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Insider: Truly Going Infinite – How to run a profitable EBay store

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As promised, I interviewed a local dealer that I work with regularly. He runs most of his sales through EBay, and I sat down with him and picked his brain about what it takes to be a successful dealer. I really want to thank one of our readers, Sven, who came up with some great questions, most of which I wouldn’t have thought up on my own. Sean is a good friend of mine, and I really appreciate him taking the time to sit down and talk about his business with me. I had initially planned to transcribe the interview verbatim, but as we are friends, there were far too many colloquialisms and references to specific people that would likely end up a bit confusing, so there will be some direct quotes, but for the most part I’m going to divide it up into sections, and highlight the main points that were discussed.

Sean is a local Magic player and dealer here in the San Diego, CA area, and he lives off the money he makes through his EBay store (He’s also been known to top 8 every Legacy event I’ve seen him attend, playing NO Elves).

You can find his store here, and it may help to give you an idea of what his listings look like, and what sort of inventory he carries. He may even have some cards you need in stock!


Humble Beginnings:

Sean played Magic in his youth, but around Future Sight, he and an old friend wanted to relive some of the nostalgia of their youth. Sean took the initiative to scour craigslist to find someone selling a collection. Having not looked at cards in over 7 years, he made a blind offer of $50, and took home a huge stack of cards. Curious to find out what he ended up with, he looked at online buylists, and determined he could flip this collection for $110 right away. He thought, that’s exactly what he’d do, and he’d take his $60 profit, to buy another collection that he could then have “free cards” to use and play with his friends.

It Begins:

After Sean was able to double his money on his first investment, he kept his eyes peeled on craigslist, scoping out collections whenever he could. He still had never really found anyone to play the game with him again, but his interest in Magic was re-invigorated, and he persisted. Early on, he tells me, some were profitable and some were not, but during this time he was really learning card values and sets that were released while he was away from the game. During this time, he had a full time 9-6 customer service job, and thought he could supplement his income with this new venture. He ran into problems at every turn, in the early stages. His first sale on EBay, the buyer filed a claim against him, and after all was said and done, he ended up losing money on the transaction. He shied away from EBay, and used CardShark for a while. Ultimately, he found the fees and structure to make the most sense on EBay, while leaving bulk stuff listed on CardShark.

“I went through about 20-30 different versions of my business model over the first year and a half, until I found a system that worked for me.” Eventually, he stopped the CardShark portion all together, and sells his bulk on EBay in lots of 25 rares for $10, or 50 for $20. His reason for this, is that the rare case when a card price shoots through the roof he would get cleaned out of that card on CardShark, but otherwise, stuff wouldn't move quickly enough. He notes that it is smart to keep the lots of bulk small, as people really don’t want duplicates in these types of lots, and its too hard to scour larger boxes for duplicates. After a year or so of testing out a variety of methods, he tells me he was about to give up on the venture. He wasn’t losing money, but wasn’t really making much either. Every dollar that came in, was going right back out for more cards, and he was spending about 4-6 hours per night after work researching, buying, listing and shipping. He pushed in another chunk of money from his regular paycheck, and bought a sizable collection.

I could tell he remembers this transaction affectionately, as the moment he knew he could do this for a living. He ran through the seller’s stuff, felt confident on all his pricing, and made an offer so that he could get the type of margin he would need for this venture to really start making sense for him. He paid $500 for the collection, expecting to receive $900 in return over the next month or two. That night, he stayed up all night, listing cards, and by the next day he was receiving 5 orders a day (up from the 1-2 every other day). The demands of the EBay store continued to grow as his feedback and inventory increased, and eventually he was able to leave his 9-6 job to focus on cards.

Sounds Awesome! Can I do that?

Sean’s first advice for someone looking to get into dealing cards: “Don’t do this if you don’t love Magic. It would drive you nuts. It’s not bad for me because I enjoy doing it, but that doesn’t mean it’s easy.” Seems obvious enough. I’d wager most people here fit that mold, but there’s much more to it than that. Sven had some specific questions regarding how to make the time to run a business like this, and Sean addressed some of those things specifically. “I would work from 9-6 at my day job, come home and work from 6-10 or later every night. I also didn’t have a weekend at all for 2 years. My entire weekends were dedicated to Magic, either at the shop trading, or on the computer researching, buying or posting listings.” A whole weekend dedicated to Magic? Not so bad.

Any advice for people trying to start up a side business, while maintaining a regular 9-5 job?
“If you have a baby on the way, a job that comes home with you, or any sort of weekly commitments, I wouldn’t recommend doing it the way I did, while still holding down another job. It will just wear you out. If you’re over the partying, and you like hanging out at home, looking at magic cards and watching movies? This might work for you, at least it did for me.”

What does it really take to make it as a dealer?
“80% of what selling Magic cards is, having the capital to buy collections, big BIG collections, and being knowledgeable enough to ensure that you’ll make the profit margin you need to earn a living.”

How much time (and money) do you need to invest on a monthly basis to be able to live on it?
“I spend anywhere from $5000 to $9000 per month buying cards. So, I would say, if you wanted to come in fresh and hot with a bunch of stuff to sell like I have (over 2000 listings at a time) you’d want to have $15000-$20000 start up money. Or you can slow-roll it up the way I did, and I think most people start the way I did.

“As far as time goes, that will be dependent on what you’re trying to do. If you’re starting up with nothing, time needs to be your investment to your business, finding killer collections to buy and staying up to date on pricing. I was able to do just enough to keep me interested spending about 20-30 hours a week. Now I spend the same 20-30 hours per week, but I don’t need my other job.”

What resources do you use to come up with prices to list cards?

“I usually just take a look at StarCityGames.com and undercut them by a dollar or two. If they are sold out and the card is hot, I’ll double check completed listings on the auction side of EBay and fall in line with those. Most people use SCG as a price guide, even though its one of the most expensive places on the web to buy cards. Undercutting them by a little bit, while still having a huge inventory in stock, is usually enough to draw customers.”

What about buying collections, how do you go about making offers?

“I feel its more professional to make piles for people, breaking their cards into $0.10, $0.25, $0.50, $1, $2 etc. It helps ease them into understanding that I’m not just throwing a low number at them, and that I have set prices in mind for each card. I make sure to chit-chat and joke around with them during this process, and at the end I’ll say, ‘Here are the cards that are worth anything and I’ll offer you X for it, and the rest isn’t worth anything. I’d take it, or you can toss it, or you can keep it.’ That usually puts it very matter of factly, in a take-it-or-leave-it way. They’re trying to sell these cards, so normally that’s what they’ll do.

“For pricing, I do it all by memory now. I don’t bring my iPad, I don’t break out a computer, I go with the prices I know. You have to know your prices, period. You’re going to get burned if you don’t and checking every rare in someone’s collection on your smart phone isn’t getting you anywhere. The difference between what I buy and sell at comes from how quickly I think it will move, and also what I spend on EBay/PayPal fees, and how much margin I need to make on the buy.”

Do you have any tips on how to write your EBay listing?

“I only do Buy it Now. Reason being, is I can’t get a good figure on what cards will sell for, if auctions are closing over a wide range of prices. There are dealers bigger than me out there, who have thousands of auctions going, and they run enough volume where they can make some good averages off their sales. You also want something that stands out in the listing title. You know those brackets? The ones that say 2x or x2 like that? ([2x] Oblivion Ring [x2] for example) I started that. At least I think I did. At first it made it easy for people searching to notice the pattern and realize I had tons of stuff in stock. Now everyone does it. It actually makes me happy, it means it’s working. You need to find something to put in your listing to make it stand out, try different things, until one works. Also be sure to include the name of the card, the quantity, the condition and the edition. As far as content within the listing goes, I keep it simple. If you have thousands of postings like I do, I’ll say, ‘You're bidding on the card(s) in the title and picture.’ So I’m not spending too much time on each listing, but if you’re starting out small, taking the time to repeat the Name, Quantity, Condition, and Edition is fine. You also always want to be clear about shipping costs. That’s really all the information people want.”

“I only use scans of cards that are high ticket, like duals or Power, or things that are signed or unique like crimped cards. Otherwise I use stock images I’ve compiled from slightlymagic.net.”

Do you advertise at all?
“No, not really. I have a facebook page that people I know locally know about, but for the most part I rely on my feedback on EBay and the perks I get from having the basic EBay store. They provide me with spot ads on the front page periodically, and by simply having tons of inventory, anyone searching for Magic cards will find me. For this reason alone I try to have at least one piece of power listed at all times. Marketing is something I know I should spend more time on, but I don’t. I used to use the auto-mailer that EBay offers storeowners to send out promotions or other news, but I never got any response from it after a year, so I stopped using it.”

Why have the EBay store then?
“It only costs me $50/month, and it does grant me exposure I wouldn’t otherwise have. If you’re doing enough volume it makes sense, because Buy it now Listings only cost me $0.05 instead of $0.20, and I run 4-5000 listings at a time.”

What about trading at the LGS, does that ever get awkward?
“People either expect X or they expect Y. People like you, and {other drafters} know that people need to make money, and that’s what I do for a living. I’m very open that I’m taking value in exchange for my time to sort, list and ship the cards, as well as eating up however much time it takes for the card to move. There’s also people who are hard traders, and they question why I value things low when I’m buying from them, sometimes (but not always or often) lower than SCG buy prices. I have to explain to them, that I can’t sell at the same prices SCG can, and I have EBay and PayPal fees to worry about, and a hole slough of other factors. They’ll either get it or they won’t. The one thing I don’t want, is I don’t want people to see me as that guy who’s trying to snake them for their cards/money. I don’t want people to say, ‘Oh, here comes Sean, hide your binders.’ If it doesn’t make sense for them to trade or sell to me, then we just wont. It’s that simple. I need my LGS, I rely on networking with players not only to buy and sell cards, but also to keep sharp on what people are excited about and what cards are moving.”

Where do you search for cards to buy?
“I stick to craigslist, EBay and the LGS. EBay is the bulk of it, bidding on huge collections, and just taking the time to cross reference their collection with prices, and offer an amount that I”m going to be comfortable with. I just bought an enormous collection for $6000, and sure, making a few thousand dollars sounds like a ton, but I’m going to have to list, track and ship over 30,000 cards. That’s a lot of work. Having cash ready to jump on stuff like this is how I stay in business.”

Any legal issues ever arise, or any advice you would give?
“Just pay your taxes. (laughs) PayPal now has to give access to the IRS for any accounts that earn over $20,000 per year, so just be aware of that.”

No issues with international shipments, or customs?
“No, in fact about 70% of my business comes from the UK. I think it’s because the dollar is so depressed right now, that they want in on our currency rather than their own. If I didn’t ship internationally, I’d be losing a lot of business. I’ve never had issues from shipping or customs.”

What about condition? How do you evaluate the condition if you don’t use scans, and do you ever get complaints?
“I use my own judgement. I’m picky about condition myself, so I am a pretty tough grader. I use the NM/SP/P/HP model, because I don't like the term Excellent. If i was a new player, I would think Excellent means something like Near Mint does, when it doesnt. I also never call a card Mint. I’ve never seen a Mint card in my life. My ‘Item as Described’ rating on EBay is 4.97/5 and my over all rating is right at 5 with well over 22,000 feedback. Sure, there’s issues, but I’ve always been able to resolve them pretty smoothly.”

How important is feedback on EBay?
“Well of course its important. When I only had a few hundred, I was checking it daily to see what people thought about my services. Now I don’t even look. I made a list of a bunch of funny feedbacks to leave for my buyers that were related to Magic mechanics. For example, ‘Your cards are trampling their way to your door as we speak.’ Something cute and funny that will make people happy you left feedback, and also remember you.”

Do you get a lot of repeat business?
“Yeah, a ton. There’s buyers who are always very communicative with me, where I’m now on a first name basis with them, where there’s also tons of new people too. I want to start including a business card with my shipments, so that it sits on their desk and hopefully they think of me the next time they need something.”

Hopefully this gives you some insight to what it takes to be a dealer, a very special thanks to Sean for helping us out.

Chad Havas
@torerotutor on Twitter

Chad Havas

Chad has been with Quiet Speculation since January of 2011. He uses price speculation to cover all his costs to keep playing. Follow his journey from format to format and be prepared to make moves at the right times.

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Posted in Finance, Free Insider

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20 thoughts on “Insider: Truly Going Infinite – How to run a profitable EBay store

  1. I also left out that Sean reccomends TurboLister. It's a must for anyone running tons of listings at once. Search Features and inventory management all in one, everything quickly updates to EBay, and re-listing unsold cards is simple.

    1. Thanks for the great questions Sven. The interview lasted an hour, and i literally couldn't fit everything we discussed into the article. If you feel i didn't address something you wanted to know, or you have follow up questions, let me know. chad at torerotutor dot com

  2. This was fantastic! Thanks for doing it.

    One lingering question I do have for Sven is: How do you ship? Do you live close to a post office? Or do you just toss the cards in the mailbox?

    1. Sorry if there was confusion! Sven was a reader who had questions for my dealer, who's name was Sean. They look similar. I'll ask about that and update here. I know where he lives, and would presume a post office is near by, but I don't know his process.

  3. If Sean is comfortable with sharing, what is the combined %age of all his fees that he incurs? I know that shipping isn't an expense because you charge it to the buyer, but what are the economic benefits of going for a store instead of just straight auctions?

  4. My pleasure. Thanks to Sean for answering!

    I feel like this article needs a follow up 🙂

    I am doing this more as a kind of extra small income, but indeed interesting stuff!
    Perhaps we should open a thread on the forum to discuss and answer questions regarding this particular aspect?
    It would be something we can all learn from isn't it?

    About the shipping question (Sean can answer as well ofcourse :-P) : I ship everything in a bubble envelop each morning before taking the train to work 🙂 I sleeve all cards (using extra cards front/back for protection against stamp damage) and the sleeves go between 2 postcards. Protection is key!

  5. Doug it's wrong to believe that the buyer pays for shipping, ebay takes a percentage from whatever you charge for shipping, bubble mailers cost between $.40-$1.20 and shipping costs around $1.70 ($2.51 with delivery confirmation) plus the costs of sleeves,cases and tape,this is besides the 15% you pay to ebay and paypal. Also starting next year you must pay taxes on paypal sales. The advantages of having an ebay store are that listings cost $.05 instead of $.50 and you get some free advertising plus links to your other auctions for $50 a month.

  6. I would also love to see a followup article, I read through this several times. Can you link to the store so we can check it out? (or maybe I'm missing the link somewhere?)

    A few points to follow up the conversation here: I believe if you pay for a store they don't charge you a percentage on your shipping costs. (Another great reason to pay the monthly fee for a store rather than run a simple seller account.) Also I wanted to note that it's actually $0.20 per listing for the first tier of eBay store. You have to move a loooot of cards per month before your fees drop to a nickel per store item. However, I'm a powerseller and still at 20 cents level and still have plenty of room to profit.

    However, I find it tough to get profit out of any card worth less than a couple bucks. Yet there are stores out there charging a dollar for worthless commons. How are they doing it? If you do a followup, I'd love to hear more about Sean's tactics for what to list and how to list it (singles vs playsets / how to build effective mixed bulk lots) especially when it comes to tactics for moving smaller value cards worth less than what it would cost to ship them.

    Last note for everyone: Chas Andres had a great article a few months back on CFB for those interested in seeing his eBay tactics. He's definitely coming at it from a different angle than Sean but it's cool to see where the two articles line up. http://www.channelfireball.com/articles/traderous

  7. Hey guys, Sean here, I thought I'd address some of the minor questions here and then if there's any more that need a more in depth explanation Chad and I can do a follow up.

    For shipping I charge $1.50 and $0.25 for each additional auction. Most of the time if someone buys 8-10 cards or less I'll just invoice for the $1.50 as the postage doesn't change. I use toploaders, sleeves and another type of card protector called a "card saver" (size 1) It allows me to put anywhere from 4-12 cards in it comfortably and still arrives just as safe as cards in a toploader. I use no. 7 coin envelopes to ship 1-12 cards and bubble mailers for anything exceeding that. The post office also provides a lot of ready to go shipping supplies such as flat rate boxes and flat rate priority envelopes which are definitely worth picking up if you plan to do any bulk selling. Buying a stamp with your return address and a small label printer are definitely a good idea as well (unless you plan to use paypal/eBay shipping labels)

    As for fees, eBay recently started charging a percentage of the entire sale to combat people who were circumventing fees by listing at high shipping costs (i.e. a force of will with a buy it now of $1.00 but shipping is $60.00) so shipping is definitely factored into that percent now. Aside from that the fees are all laid out on eBay and differ. There's also two different types of accounts on paypal and I believe they have 2 different fees, I haven't changed mine in years so I forget exactly what the difference is. Please note anyone using GBP the fees are tiered based on how much you receive monthly (1.4%-3.4%)

    Hopefully this answers most of the questions, if people would still like a follow up I would be happy to do it or I can answer the questions here, whatever works.

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