then it is often in the best interest of the dealer to wait until they find someone with a higher willingness to pay. So...if you paid $100 for your Kevin Seitzer rookie, holding out for $150 would be a sunk cost fallacy...but holding out for someone to pay a little more on a rare pre-war card isn't an example of the same error, even if one or two sales appear at lower levels.

[JustinD]

Originally Posted by Republicaninmass

I was once told it was "impossible" to sell something for less than you paid... by a government employee.

I quickly determined They have a lot to learn about the real world!

They must have never been to a government surplus auction. If anyone loses money on a regular and massive basis, it's the government.

[Hankphenom]

Try having a table with nothing but memorabilia, the buying and selling of which is a lot more art than science. You're always guessing both ways, and have to be nimble unless you want to cart the same stuff around from show to show, which some old-time dealers seemed to do little but. It's challenging but also great fun, and when you hit one out of the park you feel like a genius. But if something sat undisturbed and unasked about for more than a few shows, I had no problem re-pricing until I found the market I had overestimated when I bought it. I might have lost money on 15-20% of my inventory over the years, but not much on any given item and the total of losses was small in comparison with the gains or I wouldn't have done it for long.