Today’s article is going to cover some lessons I’ve learned since ramping up my online store’s inventory. Up until March of this year, I was selling mostly cards I had speculated on or picked out of collections, extras that I’d acquired, or cards that had spiked on MTG Stocks. However, I decided in March to take things to the next level and specifically start buying cards for my online inventory.
The first step was determining a method for pricing cards I was going to buy. Obviously, I couldn’t pay retail, but at the same time, I needed to be competitive with other online stores and LGSs. Before buying a card, I needed to have a good understanding of exactly how much I’d recoup off of a retail sale, so I needed to gather all my costs.
After understanding what I’d actually get after covering all fees and shipping costs, I could then look at additional factors that affect a card’s price, predominantly the condition. I added a column to my buylist that includes a factor for card condition (as I’m not going to pay the same for an HP card as I would a NM copy).
Lastly, I set a desired “profit” per card, as without this I’m wasting my time. The next step was deciding how much I was willing to “invest” into my store inventory. I decided to start somewhat small and set a modest $500 goal.
With all this completed, I started buying cards on March 4th. By having my buylist calculator as a Google Sheet, I was able to track all purchases, and then move each card, date of purchase, and price of purchase to a master sheet to track my overall buys. Note that while I used my buylist for local purchases, I also bought cards on Facebook when the sale price seemed like I could turn it into a profit. Here we hit my first pitfall.
Always Run the Numbers First
I purchased a playset of Enchantress’s Presence for $26.50 (I always include any shipping costs in my purchase) on March 12. The TCGplayer Market Price at the time was $10.30, and this was a card I often had requests for from local Commander players, so I figured they would be an easy sell.
I have since sold three of the four, but after fees and shipping costs, haven’t recouped my initial investment. The three sales only made a measly 11-percent profit.
Since that time, it was reprinted in one of the Commander 2018 decks and the average price dropped, though honestly not as far as I’d expected. However, it seems that the Commander reprinting has satiated what demand the market has currently, and I’ve dropped my price to the point where I’m just trying to break even now after fees and shipping costs. I purchased these cards because I thought they’d be an easy sell, but I didn’t run the prices through my buylist calculator.
It’s Business, Not Charity
In late March, one of my friends lost his job and was trying to free up some cash by selling some of his Magic cards. He saw my post and approached me with a decent-sized list of cards he was looking to move. I set my profit-margin goal lower than usual to help make sure I gave him good numbers. I spent almost $270 buying up a decent amount of Modern staples from him, and I still haven’t broken even.
On May 30, I purchased two Raging Ravines for $11.40 each, and on June 18th I purchased four Wooded Foothills at $15 per copy. At the time, I was expecting Jund to see a resurgence in popularity, though I honestly don’t remember exactly why. The buy prices were around 80 percent of the TCGplayer Market Price, but the retail price on both was a few dollars more. Thus, if I was able to sell closer to the average price, I’d make a solid 40-percent profit margin.
I speculated that with any rise in demand from Jund, both cards would move upward, flat-out ignoring the pretty constant downward trend Raging Ravine was showing (and still is).
I realize that this guideline seems quite counter-intuitive for a site that is rather dedicated to speculation. I’m not saying don’t speculate ever—I’m saying don’t speculate with store inventory, unless you want to assume additional risk with regards to running a business.
Buying Into the Hype Doesn’t Always Pay Off
On August 12, I saw on MTG Stocks that copies of Oppression were spiking. Very few copies could be found on TCGplayer, and none for the old price. I started searching for other online stores and located eight copies at the “old price” from a single vendor (to keep shipping costs down). I purchased all eight and then relisted them when they arrived.
On average I have $1.73 invested per copy, and despite the fact that the current TCGplayer Market Price is $6.83 and the median price is $7.01 (for Urza’s Saga copies), there are copies available in the $4.50 to $5 range that aren’t selling. This implies a buyout with no real demand to back it up (hence why copies considerably below the market price still aren’t moving).
Foreign Really Is Harder to Move
Earlier this year in April, Star City Games had a big foreign card sale and a lot of Commander staples were priced way below their English counterparts. I purchased a significant amount (a little under $200 worth) for my online store. I’ve actually sold enough of that inventory that I’m slightly ahead by around $16.50, and still have some of that purchase in my inventory.
So with some moderate success after that purchase, I made another large purchase from Hareruya Games on August 20 totaling $104. Specifically, I purchased 12 copies of Kruphix, God of Horizons, two of Tamiyo, the Moon Sage, and two of Argothian Enchantress, all in Japanese.
In over two months, not a single card from this buy has sold. This despite having cut the price to the lowest on TCGplayer on multiple occasions, and despite the English version of Kruphix actually seeing price increases during this timeframe.
I think the biggest difference between these two purchases was that the SCG one involved a lot of different cards, as opposed to multiple copies of a few cards. While my SCG purchase was about twice as much money, this allowed me to spread my inventory dollars around. I might miss out on making a larger profit if one of the cards spiked, but I also reduce my risk if one of the cards ends up getting reprinted or demand otherwise drops.
Realistic Profit Margins
This experience has also forced me to reign in my expectations for profit margins on Magic cards. For a few years, we would see cards grow in price rapidly and by very large margins, and it wasn’t surprising to reap a 150-percent profit margin on a decent speculation target. However, when it comes to store inventory, that kind of margin is much rarer. I’m perfectly happy when a card I bought for $10 sells for $15 (after fees), netting a nice 50-percent profit margin.
It’s also important for us to remember that in many other industries, profit margins are typically much lower even than that (in many, a 10-percent profit margin is exceptional). This is important because if you try to buy with 100-percent-or-better profit margin expectations, then your buy price will tend to be extremely low and noncompetitive.
I learned a lot of lessons buying cards for my online inventory over the year, and I hope that my pain can be your gain. Don’t repeat my mistakes. If you have any mistakes or tips of your own you’d like to share, please comment below.