This week were going to explore marketing. Before we go any further we must define marketing. When you think about it, what do you really consider to be the aspects of marketing? I’ll give you a moment.
Here is what dictionary.com gives us for marketing.
1. The act of buying or selling in a market.
2. The total of activities involved in the transfer of goods from the producer or seller to the consumer or buyer, including advertising, shipping, storing, and selling.
The second definition is a much better in depth explanation, but that’s just touching the surface of what marketing really is. For more explanation on marketing, we must start looking at things from a business perspective. In business, the overall idea of marketing comes from four core values, or the “four P’s”
Product, Price, Place, and Promotion
Price is something we are all concerned about. We have to make sure that we stay on top of trends, have up to date pricing, and most of all that our items are priced to sell, while making us the highest possible profits. This is the easiest step for us to mess up.
Place is the area we’re going to be working in. Where do you expect to move product? E-bay is an option, as is Magic Online Trading League. The local shops you mapped out after my first article found here are also the places you will be working in, so it’s important to identify all of them and know their needs.
Promotion is the concept of reaching the market that you want and need to be reaching. If one of the shops you go to doesn’t have any opportunity for you to move legacy and vintage cards, then there isn’t much point in taking them. At least not until you open up that market.
Armed with this knowledge, you can begin creating a successful marketing strategy for yourself to create the most stable profits possible. This brings us to the pricing itself which, on a good day, can be a tricky proposition at best.
Continuing on from the ideas of business theory, we have Pricing Strategy, which is broken down into eight different categories, but only four of them apply to our desires.
Value Based – This is the most basic of all pricing strategies, and the most common. It takes current values and generates trades based on that. While it’s not my preferred method, it is one that I’m willing to work with if it’s necessary, and other writers have covered how to get the most out of this.
Competitive – Perhaps you’re not the only person in your region attempting to establish a large market, or you have to compete with local traders that have a deep binder, or even with the local shop. All of these things are common and promote the construction of a healthy market. You have to know how to deal with competition, and price accordingly. One of the pitfalls to this is there is the potential for customers and trade partners to play you and your competition against each other, so know your hard line on prices.
Psychological – This is your big risk, big reward pricing strategy. Creating a personal need for a card for your trade partner will raise its value, but you have to know your trading partner rather well to create a psychological attachment. This can work both ways, both with your own cards and theirs. Placing personal value on something always raises its value, even if only slightly. Of course with risk, there is always the opportunity for failure, and this method can easily sink trades very quickly. I suggest only Jedi’s and masters of mind games attempt this.
Cost Plus – This is the method I most commonly use when trading things away. It helps to cover gas expenses of driving, and my time. The formula for it is an effective way to ensure profit. It is calculated as (Average variable cost + % allocation of fixed costs) * (1+ markup %). For example, if I were trading away a Ratchet Bomb, it has an average cost of $10, and a fixed cost allocation cost of $3 (this covers gas and other expenses), and a markup of 10%, it would look like ($10+$3)*(1+0.10), or $14.3, netting us an average of $4.30 to cover our gas, time, and other expenses. Trading a Ratchet Bomb at $15 isn’t unheard of at all, and the card could easily see that price tag to buy after the results from States start coming in.
As you can see there is more to marketing than the dictionary definition, and successfully incorporating those different ideas into your own trading routine can help you increase productivity, and profits. One aspect that isn't covered in there is supply and demand. This is because the theories of supply and demand can be applied to all of these to fluctuate the cost accordingly, and every market will be different. This is one of the many challenges that we have to face every day we go to trade, but now you have intelligent ways to price, and a much better understanding of marketing to help you.
Hopefully by now you’ve established yourself at some new shops, opened a new market or two, and checked yourself against the list. Now armed with a better idea of marketing and pricing systems you’re ready to conquer the tables. Next week we will continue to cultivate our personal business, and I'll have a new trading system to let you look over.
Until next time,
MTGstephenmoss on twitter