Collection Buying 102: More Rules

Tweet by SaffronOlive // Feb 21, 2015

finance collection buying 101

Last week I published the first part in my series about collection buying, so if you want to learn where to find collections and the first half of the collection buying rules, make sure to check it out. Since I covered a lot of the background in that article, I'm not going to go back over it all today. Instead we'll just just right back into the rest of my rules for buying collections.

6. Learn to Love Bulk

Bulk cards are one of the secrets to turning a profit for two reasons: First, many people selling collections misunderstand what cards are truly bulk. While pulling out Lava Spikes and Vines of Vastwood from bulk boxes isn't nearly as glamorous as sorting dual lands, it is often just as profitable. Few and far between are the people that will give away a Tundra for nothing, but there are many people that will leave valuable commons and uncommons — which combined equal a Tundra — in their bulk boxes. The second reason is, especially for players who are not interested in the finance aspect of the game, managing 25,000 bulk cards is a lot of work. If you are going to buy and sell collections, you need to be willing to outwork the person you're buying from. Digging though massive piles of junk cards to pull out the ones worth a quarter or a dime is a large part of the job. Thankfully I enjoy sorting cards, and after doing it for so long, I've gotten rather good at it. While I haven't actually tried to measure it, I'm pretty sure if you give me 1,000 bulk cards, I'll be able to pull out anything I can sell for $0.10+ on the first pass with ~95% accuracy.

However, this too is an acquired skill. When I first started buying collections, I was horrible at sorting bulk. I was pretty much dependent on typing everything into a website, and this model of sorting is simply not sustainable. I also skipped over way too many cards of value. In the early days, I'm sure vendors loved it when I sold them valuable bulk commons by the thousands and probably spent the rest of the day laughing at my incompetence.

I had a reminder of this recently when, despite my better judgment, I bought a massive Yu-Gi-Oh collection. I knew the collection was profitable because the seller had it listed for less than the price I could bulk it out for. The problem was that I know nothing (like absolutely nothing) about Yu-Gi-Oh. So I spent an entire weekend sorting cards by set, and then the next weekend looking up each card one by one. I ended up making a decent amount of money, but it was a miserable two weekends. I wouldn't do it again.

Bulk is always worth at least $5 per thousand. If you do it right, you can get get between $8-$10 per 1,000 random cards. The trick is to buy bulk for no more than $5/thousand, pick out another $10 (or more) worth of $0.10-$0.25 cards to sell individually or in playsets, and then sell the rest of the cards ("true bulk") for $8-$10 per thousand. As such, you need to try to make sure that you're not buying bulk from someone like me (who already picks it clean) and instead from a player or collector who is more likely to leave some meat on the bulk bone. Plus there is no greater feeling in Magic than sorting though bulk and finding a Force of Will or Scroll Rack.

All of this to say, expect there to be a sharp learning curve when it comes to sorting bulk. Expect the first collections you buy to be a lot of work. But don't worry, it does get better, and once you are good at picking the quarters out of the bulk box, it is also very profitable.

7. Read what isn't written, hear what isn't said

The easiest way to explain what I mean here is with a real life example. Here is the text from an ad on my local Craigslist along with some pictures of the collection. Look it over, study it, think about what is said (and what is not), and try to determine if you should make an offer on the collection. If so, how much would you be willing to pay.

I'm selling a huge magic the gathering collection. I have over 30,000 cards for sale. Everything from 1,000 rares and up to 200 mythics or more. I have a lot of single color collections for instance i have all 15 gods, all 11 avatars and so on and so forth. I have a ton of rare and legendary artifacts as well as common and uncommon artifacts. I also have over 1,000 lands and a bunch of multicolor cards as well. And i also have premade decks too. 1,500 is what im asking but we can negotiate the price considering that i've paid over 3,000 for the collection of rares and mythics alone. Call or text my cell anytime day or night for more information and ask for ****. This is a really good collection for the right person and you are definitely making out huge. I'm the one losing a lot for selling this collection for the price I'm asking but i have to sell them as quick as possible.

So what does this post tell us about the collection? Well, some things are obvious because they are stated explicitly. The seller wants $1500, but is willing to negotiate. There are 30,000 cards, 1,000 rares, and 200 mythic. The seller mentions lands, artifacts, and multi-color cards in specific. He also thinks he is offering a good deal (not that a seller saying "it's a great deal" really means much). However, there is a lot more information to be gained by looking at what is not stated directly. For instance:

1. This is very likely a personal collection and not some dealer trying to dump a collection he bought and picked over. For me, the tip off is the "avatars." No dealer I know is going to sell a collection on the strength of Molten Primordial. The fact that the seller took the time to line up all the avatars, take a picture, and mention them specifically suggests that he is likely a casual player. This could be either good or bad. On one hand, since he probably isn't building tier one decks, there might not be any high-end staples. On the other, he could have a bunch of Zendikar fetchlands mixed in with the "1,000 lands."

2. The seller probably isn't on top of card prices. The avatars are one clue, but "I've paid 3000 for the rares and mythic alone" is another hint. An experienced dealer knows the price he or she paid for the cards isn't relevant here.

3. The seller likely started playing in the past few years. Most of the rares we can see are from Return to Ravnica block through Theros block. Although some other sets are sprinkled thought the binder pages, I would guess a large majority of not only the rares and mythics, but the commons and uncommons as well, are from the past three years.

4. The seller likes preconstructed decks and value packs. We see not only a Walmart promo Angel of Glory's Rise, but other rares from preconstructed decks including Journeyer's Kite, Niv-Mizzet Dracogenius, and Derevi, Empyrial Tactician. This means we can expect to find commons and uncommons from various Duel and Commander decks in the collection (which is actually a good thing as these versions are often worth more than the original printings). This also means that some portion of the 200 mythics and 1000 rares will be bulk from these sets.

5. The barcode on the side of the small bulk box is a bad sign. This is how vendors sell and ship bulk deals like "1000 commons and uncommons for $12." Vendor bulk is usually the bulkiest of bulk.

6. The bulk cards probably are not worth very much. While most recent commons and uncommons are low-value, Theros block and Cores Sets are especially bad on this front. While the one Ivory Cup means there are probably a few older cards in there too, the best we are hoping for are cards like Stoke the Flames, Azorius Charm, and Banishing Light.

7. Recently rotated collections are the worst because some sellers tend to prices their cards as if they were still Standard legal.

8. It's hard to imagine the cards in this collection adding up to anywhere near $1,500. There isn't a single card worth much of anything in the pictures with the value topping out in the $5-$10 range. We do see an Eidolon of the Great Revel, but just to break even we would need to find 250 more cards at that price point, or some very valuable cards amongst those not pictured. What valuable rares and mythic can we even hope to find? Maybe some shocklands? Mythics like Sphinx's Revelation that used to be worth something before they rotated?

10. Still, the bottom line is there are $100 of bulk rares, another $100 in bulk mythics, and maybe $150 in bulk commons and uncommons. Given that some of the rares/mythics are above bulk, I'd be hoping to pay more around $500 based on the cards I can see. So, my path forward is calling the seller, trying to feel out if there are any other valuable cards in the collections, and getting a sense of just how much he is willing to give on the price. He does sound motivated to sell, so maybe he is just shooting for the moon by asking for $1500 and would be willing to take $500 in cash today. But if his idea of negotiating is going from $1500 to $1350, then I'm not interested in making the hour drive to look over the collection in person.

8. Look for accessories.

Most of the time, when you buy a collection, you get everything: life counters, deckboxes, binders, sleeves, toploaders — everything. This is why I currently have a box full of 5,000 9-pocket pages which someday (hopefully) I'll figure out how to turn into cash. Old Magic binders have value, as do some of the higher end new binders (even when used). Spindown life counters have value. You can usually sell newer ones in bulk for a couple dollars each, and life counters from older sets or premium products can be quite valuable. Deck boxes are more hit-or-miss when you sell them individually, but they can make great add-ons for bulk collections. When you are selling bulk commons and uncommons in a competitive and cluttered market like Ebay, the deckbox can be a reason for the buyer to choose your lot over the rest. Even empty fat pack boxes have value, especially those from older sets.

I don't include accessories into my calculation when making an offer, and neither do the buyers since the accessories aren't useful once the cards are sold. This makes accessories "free" money. Even some of the stuff that isn't worth selling is pretty sweet because you end up with some cool goodies for yourself: like vintage long boxes for instance. I use a black mana symbol longbox like the one below to hold the cards that will someday be part of my cube.

9. Know Your Outs

I mentioned a little while ago that I had 5,000 9-pocket pages sitting in a box. The good news is that most vendors sell these pages for $0.29 each or $15 for 100. This means my box represents maybe $1000 in value (at least in theory). The bad news is I can't sell the damn things; there just isn't much demand for used 9-pocket pages. So if you see an ad on Craiglist offering 5,000 pages for $200 dollars, not only is it probably me, but you should probably think twice about buying. If I can't sell them, you probably can't either.

The idea here is that you should have a plan for where, how, and when you are going to sell the cards from a collection before you purchase the collection. There is a big difference between trading cards to other players for full retail prices and selling to a buylist. There are less pronounced differences between buylists, Ebay, and TCGPlayer, but there are differences nonetheless (I'll talk more about selling cards in part three of the series). The point is, if your goal in buying a collection is to make money, have a plan for how you will monetize it. Nothing feels worse than buying a collection, spending days sorting, selling, and shipping the cards, only to find out when you're done that you paid too much and only broke even (which is actually a loss when you consider the opportunity costs, time, and effort). Speaking of costs, rule 10 is to consider all of them.

10. Consider All the Costs

I've hinted at this concept throughout the article, but I want to make sure I am explicit — there are a ton of hidden costs that come along with buying and selling collection. To actually turn a profit, you have to make sure you calculate these costs into your offers.

Time

The larger the collection, the more time it is going to take for you to sort, sell, and ship. I would gladly pay $1000 for a Legacy deck that I could flip for $1200 because the time cost is minimized (no sorting and minimal shipping). On the other hand, a $200 profit on a collection consisting of thousands of just-above-bulk rares, commons and uncommons is unacceptable. Sorting these cards takes time even if you are good at it. Listing all of these cards takes time (whether you sell to a buylist, on Ebay, or on TCGPlayer). Shipping all of these cards takes a lot of time.

While I can't tell you what is and what is not worth it; how much time you are willing to invest for $200 is highly dependent in your situation (e.g. a college student on break might be fine spending two or three days for $200, while someone with a full-time job probably will not be), I would encourage you to at least consider time costs before buying a collection.

Shipping

Unless you are selling locally, shipping is a huge part of the equation. If you are selling cards as singles or by the playset, the absolute cheapest you can ship a card is for the price of a stamp, which is $0.49 in the US. Shipping without tracking is risky, although in my experience it is still worth it for low value ($2-10) cards/playsets. In my experience with Ebay, somewhere around four in every 100 people will claim they did not receive the cards if you ship with just a stamp. This amounts to a loss of between $10 and $40 dollars depending on the exact price of the cards. Since the cheapest shipping option with tracking is over $1, on average you save more in shipping than you lose by the handful of people filing false claims (or the post office actually losing the cards).

With more expensive cards, always pay for tracking. If you are sending really expensive cards, it may be worth it to pay for delivery confirmation which requires the buyer to actually sign for the shipment. However this can be problematic if the buyer is never home since the postman/woman won't just leave the cards and the buyer will have to get to the post office to pick them up.

For bulk and buylist orders, flat rate is almost always the way to go. You can fit 5,000 cards in a medium flat-rate box which ships with tracking for just over $12 to anywhere in the US. Small flat-rates can hold around 300 cards and cost about $6 with tracking. Try to use flat rate shipping efficiently. If you are thinking about selling 2,500 bulk cards (which would require the medium flat rate) you are generally better off waiting until you can sell 5,000 to maximize your shipping efficiency.

Condition

Condition isn't really a cost, but since it has a large impact on how much money you can get for your cards, it should be considered as such. When you are buying random collections, the odds of all the cards being near mint is slim. SP or MP cards are going to fetch you less (sometimes significantly less) when you sell them. If you are selling your cards to buylists, learn how the vendor grades the cards and how much they deduct for played cards. In some cases you are better off taking less money for a MP card from a vendor that deducts less for condition than taking a higher offer from a vendor that grades more harshly. Remember, your profits are what the vendor pays you and not what their buylist quotes you. Generally speaking, if you sell a large mixed condition collection to a vendor, you'll end up getting about 75% of the quoted buylist price. With some vendors you can expect 80% or 85%, with others it can be a low as 65%. Some vendors do not accept played cards at all, and if you send them cards below NM, they will return the entire order, often while keeping a couple cards for "shipping and handling fees." I just avoid these vendors altogether, although if all your cards are in pristine condition, you'll probably be fine. If you want to learn more about specific vendors, you can check out the Great Buylist Review I published on Reddit last fall.

Condition also matters on Ebay or TCGPlayer, so make sure you learn how to honestly appraise the condition of the cards you are selling. Nothing is worse than dealing with a bunch of angry buyers who grade the cards you sold them as NM as SP (or worse). At the same time, especially on Ebay where you can take pictures of each card (another "time" cost), you can let buyers judge condition for themselves. You'll often find people are perfectly happy paying NM prices for a card that is actually SP.

The condition of cards can make offering the right amount for a collection extremely difficult. A few months ago I found a local on Craiglist selling a collection of old cards. He hadn't played in 15 years, had no idea what his cards were worth, or how much he wanted for the collection. The entire collection lived in one huge unorganized mass at the bottom of a Rubbermade container. As I started to dig through the cards, there was both good and bad news. The bad news is the cards were incredibly beat up. I'm pretty sure this guy's playgroup not only had something against sleeves, but had playmats made of sandpaper. I thought that most (and hopefully all) would qualify as "tournament legal," but I also knew they would receive the lowest passable grade from anyone I tried to sell them to. This would not only cut into the sales price, but also minimize my market (some people only want NM cards). The good news was the collection contained the following cards, all from Revised: 1 Badlands, 2 Bayou, 3 Plateau, 1 Savannah, 2 Scrubland, 3 Taiga, 4 Tropical Island, 3 Tundra, 1 Underground Sea, and 2 Volcanic Island.

So how much do you pay for 22 Revised duals that look like this:

I debated this for a long time. I really wanted to make this dude a fair offer, even though I got the sense I could have given him $200 and he would have been thrilled. Like I said in part one, when someone is honest about not understanding the value of their cards (which this guy was, along with being super nice) I do everything I can to make a fair offer. My problem was I truly didn't know what a fair offer would be, or if I could even sell the cards because most were walking a very fine line between HP and Damaged. This is actually super important since you can play your HP Underground Sea at an SCG Open, but can only play a Damaged Underground Sea at your kitchen table.

In the end, I paid $35 each for the duals, and got the rest of the cards (which were mostly bulk) as a throw in. Whether this price was fair or not, I'm still not completely sure, but I didn't have any problem sleeping that night because I knew that given the difficult circumstances, I really tried to do right by the seller. Long winded story aside, the important lesson here is that if I had just paid buylist prices for this collection, I would have lost a ton of money based on condition alone.

Supplies

If you are going to sell singles on TCGPlayer or Ebay, you are going to have to invest in the supplies necessary to ship cards safely. This includes top loaders, sleeves, tape, bubble mailers (for expensive cards), ink for your printer, and whatever else is necessary to get your cards safely from you to the buyer. While many of these costs can be minimized by buying in bulk, they can never be eliminated completely, so make sure to take these costs into account.

Opportunity

Not many of us have an unlimited budget to spend on Magic collections, so the principle of opportunity cost can be very important. For example, say you have $1000 you can spend on collections, and you notice a $900 collection pop up on Craiglist. You go and look over the cards and feel (after considering all the costs) that you can probably make $200 from the collection. But it will probably take you a couple weeks to sell and get paid for the cards. While making a $200 profit is fine, what happens when you notice a $500 collection that you can sell for $1000 a couple days later? Buying the first collection for a meager $200 profit could cost you the opportunity to buy a collection that would make you twice as much profit.

Now I'm not saying that buying the first collection is wrong, because it's possible that the second collection never comes along. But since we are dealing with finite resources, it is important to think about what opportunities you may be giving up when buying a collection.

Incidental Costs

Incidental costs includes every other cost that isn't included under the other headings. The two most important and impactful are likely gas money and wear and tear on your vehicle. For me, driving two or three hours each way to buy a collection is not uncommon, and if you are making these trips regularly, these costs add up. If you want to go really deep, you can also consider things like the cup of coffee you bought for the road, or lunch on the way back as incidental costs (but if you were planning on spending for these things anyway, it probably doesn't matter much).

Conclusion

Anyway, that's all for today. I think this covers pretty much everything that goes into buying collections (if I'm forgetting something important, please let me know in the comments). Next week I'll be back to talk about the process of sorting, selling, and shipping the cards you buy in part three of the series. Until then, make sure you give me your thoughts in the comments, or on Twitter @SaffronOlive.