Hey everyone, and welcome back to Whinston’s Whisdom on Quiet Speculation. I wanted to start off with some congratulations for Paul Cheon, who recently top 8ed GP Denver. Paul was an amazing West coast player, a precursor to LSV and founder of the “Cheontourage”, but then left Magic to take a job on the tropical paradise of Curacao. I’m very happy to see him back, even if only temporarily, as he was one of my favorite American players while active. Today, I’m going to bypass some of the ideas suggested last week to discuss something that I feel is very important to those who want to set themselves up with trading as a legitimate source of income. This topic is funding and investment, and how to get your start on making money.
Chances are, if you’re reading this article on the finance side of Quiet Speculation, you are a trader. But this word carries many different definitions, ranging from the local FNM ringer, to Pete Hoefling of Starcity Games himself. And because all traders are different, their goals for trading are different as well. Some simply want to get the cards they need to complete their deck, while others are focused on making huge profit margins, and turning trading into a source of income. This article isn’t for everyone. It’s mainly focused on this latter category, those that treat trading seriously enough to want to develop it into a job. With that said, if you’re of a more casual persuasion, feel free to read on! But I admit that this week will have less content than normal for you.
Personally, I do treat trading and speculation as a significant source of income. Being 16, it’s a great job that I can use to make some money, while having flexible enough hours so that I can go to school. But it would be impossible for me to make money without several key factors and steps that I went through to get to this point.
The first step is establishing yourself a reputation. You want to be known around your store as a savvy trader, someone that doesn’t fold on card prices and almost always comes out ahead. But this doesn’t mean that you take on an ugly persona, and berate the guy trading with you. Having that kind of negative baggage is never beneficial. Instead, start small. Buy a booster box of the latest set and then start swapping. The key here is just to do well enough to get noticed.
Once you’ve established a reputation, that’s when the benefits start coming in. At this point, your path often splits. The first option is to get picked up on commission by someone with a large inventory of cards, sometimes even the store. They will essentially give you their cards, and you’ll trade them, keeping a percentage of the profit you make. Often, when on commission from a store or a dealer, you’ll also have special buylist prices, making it more profitable to sell your cards to your benefactor rather than online. This is the path I chose. I currently work on commission, and also scour Ebay for cheap cards, knowing that I can then sell them at a more than fair price. This arrangement is good for everyone. The benefactor is able to make significant profit without having to do any work and the trader has access to a larger collection, without needing to invest monetarily. An important thing when working on commission is being completely accountable and trustworthy. Within 48 hours of an event, I’ll email or facebook my benefactor a complete list of everything that I traded away, that I traded for, and tally up the totals according to a predetermined price scale. THIS IS CRITICAL. It’s unacceptable to be a lazy or unorganized trader when it comes to others’ cards. I predict a very short tenure as a commissioned trader if you don’t keep the other side informed.
But that’s only half of the road ahead. Once you’ve established a reputation, rather than hiring on under someone else’s banner, you can instead set yourself up as a dealer. Now I won’t deny it, this is difficult. It was an option that was never available to me because of the significant time and financial investment it requires. Being a dealer is a full time job. Look at Jon Medina, or Kelly Reid. Dealing is what they do. You can’t deal and be in college. You can’t deal and hold down another job. But if you’ve reached the point where Magic is important enough to you that you want to deal, then I would encourage you to go for it. Earlier this year, I was inquiring about the costs of becoming a dealer, and talked to more well known names like Mr. Medina and Mr. Reid, as well as faces I know from the Chicago area, like MTG Chicago and Pastimes. While I never set up a dealership, I can still share some of the information I received with you dear readers.
The first thing I asked was about financial investment. How much money do you need in the bank before you can start dealing? I got a variety of answers, ranging from $5000-$12000. For a high school student, this is a lot of money. While possible, these numbers really gave me pause, and made me reconsider whether I would be ready to make such a large commitment. Even just looking at the ground level numbers, I learned that a booth at a local PTQ can go upwards of $600! And to even begin to make that money back on site, you need to have a massive variety of card stock so you can meet every need of every player, as well as maintain prices that are competitive when compared to other dealers. This is no easy task. It’s clear that to become a dealer, you need to be certain that this is a legitimate, full time career for you, and jumping into it without any knowledge, consultation, or forethought is a terrible mistake.
There is an alternative to the “commissioned trader” or the dealer paths that I described above, and that is the path of the pure speculator. I did touch briefly on this in the commissioned trader point, but I wanted to flesh it out a bit more. Speculators are those who buy cards because they know they can sell them for more. This isn’t limited to price shifts because of recent event results, as many believe. When looking at my earnings, I’d say 80% of my income comes from speculation, not because it is more profitable than commissioned trading, but because it is much easier. All it requires is an internet connection and a way to access Ebay. Every day, I fire up my computer and search the Magic auctions for good buys, and usually maintain a 15-22% profit margin. I’ve had a few losses. I bought a Mox Emerald at $250, only to never have it delivered and have to fight for two weeks to get a refund. But I’ve also had my wins. 45 Contested Warzones and $2 apiece, which I can now sell for $4-$4.25. A Mint Alpha Fastbond for $90, despite being worth $200. A Molten-Tail Masticore for $4. Theses deals are all around you, waiting to be picked up. Speculating is an easy and non-committal way to make money off of Magic, and I highly recommend getting into it if you don’t already do it.
Well, that’s all on this topic for now. I may revisit it sometime in the future if there’s enough demand, but for now, I’ve finished with it. So, let’s move on to my tip of the week:
Card: Reflecting Pool
Reflecting Pool is an essential part of the manabase for 5 Color Control, and got quite a boost in value after Worlds where 5 Color Control performed quite well in the capable hands of LSV, Pat Chapin, and Gab Nasif. but since then, there has been a conspicuous absence of any sort of success for the archetype. With the rising popularity of Faeries and U/G Scapeshift variants, both poor matchups for 5 Color, the archetype is quickly being pushed out of the picture, dragging archetype staples like Reflecting Pool behind it. I can’t see 5 Color making it big again, and Reflecting Pool will be rotating out of Extended this October, so get rid of it now!
That’s all for this week. I can’t really hand out a prize for last week’s comment contest, because only one person commented! Yes Corbin, you commented too, but I can’t hand out prizes to a fellow QS writer. Your comments are much appreciated though, and I’ve tried to follow your advice week to week. So, last week’s comment will be combined with any comments on this week’s article. Remember, one positive comment, one constructive criticism, and on article topic you’d like to see in the future. Either comment under the article, or tweet me your response (my twitter is at the very bottom of the article). Prizes are still undecided, but the larger the feedback, the larger the prize.
This weekend I’ll be PTQing with the evil Fae, but hopefully you’ll all be kind enough to look past my indiscretions and wish me luck anyway.
See you next week!
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