Monday: Money Ramp with Zack Alvarado

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Scents of the Trade: Part 2

Last week I began writing the first part of this mini-trilogy which focuses on avoiding bad trade habits; my second installment in the series for MTGPrice.com focuses on the market of foil singles. If you’re truly hungry, like I am, you’ll take the time to sniff out your local market’s needs and cater to your peer players, make yourself part of the store, and make yourself well known. Your local market as a whole is comprised from a pool of other players whose needs and wants can vary drastically from each other; so how does one effectively assess the cards that are desirable within their MTG scene? There are a few approaches to doing so that I will further discuss.

High Market. (c) 2013 Wizards of the Coast.
High Market. (c) 2013 Wizards of the Coast.

Segmenting your market into different customer bases is quite simple once you understand how to do so. Begin by determining the largest demand within your store, and cater solely to that. This focus can range from promotional cards, to Elder Dragon Highlander (EDH) foils, to format staples for Vintage, Legacy, Modern, and Standard (the most common approach). Whatever the largest demand is at your LGS, find it and use it to your advantage.

A niche that I’ve strongly profited from lately is the EDH foil market – not many players stock these cards, but just about every other player with an EDH deck wants something that I have in a binder. Foils, in general, are a bad niche to invest in – I would advise weekend traders and players to stray from acquiring a robust binder of foiled cards. Certain cards, however, are extremely profitable when compared to their non foiled counterparts, as well as other foils on the market. Below is a list of foiled EDH cards that I have traded or sold within the past few months, as well as their normal and foil prices, rounded to the nearest dollar, for the sake of contrast.

Name

 Normal

 Foil $ Diff

% Diff

Vindicate  $    28.00  $    93.00  $    65.00

332%

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Jhoira of the Ghitu  $      6.50  $    32.00  $    25.50

492%

Rishadan Port  $    40.00  $  240.00  $  200.00

600%

Karmic Guide  $      8.50  $    80.00  $    71.50

941%

High Market  $      6.00  $    61.00  $    55.00

1,017%

Reya Dawnbringer (invasion)  $      5.00  $    60.00  $    55.00

1,200%

Rhystic Study  $      1.25  $    23.00  $    21.75

1,840%

Merchant Scroll  $      1.50  $    28.00  $    26.50

1,867%

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Teneb, the Harvester  $      1.00  $    23.00  $    22.00

2,300%

Goblin Matron (7th)  $      1.00  $  112.00  $  111.00

11,200%

There are many more foil cards that are heavily sought within the EDH market, and most are safe areas of investment. While money can be made in Modern and Standard foils, profit margins are small and detrimental volatility is high. To briefly illustrate this point, let’s examine some of the most sought after cards from the new set, Gatecrash. When Aurelia, the Warleader hit the market nearly 2 months ago on Feb. 1st, the foil price was $49.99 on Starcitygames; today, the cost for a foil Aurelia from SCG is only $34.99 – a loss of 30%. Similarly, when Gideon, Champion of Justice was released on Feb. 1st, the foil cost $69.99 through SCG, but now only costs $21.99 from the same site – a staggering loss of nearly 70%!

Cornering a portion of your local market is difficult without acquisition power; so, if you lack enough capital to obtain a stockpile of niche foil singles, a different approach may be better suited. An easy way to turn your extra cards into money is by simply asking other players what they are looking for. I know this sounds elementary, and it is; but chances are you actually have a card that somebody else wants to buy or trade for, and you have to inquire to find out. In the event that another player is looking for a card you don’t own, ask them what they value the card at; then go trade for it, and come back to cash out!

That’s all for now, make sure to check back next week for my final installment in this series: why not to trade eternal format staples for standard cards.

 

Weekly Finance Tip:

[Hang onto your Windbrisk Heights, Rise of the Hobgoblins and Modern Elf cards – I expect all of these to steadily increase by a near 20% within the next month or two]

Until next time,

Zack R. Alvarado
zackalvarado@gmail.com
Twitter: Rh1zzualo

P.S. Franny, this one’s for you brooo!

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Thursday: Common Cents with Aaron Dettmann

Bazaar Trader. (c) 2013 Wizards of the Coast.
Bazaar Trader. (c) 2013 Wizards of the Coast.

Many people are leery of buylisting their cards and selling them to stores and card dealers. Players are worried that they’re getting ripped off and not getting full market value for their cards; however, this is not always the case. There are numerous factors and situations many people fail to think about that can make buylisting your cards a great, profitable transaction.

Here are some reasons why it’s often best to sell your MTG cards to stores’ buylists.

One factor some people fail to consider when trying to sell their cards on eBay or TCGplayer is their fees. eBay charges a 9% total value fee in addition to PayPal charges of 2.9%+$0.30 per transaction. For comparison, TCGplayer charges 11%+$0.50 for a sale. In addition to those fees, you still have to mail out the item; even the cheapest mailing method of a regular envelope still costs $0.46 for the stamp, plus another $0.10 for the protective plastic top loader. Here’s a graph illustrating how much you pay in fees and shipping charges if you sell on these websites:

 Graph comparing Ebay and TCG plus shipping fees Image and video hosting by TinyPic
Transaction cost (y-axis) and selling price (x-axis)

The horizontal (X) axis is how much the item sold for, and the vertical (Y) axis is the cost of the fees and shipping charges. For example, if you sold an item for $10, TCG’s transaction costs would come to $2.16, whereas eBay’s fees + shipping would cost you $2.05. The marked point on the graph is the spot where both websites charge the same amount of fees for the item sold; any item sold for $21.72 would cost you fees plus shipping of $3.45 at both websites. As is evident from the graph, eBay has lower fees relative to TCG on items cheaper than $21.72, whereas TCG has lower fees relative to eBay on items more expensive than that.

These fees eat into a huge portion of the expected profit from a card. I routinely see cards listed on eBay and TCG where the person would receive about the same or even more money if they just sold the card to a buylist from a store. For example, as you can view on mtgprice.com, Venser, Shaper Savant is selling on eBay for $15, and yet ChannelFireball has been buying them for over a month at $12. The fees for that transaction on eBay end up being $2.65, so you end up receiving $12.35 – essentially the same price you would receive from selling to a buylist, not to mention the 30% bonus if you choose to get paid in store credit! Also, the buylist has the added benefit that you don’t have to wait around for someone to buy your item. I can see from the price history of the card for March that people have sold copies of Venser, Shaper Savant for $12-$13, with a few even as low as $9.39 on eBay; if they had all sold to ChannelFireball, they would have made more money than they did on eBay.

It is also often worthwhile to sell your $1-$5 cards grouped all together to a buylist. If you want another way to look at the fees, you can view them as how much of a percent you’re paying on the item you sold:

 Graph comparing Ebay and TCG plus shipping fees as percentage of selling price
Percent of fees paid relative to selling price

This graph illustrates the percentage of fees paid relative to the item’s selling price. The X-axis is again how much the item sold for, and the Y-axis is percentage of the fees you paid relative to the cost of the item.

The most important thing to note is the inverse relationship between the fee percentage and your item value; as an item increases in value, the percent of fees relative to the item you pay decreases. This relationship is most relevant in items $20 and less; the percentage changes very quickly, especially for extremely low priced items. Yes, eBay is better than TCG for selling lower priced items, but if you think you want to sell a one dollar item there, think again – you’d have to pay fees and shipping costs of 98% of what you sold the item for! If you sold that item on TCG, you’d actually be losing money! Fees for selling a two dollar item on eBay would be at 55%, eating up over half of what you sold the card at. Even for a five dollar sale on eBay, fees and shipping still consume 29% of the sale price, leaving you with only $3.54 net income. As the item increases in value, the percentage of fees paid eventually levels off at around 12%-13% for both sites.

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The moral of this story is that small value cards are often worth grouping together and selling to a buylist. Forgo the extra costs so the fees don’t eat you alive.

Thragtusk as of Mar 21, 2013
Thragtusk as of Mar 21, 2013

Another excellent opportunity to sell cards to a buylist arises when you know the price of a card is going to drop, and stores have not yet updated their buylist prices. For example, when the contents of the Gatecrash Event Deck were released, I knew the price of Thragtusk would plummet due to yet another reprinting. For over a week after that information had been released, Starcitygames was still buying Thragtusk at their old buylist price of $15. Fast forward a couple of months and sure enough, the price dropped, and now you can rebuy them for as little as $10. The lesson here is if you think the price of a card is going to go down, it’s often best to sell them right away even if it’s slightly under the market value, rather than trying to eke out every last cent of value out of the card and get stuck with it.

One last tidbit of advice: before you hit that confirm button to sell to an online buylist, visit your local store or dealer to see if they are willing to beat any of the prices; it’s a win-win situation. The store gets some cards they need, and you get a little bit more money for the cards you were willing to sell. I like to set the guideline at either getting an extra $0.25 or 10%, whichever is more, but you can decide for yourself whatever arbitrary criteria you want to follow.

I hope this guide helps you decide the merits of selling your cards to a buylist.

Scents of the Trade – Part 1

by Zack Alvarado

Junk Diver. (c) 2013 Wizards of the Coast.
Junk Diver. (c) 2013 Wizards of the Coast.

Across the web, you can locate many different columns and articles filled with endless salvos of financial advice regarding Magic the Gathering investment ploys and tactics. Amongst all of the fluff, however, is very little – if any – advice about what not do to and how to avoid being burned by bad investment maneuvers. Surely I could put my trade-formula on paper for you to take note of and apply, but I’ve no interest in sharing my homework (at least not for free). However, I am much more willing to share the investment practices that I avoid making; as opposed to the trade-secrets that have continued to feed me. Beginning with this week, I will write a 3 part mini-series about avoiding bad trade habits.

  • Bad Tactic to Avoid #1: Buying bulk lots (Today)
  • Bad Tactic to Avoid #2: Buying chase foils (3/25/13)
  • Bad Tactic to Avoid #3: Trading non-standard cards for standard cards (4/1/13)

Let’s jump right into things and discuss why you should avoid the first bad tactic of buying bulk lots. In general, bulk lots are a great starting point for new players – but that’s where the most value exists: amongst players without large pools of cards to select from; players who’ve been collecting for years tend to have a versatile assortment of readily playable cards, with no need to purchase a bulk lot. Assume I purchase a lot of 200,000 cards for $5,000.00, and want to resell them; the average LGS’s boxes of singles are priced: $0.10 per common, and $0.25-0.50 per uncommon; if I bought 200,000 cards for $5,000.00, I would pay $0.025 per card. Now, if I could sell each card for $.05 (half of the average common price) then I would make $10,000.00 – a return on investment of 200%! But wait, that’s a horrible plan; even if I stand to double my money, I have to consider the amount of time and energy I would need to spend in order to look through the cards – as I assume there are some worth $1-$5 in the bunch, and want to ensure I’m not losing any money when selling them for 0.05 each. Moreso than the effort I must exert to rummage through a fifth of a million cards, I have to worry about the amount of time it will take me to sell these cards; if I manage to sell 10 cards to each person who purchases from me, I still need a total of 20,000 sales before they are all gone – seeing the bigger picture? Good, because my time is valuable, and I hope that you believe yours is as well.

It’s my experience in the long run, that buying bulk lots is a bad investment habit; this doesn’t mean that money can’t be made from bulk lots, but rather that re-selling bulk lots is a bad plan for profit. If you find yourself sitting on plenty of spare commons and uncommons that you’ve multiple playsets of, or never intend on using in decks, then it’s time to make some extra gas and lunch money – here’s how (ok fine, I’m sharing a small personal tactic): organize your extras by rarity first (commons & uncommon), then organize them by color, and then finally organize them by format (vintage, legacy, modern, standard); buy a few 500 count and 1000 count boxes; fill a box of cards with uniform rarity, color, and format – then mark it for sale (1000 Standard Red Commons for $20). I charge $10 per 500 commons, and $10 per 100 uncommons. These bulk boxes bring in steady money for me, and clear my storage space – I can’t complain one bit.

If you catch the scent of a bad investment model, don’t bite down; instead, evaluate how to apply relative business principles within your frame of access, in order to maximize inventory turnover and ultimately, to ‘freshen the scent’ for customers. Well how exactly do you go about ‘freshening’ the appeal of bulk lots? Simple – don’t pick out every card with relative value: nobody wants to purchase bulk Grizzly Bears and Stone Rain with assorted basic core land. I’m not advising that you spice up your bulk boxes with Sensei’s Divining Top or Remand, but, small things like Mana Leak, Rampant Growth, Shock, Terror, and Holy Day are dirt cheap and appealing to casual players. For the record, ‘casual player’ is not synonymous for ‘drooling troglodyte’ – if you want somebody to bite on your offer, make it smell better: stacking garbage onto a garbage heap adds zero definition and increases the stench. This will conclude my weekly entry for MTGPrice.com. I thank you for reading, and hope that you’ll return next week to check out the 2nd article of this series!

 

Money Ramp Weekly Tip:

[Stock up on Kessig Wolf Runs, these things are flying off of shelves!]

 

Until next time,

Zack R Alvarado
zackalvarado@gmail.com
Twitter: Rh1zzualo

Common Cents

This past weekend saw a plethora of Standard tournaments spanning multiple countries. The United States held a 774 player SCG tournament, while Verona and Rio both hosted a Grand Prix.

Let’s take a look at a few of the cards that were highlights at these tournaments.

Prime Speaker Zegana. (c) 2013 Wizards of the Coast.
Prime Speaker Zegana. (c) 2013 Wizards of the Coast.

The breakout card at SCG Indianapolis was Prime Speaker Zegana. Two Bant decks that made the top four each ran three copies of the card. Immediately upon the success of this card, Starcity more than doubled their price of this card; before the tournament they were selling Prime Speaker Zegana for $6.99, and currently Zegana is on their site for $14.99. However, other stores have taken much less extreme measures. Most places have only modestly increased the price of this card by one to two dollars, and you can easily grab these up from multiple places for around $8. This, then, prompts the question of which price more accurately foretells the cards’ future.

Working in Zegana’s favor is the fact that it’s at Mythic rarity, which often have sudden and sustained price increases. Additionally, Zegana had multiple high place finishes in a tournament. However, I think the lower price will be the more accurate one for the following reasons.

  • It is directly competing with the spot Sphinx’s Revelation fills in the Bant deck.
  • Multiple pro players at GP: Verona called Sphinx’s Revelation the most powerful card in Standard.
  • While Zegana performed well at the SCG event, at the more competitive Grand Prix events it was a no-show, and did not make any top 8 appearances.

Now let’s talk about some cards that did well at both Grand Prix tournaments. Human Reanimator, utilizing Angel of Glory’s Rise, made a top 8 in both of the Grand Prix. However, I’m a little wary about investing into Reanimator-type cards, as that strategy is easily hated out if people decide they want to do so. It is difficult for a deck that’s easily hated out to maintain the long term success that will drive an increase in its’ card prices, so therefore I don’t foresee the cost of Angel of Glory’s Rise to go up.

Angel_of_serenity
Angel of Serenity as of Mar 15, 2013

Angel of Serenity is one card that holds similarities to both Prime Speaker Zegana and to Angel of Glory’s Rise. It is Mythic, just like Zegana, and it also found success in a Reanimator deck this past weekend, just like Angel of Glory’s Rise. Unlike the other two cards, however, Angel of Serenity is one that is primed to rise. Far from being a one-trick pony in Reanimator decks, Angel of Serenity has shown in the past that it can fit into multiple deck archetypes. It has a history of being a powerful card, at one time acting as the top end of control decks in Standard. Now it has found yet another deck to fit into, in the Junk Reanimator decklist, which won GP: Verona, had two decks in the top 8 of GP: Rio, and also made the top 8 of SCG Indianapolis. This deck is also more resilient since the Junk Reanimator decks are less dependent on their graveyard than the Human Reanimator lists. Angel of Serenity has also proven that it can command a high price, fetching as much as $25 back in November. The power level of this card, along with the strong showing of the deck this weekend, combined with the resiliency of the deck, in addition to the past price history of this card, leads me to recommend Angel of Serenity as a card to acquire.

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