Welcome back, readers!
Last Friday evening I had some friends over to play Commander (or EDH for those of us playing awhile). One of my friends brought over a box of cards that were "left overs" from a big collection he'd purchased recently. He told me he'd spent around $4800 on the collection, which included one of every dual land and a full set of Survival of the Fittest. There were some good playable cards leftover that he didn't really need, and he wanted me to go through them and see if there was anything I wanted.
So Saturday morning I got up early and began looking through the box only to find a lot of highly liquid cards I could sell on my online store. This article will go over my process of buying cards when people come to me wanting to sell (or in his case trade).
Step 1: List Everything Valuable
Obviously the first thing you want to do when reviewing a collection to buy (regardless of size) is to get a list of everything of note.
What qualifies as "notable" will depend on your outs, and the profit margin and fees associated with them. In some cases you may only want to focus on cards over a certain value. As I've mentioned repeatedly, on TCGplayer net profit and percent returns based on sale price are pretty abysmal for anything under $5. That's where I usually set my lower limit, but depending on your own circumstances you may want to use a different threshold.
This part can be a bit tedious, and ideally the person selling to you already has this list. In this particular instance he only handed me a box so I had to sort and come up with a list myself.
I didn't mind doing this because he is a friend, but if you have to do this for a stranger it's important to remember that your time is valuable. If it's a larger collection, you need to include the value of your time that you've already spent when making a final offer. For example, if I created a list, ran my numbers, and was going to offer $500 on a collection, but I've already put in three hours of work, I may only offer $450.
Step 2: Price Out Everything on the List
The next step is to get the market value of the cards (using whichever price system you prefer). This is typically going to be the price you would sell them for before any taxes or fees are removed. This is where you need to be picky on condition, as it is the first step in the monetary evaluation.
We will use an example of one card on my friend's list to show each step moving forward.
|Geth, Lord of the Vault||Scars of Mirrodin||2||NM||$10|
So far, I doubt anybody is surprised with this exercise. However, this next step is something I haven't seen anyone else do.
Step 3: Cost of Selling
There is always a cost to selling something. It may be zero (like if you sell a card to a friend you're already planning on spending time with); it may be the fees and shipping cost of TCGplayer; or it could be much more if you end up having to buylist the card in the end. The important thing here is that both you and the seller come to an understanding about this cost. Nothing derails a buy faster than when you and the seller are on different wavelengths.
Up to this point in the process, I'm usually happy to be transparent with my seller. Everything is straightforward and there isn't anything that might be considered "company confidential" (i.e. information that you wouldn't want your competitors to have). If I'm sitting down with someone who is looking to sell me a lot of cards, I have no reason to deceive them on the numbers behind my offer.
Continuing our example from above, we now have something that looks like this:
|Card||Set||Qty||Condition||Market Price||Shipping Cost||TCG Fees||Card Sold Value|
|Geth, Lord of the Vault||Scars of Mirrodin||2||NM||$10.00||$0.51||$1.60||$7.89|
Step 4: Risk Factor
When it comes to Magic cards, there is always risk when trying to sell them. If a card gets reprinted it loses a lot of its value. If it gets banned it can lose most of its value. If the metagame shifts or a better version is printed it can lose value. So for each card I have to determine the risk tied to it.
Currently my biggest concern is that Wizards is showing a trend of creating more and more supplementary products (i.e. products that may or may not be Standard-legal, but serve as additional sales revenue). Now I will admit that my risk factor is a somewhat subjective number, but it's important to have a process and to stick with it.
For me, I use the following table for my risk factor.
|1||Reserved List card|
|0.95||Extremely unlikely to be reprinted or banned|
|0.9||Very unlikely to be reprinted or banned|
|0.85||Unlikely to be reprinted or banned|
|0.8||Less than likely to be reprinted or banned|
|0.75||Could be reprinted or banned|
|0.7||Somewhat likely to be reprinted or banned|
|0.65||More likely to be reprinted or banned|
|0.6||Very likely to be reprinted or banned|
|0.4||Just got reprinted or banned|
This part is a little more sensitive as far as divulging it to your seller is concerned. Unlike with card condition (which is something you should come to an agreement on), risk factor is highly subjective. It's important that you feel comfortable with the risk you're taking on, and your seller is likely to disagree with you—after all, they're trying to maximize their profit as well. Because of this, I simply let them know that I calculate the risk of getting reprinted/banned into my evaluation, but do not divulge what that factor is.
Continuing our example of Geth, Lord of the Vault:
|Card||Set||Qty||Condition||Market Price||Shipping Cost||TCG Fees||Card Sold Value||Risk Factor|
|Geth, Lord of the Vault||Scars of Mirrodin||2||NM||$10.00||$0.51||$1.60||$7.89||0.85|
Step 5: Expected Profit
The last step I have when calculating buy price is what I want my expected profit to be. Let's say that for Commander cards above $5 I want a 20 percent profit. Now I need to multiply things together to get a final price offering on a card. I do this with the following equation:
Returning to the Geth example:
|Card||Set||Qty||Condition||Market Price||Shipping Cost||TCG Fees||Card Sold Value||Risk Factor||Profit Margin||Price Quote|
|Geth, Lord of the Vault||Scars of Mirrodin||2||NM||$10.00||$0.51||$1.60||$7.89||0.85||20.00%||$5.37|
So my final price quote comes to $5.37 per copy. This may seem kind of low, but thanks to the shipping cost and fees I have to look at the card as an $8 card and not a $10 card. If you have outs with lower fees/shipping than you can adjust accordingly and likely offer higher buy prices without taking on additional risk or lower profits.
The reason I like using this more methodical approach—as opposed to a blanket approach like what I see on Facebook all the time—is that it accounts for each card individually. Some people prefer to use a flat percent (like 70% of TCG Low), which doesn't consider the unique conditions for different cards.
I am also not a fan of TCG Low as a whole, because it's often manipulated with high shipping costs and isn't a good representative price, especially on cheaper cards. I can't tell you the number of times I've seen $3.5-market-price cards listed at $0.5 with $2.99 shipping. This can allow for some screaming deals if the seller has a lot of cards like that listed (as shipping isn't compounded), but it tends to distort the picture of the real market price.
My method does take a good bit more effort, but it also allows me to control my risk by making sure I factor it in before buying anything. In the end you need to figure out whatever method works best for you and your circumstances, but I wanted to share my method for those who didn't know where to even start.