Card Interest Down? Not at the National.

[whodey14]

Originally Posted by parkplace33

I agree with what you are seeing. I don’t understand it either. Why would you buy a $20 card, grade for $15 more, and then try to sell for $50. Makes no business sense.

These guys should listen more to Warren buffet and less to YouTube card influencers.

Doing it once? Sure. As mentioned by theshowandme at scale that is a very legitimate business. Many thrive at smaller margins.

EDIT

Went to the show all week and the after show on Wednesday. Even on the first evening the place was ridiculous. I walked in about 5 feet and couldn't leave. Made my way through the crowd to a side door and left. Not for me. Even the crowd at the show was excessive. Makes me miss pre-covid National times where you could at least walk around and see the showcases. I'm younger than most and do enjoy the modern side of the hobby as well but my generation is not who I associate with. Modern for me is unique patches/autos of older players. So the video crew flipping Panini "case hits" is not for me either. Did feel like vintage was very well represented however.

[darwinbulldog]

Originally Posted by theshowandme

That’s ~40% profit margin

That is incredible at scale

You may be conflating trying to sell at $50 with selling at $50.

[parkplace33]

Originally Posted by darwinbulldog

You may be conflating trying to sell at $50 with selling at $50.

Bingo.

[raulus]

Originally Posted by theshowandme

That’s ~40% profit margin

That is incredible at scale

Not so sure that it’s really this rich.

This analysis ignores the cost to ship back and forth from the grader. Also ignores selling costs, and the cost of capital or time value of money while your cash is tied up waiting for the piece to get graded, and then waiting for it to sell once it’s graded. Throw in some overhead for salaries to pay your people to manage all this stuff, a little rent to store everything and have a site for your people to work, some insurance to cover your operations, and it gets a lot more tight.

On a good day it’s more like a 15-20% profit margin. On a bad day it could be less than 10%. Still not nothing. But probably not nearly as fat as it might seem at first blush.

Of course, if the market is rising, particularly if it’s rising aggressively, then the time spent waiting for grading and for the piece to sell works to make the math a whole lot better. But as much as it pains us to admit it, cardboard doesn’t always go up, and go up bigly.

[Exhibitman]

That video is crazy. Looks like the 2022 Burbank show, which was so packed they weren’t letting dealers back inside.

Modern card speculation is the poor man’s meme stock.

[theshowandme]

Originally Posted by raulus

Not so sure that it’s really this rich.

This analysis ignores the cost to ship back and forth from the grader. Also ignores selling costs, and the cost of capital or time value of money while your cash is tied up waiting for the piece to get graded, and then waiting for it to sell once it’s graded. Throw in some overhead for salaries to pay your people to manage all this stuff, a little rent to store everything and have a site for your people to work, some insurance to cover your operations, and it gets a lot more tight.

On a good day it’s more like a 15-20% profit margin. On a bad day it could be less than 10%. Still not nothing. But probably not nearly as fat as it might seem at first blush.

Of course, if the market is rising, particularly if it’s rising aggressively, then the time spent waiting for grading and for the piece to sell works to make the math a whole lot better. But as much as it pains us to admit it, cardboard doesn’t always go up, and go up bigly.

I’ll concede the points about opportunity cost of sitting inventory and playing the waiting game

That is real risk for any business owner.

That said, I know several people operating this way and they are churning inventory a number of ways: card shows, Facebook, Instagram, Discord, Twitter, and last case scenario, 7 day eBay auctions.

Shipping adds little to the per unit cost basis if you are sending 50-100 cards at a time for example. Or if you are dropping off at card shows where you only pay for shipping on the way back.

If you are getting 15-25% return on your $ while doing this on the side, it can be very fruitful

[theshowandme]

Originally Posted by Exhibitman

That video is crazy. Looks like the 2022 Burbank show, which was so packed they weren’t letting dealers back inside.

Modern card speculation is the poor man’s meme stock.

I was with several people and we kept saying how crazy it was

Cards were moving and a lot of cash was being exchanged

And just imagine the original plan was for that thing to run 3-4 more times during the week!

[notfast]

I love those $5-20 cards that sell for $50 after sending to sgc.

Helps cover cost of the cards I want to keep.

[jimtigers65]

I was very surprised to see the amount of people going through ten cent monster boxes at the National.

[Exhibitman]

Don, it looks really good from the outside but the numbers are not that good in reality, assuming one operates above-board--not cheating on income taxes, reporting sales for sales taxes, etc. Cost of inventory, cost of sales, sales taxes, and income taxes all take quite a bite out of my gross profit. I know a lot of dealers who are "doing great!" but have only a vague grasp of their actual net profit. I also would not assume appreciation of inventory beyond the rate of inflation. Overall trends can be deceiving. Lots of "-" signs over the last year. Sitting on inventory that is declining in value really sucks; I try to cash out my run of the mill purchases quickly so I don't get stuck.

Jim, I totally get the dime box stuff. Hell, my setups at most shows are entirely picker boxes, though my floor is a buck. I think that most collectors want to collect, and if they are a bit strapped, they can still have fun for a few bucks at a cheap pickers' table.

[Leon]

After selling my collection the first time, I don't worry about the value (though I still have quite a bit in it, relatively speaking) of it like I used to.
A few good purchases can make up for a lot of not-so-good ones. Card interest is up but many commodity type cards, even of Cobb and Ruth, are down.

Originally Posted by Exhibitman

Don, it looks really good from the outside but the numbers are not that good in reality, assuming one operates above-board--not cheating on income taxes, reporting sales for sales taxes, etc. Cost of inventory, cost of sales, sales taxes, and income taxes all take quite a bite out of my gross profit. I know a lot of dealers who are "doing great!" but have only a vague grasp of their actual net profit. I also would not assume appreciation of inventory beyond the rate of inflation. Overall trends can be deceiving. Lots of "-" signs over the last year. Sitting on inventory that is declining in value really sucks; I try to cash out my run of the mill purchases quickly so I don't get stuck.

Jim, I totally get the dime box stuff. Hell, my setups at most shows are entirely picker boxes, though my floor is a buck. I think that most collectors want to collect, and if they are a bit strapped, they can still have fun for a few bucks at a cheap pickers' table.

[Yoda]

Grading has changed the whole matrix of how the hobby's economics functioned in the past.

[brunswickreeves]

Originally Posted by Yoda

Grading has changed the whole matrix of how the hobby's economics functioned in the past.

I recall a mid 1990s Beckett article about PSA changing the hobby dynamics and valuation, wow was it an undersell!

[Exhibitman]

Originally Posted by Leon

After selling my collection the first time, I don't worry about the value (though I still have quite a bit in it, relatively speaking) of it like I used to.

Must be a nice place to be...

Originally Posted by Leon

A few good purchases can make up for a lot of not-so-good ones. Card interest is up but many commodity type cards, even of Cobb and Ruth, are down.

That is so true. And in the retelling, the bad deals tend to get fuzzed out by the shine of the good ones. I can't recall anyone bragging at the hotel bar about the crappy judgment he showed overpaying for something.

[Exhibitman]

Originally Posted by Yoda

Grading has changed the whole matrix of how the hobby's economics functioned in the past.

[Clemente_Collector]

Howard Chasser came on my channel to discuss the National, Howard had some great perspective from the dealer side of the table, check it out!

https://m.youtube.com/watch?v=ssj78Z...UgY29sbGVjdG9y

[Hankphenom]

Originally Posted by brunswickreeves

I recall a mid 1990s Beckett article about PSA changing the hobby dynamics and valuation, wow was it an undersell!

There was fierce opposition at first from a who's who of major players, dealers, collectors, and AHs alike. Then when the tide began to turn about 25 years ago, it seemed like the entire hobby for several years was driven by buying raw to submit and collectors getting their collections graded to cash in on the higher prices graded cards were getting. Eventually, you couldn't hardly sell a non-graded card of any consequence. Same with autographs.

[BigfootIsReal]

If card "interest is up" why do prices continue to crumble?

[BioCRN]

Originally Posted by BigfootIsReal

If card "interest is up" why do prices continue to crumble?

Crumble is a bit dramatic. It's not 2021/2022 anymore, but before the "COVID bump" era of the hobby things were rather flat for well over a decade.

We're off-peak, but there's still an elevated interest in the hobby and plenty of money flowing through it.

At the very least the current "new normal" is searching for a floor that's a still a significant boost over pre-2019 prices.

[Exhibitman]

Originally Posted by BigfootIsReal

If card "interest is up" why do prices continue to crumble?

If they were crumbling I’d have finished my Goudey Ruth run.

[babraham]

Originally Posted by Exhibitman

If they were crumbling I’d have finished my Goudey Ruth run.

Right?

Prices have stabilized or come down a bit, for sure...but certainly haven't seen any vintage cards crumble in value (yet, at least).

[BigfootIsReal]

Originally Posted by babraham

Right?

Prices have stabilized or come down a bit, for sure...but certainly haven't seen any vintage cards crumble in value (yet, at least).

Just look at the 1948 Blue Tint or 1947 Bond Bread or 1952 Star-Cal where just last week a Mays A sold for $1,345 when the sale before that was almost 1,900 (won't find this sale, I forgot this sale was a private one I witnessed at a show).

[parkplace33]

Originally Posted by BigfootIsReal

If card "interest is up" why do prices continue to crumble?

On the low grade/less desirable stuff, sure.

On the good stuff? Negative.

[Johnny630]

Originally Posted by parkplace33

On the low grade/less desirable stuff, sure.

On the good stuff? Negative.

Agree the good stuff if it really want's to be sold it goes to the big houses. If it want's to be on display for show and tell it sits in showcases for eye candy.

[Snapolit1]

Everyone can offer whatever anecdotal takes they want . . . and none of us knows for sure whether demand for vintage is "up" or "down". Not sure why its even that important.

[raulus]

Originally Posted by Snapolit1

Everyone can offer whatever anecdotal takes they want . . . and none of us knows for sure whether demand for vintage is "up" or "down". Not sure why its even that important.

Well, we’ve got to have something to debate and argue about!

Plus, if you’re planning to make some acquisitions of ubiquitous stuff that can be found every day, then maybe you have a choice between buying now, if prices are headed up, or waiting a bit, if prices are trending down.

[BigfootIsReal]

Originally Posted by Snapolit1

Everyone can offer whatever anecdotal takes they want . . . and none of us knows for sure whether demand for vintage is "up" or "down". Not sure why its even that important.

Evidently you could care less if your card is worth $100 or $10,000.........since it's not important, why not sell me everything you have for, let's say, $10 ?

[perezfan]

Originally Posted by BigfootIsReal

Evidently you could care less if your card is worth $100 or $10,000.........since it's not important, why not sell me everything you have for, let's say, $10 ?

"Could not care less"... Just think it through.

[ullmandds]

when the economy is slumping...so does superfluous spending.

[Brent G.]

Last weekend, I saw a kid in his 20s drop $6,000 on a PSA 7 ‘86 Fleer Jordan (about a $1,000 overpay) at a show at a Salvation Army in Wisconsin. Cash was FLOWING in every direction and on everything. Prices definitely weren’t crumbling there.

[SAllen2556]

Originally Posted by perezfan

"Could not care less"... Just think it through.

-So that bothered you, but the apostrophes on "wants" you decided to let go?

Agree the good stuff if it really want's to be sold it goes to the big houses. If it want's to be on display for show and tell it sits in showcases for eye candy.

[ClementeFanOh]

My experience at the National is that interest is through the roof. This observation is reinforced by activity I’ve seen on other venues. SAllen25- even when your grammar policing is correct, it’s still not on point. Is there a comment in your future that actually hits on the topic? Or can we expect more anally retentive, spotty red ink marks with no substance? Asking for a friend. Trent King

[obcbobd]

Originally Posted by Snapolit1

Everyone can offer whatever anecdotal takes they want . . . and none of us knows for sure whether demand for vintage is "up" or "down". Not sure why its even that important.

Well as a collector, I am hoping for prices to go down - a lot.

My heirs will want prices to go up - a lot.

The investor wants prices to go up on cards they own and go down (just for a short time) on new cards they invest in.

Or something like that. I guess it's kinda complicated.

[HOF_Forever]

Originally Posted by Exhibitman

Don, it looks really good from the outside but the numbers are not that good in reality, assuming one operates above-board--not cheating on income taxes, reporting sales for sales taxes, etc. Cost of inventory, cost of sales, sales taxes, and income taxes all take quite a bite out of my gross profit. I know a lot of dealers who are "doing great!" but have only a vague grasp of their actual net profit. I also would not assume appreciation of inventory beyond the rate of inflation. Overall trends can be deceiving. Lots of "-" signs over the last year. Sitting on inventory that is declining in value really sucks; I try to cash out my run of the mill purchases quickly so I don't get stuck.

Jim, I totally get the dime box stuff. Hell, my setups at most shows are entirely picker boxes, though my floor is a buck. I think that most collectors want to collect, and if they are a bit strapped, they can still have fun for a few bucks at a cheap pickers' table.

I've often wondered how many dealers accurately track things like COGS, net sales, expenses, and inventory to get a truly accurate financial picture. Anecdotally I'd guess the number is pretty low but I've never been on that side of the table.

[ValKehl]

Originally Posted by HOF_Forever

I've often wondered how many dealers accurately track things like COGS, net sales, expenses, and inventory to get a truly accurate financial picture. Anecdotally I'd guess the number is pretty low but I've never been on that side of the table.

Greg, those dealers who actually report their sales activity for income tax purposes do this when they prepare (or have their tax accountants prepare) their Schedule Cs to their Form 1040s.

[jchcollins]

This was my first National. Went with my card buddy from N54 (Hi Robert!) and we had a blast. My impressions, in no particular order:

*Crowds both days we were there (Thursday and Friday) were huge as expected, and likely too big on the whole for the realistic capacity size of the venue. Restroom situation was a joke, but also long lines for food and refreshments. It was nice however to have food trucks inside, and though expensive - more food options than just a crappy cheeseburger and soda from the corner stand in one place in the building. Not that that would have been possible anyway given the crowd size. Traffic seemed like a nightmare, but we had flown in and Ubered both days and so it was not a super big deal just getting dropped off even if it took a while. The Uber rates on the whole from our hotel 15 mins away were very reasonable.

*Communication around how to get in, what the deal was with VIP people vs. the peons was shoddy at best. On Thursday, they just opened up the floodgates even before GA time at 10 am. I walked right in, no wristband, nobody scanned my ticket or anything. The next morning, despite getting to the venue about 45 mins earlier - we stood in the wrong line for half an hour, and that day they were requiring everyone to get a wristband, whether or not you intended to leave and come back or not. The lack of organization and communication here for such a large event just struck me as odd. Event staff when asked specifically at least in my experience were either clueless, or close.

*I was super pleased at the large amount of vintage available, and within reason, the prices. Most dealers had no problem negotiating, and in many cases of course due to the selection if you didn’t like the price - you could just move on to the next table and find the same thing. There were of course some fairly overpriced vintage dealers there (i.e. 707 Levi…) and I just kept moving, despite the temptation of their massive inventories.

*Poor inside WiFi and cell reception was an unexpected burden. Really, how many years have they had to know this was a potential problem and fix it? At times could not get online for long enough to look up a comp, and I couldn’t get a PP transaction to go through at all on Friday - and since I had blown my cash of course the previous day, I had to resort to the ATM in the foyer along with a not insignificant fee for using it. Just seems like there should be no excuse for this in 2024. is this just a problem at every expensive trade show? I doubt it.

*Highlights of the trip for me were seeing Memory Lane’s T206 Wagner, the Ruth cap and all the historical stuff at Heritage, meeting finally in-person my childhood supplier Kit Young, and finally chasing down my grail Banks RC, which I got in a perfectly centered PSA 4 from Ash. Not to mention long overdue time well spent with my card buddy Robert.

On the whole the experience met my expectations and I will be back, if not every year. The National for what I do is overkill, and not just a little overkill, but it was also a lot of fun despite the issues. I doubt I will return if it goes back to Cleveland anytime soon, but I hear the logistics - if not the layout itself in Chicago / Rosemont is a lot better.


Sent from my iPad using Tapatalk

[HOF_Forever]

Originally Posted by ValKehl

Greg, those dealers who actually report their sales activity for income tax purposes do this when they prepare (or have their tax accountants prepare) their Schedule Cs to their Form 1040s.

Yep, I understand the tax situation. I just wonder how many people there are who's accuracy would withstand an audit . It was clear when walking the show who would stop after a transaction and take notes on paper or digitally and who moved from transaction to transaction way too fast to record anything.

This was more of a random musing than anything and is OT to this thread so I won't bog the thread down with it moving forward.

[Hankphenom]

Originally Posted by HOF_Forever

I've often wondered how many dealers accurately track things like COGS, net sales, expenses, and inventory to get a truly accurate financial picture. Anecdotally I'd guess the number is pretty low but I've never been on that side of the table.

I suspect there's an almost direct proportion between how big or small a dealer is to how much of their activity gets reported to the tax people. Big guys with sizeable bank accounts, etc., will get audited, and they'd better have some decent records of income, expenses, inventory, et al. Little guys, part-time guys, not so much.

[Spike]

Wrote up my Cleveland National thoughts, photos, and advice for next time, should NSCC return there. Did I miss any of the VIP benefits? :-)

https://www.number5typecollection.co...ow-report.html