Insider: A Trial Run in Cash Flow

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Welcome back, readers!

I've previously done an article covering cash flow analysis. Today I will utilize the method from that article to show an actual, real-world cash flow challenge I gave myself for the month of March.

In past articles I've alluded to creating and running my own online TCGplayer store. For the most part my inventory is cards that I speculated on (like Dictate of Erebos, Mana Confluence, and shocks); cards I've picked up in collection buys; and of course my favorite, cards picked out of bulk. This month I decided to straight-up buy cards from local players.

About two days after posting in some local Facebook groups, one guy contacted me on March 4th. He was moving and needed some extra cash for a moving van. He wasn't desperate, but wanted to liquidate some of his extra cards.

I was happy to look through and make offers using the method I alluded to in my article on buying collections. Luckily, he had a good number of $5-plus cards—these are the only ones I've found worth putting up on TCGplayer if you aren't Direct, a route I haven't gone down.

For my cash flow trial (and to keep track of inventory) I created a simple spreadsheet that looked like this:

Purchase Date Purchase Info Purchase Price Card Price Sold At Profit Profit Percent Traded Remaining Inventory Value Notes
- - - - - - - - - -

I will start off stating that this table actually grew somewhat to become what it is above (I added the "Traded," "Remaining Inventory Value," and "Notes" sections) in order to keep track of things better. For the record, the "Price Sold At" reflects the actual amount of money I received from the sale after all shipping and fees were removed.

There were other things I wanted to track, including how much of my initial investment I'd spent, how much I had recouped, how much inventory I had remaining, and my average profit margin per transaction. I also wanted to give myself some leeway should I accidentally spend too much. The plan was to track how many days I was in the red, and apply a -15% profit per month (as though it were purchased on a credit card).

So this part of my spreadsheet looked like this:

Metric Value Description
Total Set Aside $500.00  Amount dedicated to specs
Total Spent $541.55  Sum of "Purchase Price" column
Recouped $390.71  Sum of "Price Sold At" column
Profits Earned $122.66  Sum of "Profit" column (Price Sold At - Purchase Price)
Spendable $349.16  Total Set Aside - Total Spent + Recouped
Inventory $273.50  Sum of "Purchase Price" when there is no equivalent "Price Sold At"
Average Profit Per Transaction 46.21%  Average of "Profit" column, ignoring 0% or blanks
Days in the Red  Manual column in which I track how many days I'm "in the red" or overspent.

The numbers in the table above are accurate to the date I'm writing this (4/2/18), so you can tell I had a pretty solid month with this challenge. Note that I bought from three different sellers, and one accounted for a good bit of the high average profit margin. This seller had posted his sell prices on Facebook, and they were barely above SCG buylist—I purchased almost $80 worth from him and have already sold it all.

One important lesson to draw from this is that Facebook is a fantastic buying/selling platform—in fact, that's pretty much the only reason I use Facebook anymore—and that it can easily be worth your time to scour various groups for good deals on cards. I even created a group for local players in which I list weekly specials, as the fees for selling on Facebook are much smaller. (Basically it's just the PayPal transaction fee, unless it happens to be through friends or family in which case it's 0%—though PayPal does monitor this and you can get in trouble for abusing it).

Recognizing Pitfalls

Back to the sale. After meeting up with my seller, I purchased $154 worth of cards from him and went about putting them up on TCGplayer. My original intent was to put up everything immediately. But over the course of the month I came across some excellent prices on Reserved List cards:

I didn't want to sell these immediately (I think the Cradles especially will continue to move upward and could easily hit $350-$400 in a year). So in these instances I created a separate tab in the workbook for my "Trade Bait/Speculative" pickups.

When doing this, I realized that one of the biggest challenges to monitoring and maintaining proper cash flow is to be in tune with what you can sell—if you need to bring cash in you may have to give up on some good speculation targets. After all, very few landlords will give you a free pass on rent or utilities because your money is tied up in non-fungible assets.

I also realized that it's extremely important to be firm in your cash offer price. One of my local sellers was a friend who'd recently lost his job and wanted to liquidate some extra cards he had lying around. I used the method mentioned above, but I was more lenient on grading than usual and paid more than I should have on some cards.

That isn't to say I won't be able to make a profit should I sell them, but it can be dangerous to mix business with charity. I'm not saying one needs to be stone-hearted, but if you greatly overpay because of a sad story, you may end up in a pinch when it comes time to pay your bills.

Along with what I mentioned above, it's extremely important to be strict on grading when buying cards. Sometimes the difference between NM and LP is minor and you may charge the same for either condition on a given card. But keep in mind that most card selling platforms have distinct grading criteria (whether they actually follow it or not is another story) and as a seller you will be held accountable for poor grading. Your profits can potentially be wiped out if you misgrade a card with a low profit margin to begin with.

Lastly, always consider the metagame shifts with regards to card purchases. One of the cards I may end up losing on is Botanical Sanctum. At the beginning of the month, it seemed like a lot of people still thought that Temur Energy might be a deck in Standard (or at least the TCGLow price of around $7 implied that). As the month continued, the low kept dropping and it's now almost down to what I paid for the cards (which means that, should I sell them, after fees and shipping I'll lose out).

I didn't take this into account when I bought them. I used my equations and made an offer that, if I were to sell them quickly, would net me a fair profit. But there's no guarantee anything will sell (even if you're priced to be on the first page or the lowest for that respective condition) and you can watch profits evaporate if you buy into a card on the metagame downturn.

I will state that I didn't buy it for its Standard application—it's also played in a lot of Lantern Control decks in Modern—but I misjudged how much of the price was related to Standard demand. So for Standard-legal cards it's likely wise to be conservative when it comes to buy prices (more so than eternal cards which tend to be far more stable in price).


I will be continuing this experiment in the months ahead, with the goal of showing you (my readers) how to grow your business and hopefully keep track of all the financials. I realize that this might seem trivial to some, but I've come to learn that there are plenty of small business owners who need help or suggestions on how to track their financials, so I think this series will have merit.

I have every intention of staying in the green and not dipping into the red for this challenge. As I stated, I don't want to pigeonhole myself and miss out on a good buying opportunity—but I will definitely be more inclined to sell at a lower price to limit the number of days I need "credit."

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