Minimizing your Losses

[smtjoy]

I think everyone who buys cards hope to at least break even but it’s very hard to do.
I really think it boils down to how you collect, I see 4 broad types. I do think people can be a part of more than one type, like one part of their collection is life time say like a player collector of WaJo or Waddell but a flipper with the rest of their collection-

The Life Time Collector- A person who collects and rarely if ever sells, they are the top of the food chain because generally when they really want a card they are willing to pay what it takes to own it. They are not worried about SMR, VCP or past sales, they want the card period. Resale value means nothing to them. They do no real selling except if they do get a lot with extra cards they usually send it to someone else to sell it at what it can get now.

The Collector/Investor- A person who collects a certain area but is very aware of the value of their collection and is reluctant to pay much over market for their items but will gladly pay VCP type numbers on much of their collection. They understand they may miss out on certain cards to the life time collector but if they are patience and wait for the card at their price, many times they will get it. They mostly buy single cards, as it’s too hard to value lots and don’t want to deal with extra cards and how to sell them. They generally pay more than the flippers and dealers so they get the cards they want but if they ever do decide to sell they will lose a bit when selling – 10-20% if sold within a few years of purchasing. I have also seen that they will change directions in their collection and in life and just sell all or part of their collection; they are not as tied to their cards as the life time collector.

The Collector/Flipper- This collector is pretty savvy in that they realize that in order to really get some of the best deals out there it’s to purchase lots and break them up or hunt ebay/auctions house for deals. Having some capital to spend is important and they will always have money tied up in cards to sell. They are very adept at selling extras and many times can buy lots and sell off all but 1-2 and get them for free to build their collection. Their collection will have more holes in that they are content to wait for the right price or a certain lot to appear. They will pay more than the dealers at times if cards they want are out there in lots or such. They are open to buying any card they feel they can turn into profit and additional cards for their collection. They are open to selling most cards in their collection for the right price. They can do very well and can make money on most purchases.

The Dealer- They are only in it for the money, they care more about what they can buy and sell a card or lot for. The most important thing for them is capital, inventory and having lots of both. They are the ones who can purchase the 10k, 50k, 100k sets/lots/collections and break them up. Since it’s a job for them they are at it all the time and should have the best feel for the market (or they will not be in business long). If properly funded they can wait to get their price (ala 707) and take whatever strategy to sell that they want to (high margin low volume, low margin high volume, etc). They rarely win single card auctions unless its to get a card they have a buyer for or if they feel its at the bottom of the market. In most cases they are the bottom of the food chain in prices paid for single cards.

Also on taking a loss, anyone who purchases a single graded card and decides to sell it within 2-3 years can expect more times than not to take a 10%+ loss on it to cover at minimum selling fees. In order to make real money on cards purchased at market prices I would think 10-20 years is needed.