Go into debt for buying Magic cards, should I do it?

[Fox]

Be a broker and ask for a 5% fee or half of everything over 16k. No need to borrow money on top of the high risk.

 

[jon.a]

And the same question for you? Do you know Magic?
I guess not, since that Magic has nothing to do with a bubble.

Are you just going to keep arguing until someone tells you this is a great idea?

This is a great idea. A solid score. Bet the farm.

 

[theag]

Sounds pretty stupid to me.

When I read the thread title I hoped this was a joke.

 

[theag]

Do you care to elaborate why?

High risk, low ROI. Not worth it.

And magic cards in general.

 

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[Bananas]

I've sold about 10,000 MTG cards personally and like everyone else is telling you, this is not a good idea. Here is how it worked out for me.

In the 1990s I went to high school, I played Magic, I kept all the cards. I consider the cost of MTG cards to be 0 because it was my old shit, not something I 'invested' in.

In the 2000s I decided to sell all my shit, take all the money, and do something useful with it, because I was tired of being surrounded by shit. My method of selling shit was eBay.

My action was plan was to go room by room, clearing out everything in one room to sell or donate, listing it or donating it, before moving on. In the first room was the MTG cards.

I went through them all, looking for expensive (relative term) cards. By 'expensive' I mean the card is worth more $10. Probably I spent 20 hours doing this. I ended up with maybe $500 worth of individual cards. Then I had to list them, which probably took another 20 hours. At this point I had probably spent a weeks worth of normal working hours. These first listings sold fast.

The second thing I did was, after much research (maybe 2 or 3 hours) decide to sell in repacks. Here is a similar listing to what I did:

http://www.ebay.com/itm/GUARANTEED-...S-Magic-Lot-/251750461368?hash=item3a9d7f2fb8

This guy is doing 1 Planeswalker, 3 Rares, 15 Randoms. The way I did mine was list all my editions (at that time they were about 8 -10 years old) and promise X rares, Y uncommons, Z commons in each pack. I priced them to where I'd make $5 on each sale. That includes covering the cost of shipping, packing materials, eBay fees, and Paypal fees.

I figured I had a good plan, because I didn't have to do any more work until I got paid. If someone bought a repack, I'd count out the cards and send them off, guaranteed to make $5 in just a few minutes of counting cards. I had enough cards to sell about 200 repacks. I listed them. It took a couple of days to start the sales rolling in. I think I had one sale the first day and like three the second day and I decided to raise the price to my profit $8 each. They still went like hotcakes so I upped it again to $10 each to make more on each sale, and slow the speed of the sales.

I ended up making a little over $3k doing this. And that was selling in repacks. Not individual or customized card sets.

It was so much work. I would almost dread the sale happening and then when I would check the buyer would have bought five repacks, not just one, and it would take forever to count out and package their purchase for not all that much money.

In summary:

I sold cards just sitting around my home with 0 investment and it was a ton of work and in retrospect, not time well spent. You are talking about actually spending money to do all of this work for not very much money.

I didn't owe anyone or have all my money in this project, therefore I had 0 anxiety about the cards selling or not selling. You will have all of your money invested plus a loan and increased anxiety over getting sales at a certain dollar point.

In retrospect:

If someone GAVE ME 10,000 MTG, I would not repeat this process. I would most certainly not PAY MONEY to repeat this process. I would have been better off selling my collection in total to one buyer, like your seller is doing to you. I would have gotten less money, but faster and in one lump sum and without all the work involved, and been able to move onto something better, faster.

What would make me repeat this process? If I had a very, very low cost fee, and all the cards were already repacked for me, I would be glad to slam them into an envelope everyday and ship them off at $8 - 10 profit each repack. That would be fine. It is the counting, sorting, and packing that make it not worth it. You are underestimating the amount of work involved in sorting the cards.

 

[Jon L]

I'm going to disagree with some of the more well known people that have already commented. I agree that this is a good idea, just not at this price.

I've never played Magic, but I've known for years now that certain cards sell for a lot of money. I don't see that changing any time soon.

Besides everything that has been said before, you're not a retail buyer. You're buying this wholesale. 25% off is not a wholesale price. If this guy wants to make $20k, then he should sell the cards individually himself.

I used to buy store returns from the home shopping network by the truckload (50' semi truckload) and sell them on ebay. About 10% of what I bought would sell immediately, and for a huge percent profit. ("Huggable Hangers" were pure gold...go figure). I decided on which pallets to buy based on what I could profit in the first week or two. If the stuff I knew I could sell quickly would make me a profit on the entire pallet, I would buy the pallet.

Some of the stuff sold the first week, Some of the stuff would sell in a few weeks. The rest, I would sell to liquidation.com and let some poor sap buy it from me.

You'll likely find that this set of cards is like that. Do the same kind of analysis that I did...if you know (and you better be damn well sure) that you can sell 10-20% of the items in a few weeks for a total of $10K, then use that as your revenue amount, and offer a price for the whole collection based on that...if the $10k figure is accurate, I'd offer $5k. Then...you're pretty safe. AND...you'll eventually sell the rest of it, and those extra sales are gravy. But the rest will also be a pain in the a$$ to get rid of. You will probably have to liquidate the last 25%-50%.

...

People are saying that the cards have no intrinsic value, and while that is true, they do have value now. They will have value in a month from now. They will probably have value in 6 months from now. Beyond that, it starts to get more and more risky. That is why you want to make your money fast, and is also why, when evaluating all these cards, you don't want to count the value of the cards that will take more than a month or so to sell.

Also...the effort required to sell these things will go up exponentially as you get rid of the more desirable cards. You'll make $1000/hr on the first few cards you sell. At some point, you'll be making $3/hr. Some time before that, you need to liquidate the rest of the cards. Its far better to sell 1000 cards for $100 than spend 100 hours selling them for $500.

 

[jon.a]

I don't know magic cards. I know some coins. I'm buying special pieces now that I expect with a little work on my part to triple in 3 to 5 years. But, I'm not borrowing to buy them. And, I'm spending several 100k. I'm like Mr. Wonderful, a disciplined investor. You on the other hand sound like a child.

 

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[PureA]

i can't believe this is actually a thing

 

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[sQri]

Thank you again for your posts @eliquid, @smartman, @Jon L, @RHL, @Bananas.

It looks, after reading all the posts in this thread, I was very stupid and the idea was not well thought.

I think, the problem is my affinity to Magic and hustlin' and forgot the logic...

I'm kinda proud, that I don't have any debt and only buy stuff if I can afford it, this is obviously the opposite of it.

There are some other ideas in this thread, like selling the cards for commission or be a broker.
I really like the commission idea, I will ask the guy, if he is willing to do it for a certain percentage.

There are also some posts, that I don't have any buyer or I don't know the condition, that the cards are in.
That is obviously right, not having potential buyers is bad, but from my experience as a seller/buyer of cards not the huge problem.
And certainly I would have looked at the collection before buying it.

So in conclusion, I learned a lot of important things due to this thread.

 

[funkj25]

As others have said, don't unless you're lined up to liquidate them quickly.

I did play magic several years ago so I'm familiar and I also hustled buying selling collectibles for about 18 months. The MINIMUM I would want to get is 50% value so in this case 10k. But typically the larger collection of stuff I bought at a time the more I would want to stretch that margin to reduce my risk so in this case I would personally not offer anything over say 8k on a few conditions.

1. You're already familiar with the business of selling magic cards and really understand your turnaround time/shelf life/how long you'll sit on them before they sell.

2. I could get rid of them in 30-40 days MAX. 14 days would be preferable, but for the value of your return, a month would be acceptable to me personally.

3. The 20k valuation is based on the lowest recent sold for prices you can find (use eBay as a guide) not median or high valuation prices.

The longer you have to sit on something the less you'll pay for it. If I knew I was going to sit on that collection 6 months I'd lower my offer even more down to the 5-6k range depending on some of the factors listed above.

The thing everyone is dancing around here and hasn't said outright is that you have to be product agnostic. Yes you're familiar with magic cards, but if you can put your money to a better use making 100% return on it for example (see the various hustle threads by grumpy cat) you're much much better off.

In short, it's probably a bet you'll regret making.

 

[JAJT]

I know magic cards.
I own magic cards.
One of my buddies opened up the best board game store in my city focusing heavily on magic cards.

I would still not take this deal.

You are going into debt on a $16k purchase for a max potential upside of $4k. That's retarded in my eyes.

If you had a business, were doing well, and had some "throw-around investment/hobby funds" - then yes, that makes a lot of sense. You enjoy it, could make a bit of scratch, it would be fun, and you'd have the money to lose. Sure. Go nuts.

But a $4k upside + debt + uncertainty = I wouldn't even consider it.

 

[Kak]

Although. We just told him how to go about this with zero risk and no finance charges.

 

[RHL]

Threads like this keep coming up and I keep getting PM's asking questions about side hustles like this.

If I had a week I couldn't list everything wrong with this deal. For one thing, magic cards are a commodity with no value floor, hence the immense wisdom in @jon.a 's wiki link. A van can transport goods, a jackhammer can break ground, the cards are only valuable while people want them. A Van will never drop in value from $10,000 to $0.25 overnight and without damage or destruction (and then you can collect probably $7000 minimum in insurance as a result), but that could literally happen to magic cards (and yes, I used to sell these in high school, it was my first "business" experience). It's just a piece of cardboard. Ask people who bought first edition charzards for $500 at the height of the craze how that investment is doing now. "Nothing to do with a bubble" indeed.

You're massively under-valuing the fact that you can buy $5000+ in cards in cash outright. How many magic players can spend four or five figures on cards at once? Not many. Because this guy is too lazy or too desperate for cash to break up the lot properly, he needs to pay the "tax" for having the next guy do that. I agree with Bio 100% that 8 would be my absolute ceiling, and I'd probably go with 6 as an opener.

The other thing: If your hustle is untested, do not do not do not do not do not go into debt over it. You will lose your shirt.

 

[Kak]

High risk, low ROI. Not worth it.

And magic cards in general.

And magic cards in general hahahahahaha

 

[eliquid]

Here is some general advice I'd like to give you. Think about each thing I put below carefully:

1. When you buy something as an investment, you always need to have an upside. If not, reconsider what you're doing.
   So what's an upside in my view? When I buy a house for an investment, am I also getting some extra land thrown in at a discount? When I buy a company, am I getting the talent within it too or the IP that comes with it? What's your extra "upside" in the deal?
   
   
2. You're wanting to spend $15-$16k on an investment. What else could you use that $16k for instead? Have you weighed that option yet?
   .
3. Anything that can get slightly wet and then be damaged, prob isn't a good investment ( reason I don't deal in comics or ball cards ).
   .
4. Your margin is 20% and your markup is 25%. Mom and pop retail stores selling bicycle pumps do better.
   I would offer him no more than 50% of his asking or broker it for 10%
   
   
5. Can you take advantage of currency arbitrage?
   Can you sell these in the UK for higher amount and then convert that to US dollars and come out ahead more?

 

[Red]

There's a whole lotta ball bustin' on OP here & I feel it's unnecessary.

The item(s) to be sold is irrelevant. So long as the individual pondering the exchange truly has a realistic knowledge base of the market value of the item. If that's accurate, the item(s) is irrelevant. The only person who has offered any legitimate insight thus far has been @biophase & his explanation of reasoning out the apparent sheer numbers of transactions needed vs the customer base. Good things to ponder.

That being said, if someone tried to sell me a house that I knew I could make 25% on (or part out things like appliances, parcels of land, whatever), I might be inclined to take them up on it if I felt it was worth my time. Is $4k outlined in this transaction worth the OP's time? Only the OP knows this. Maybe OP can purchase on an option & not take on debt? Maybe he can sell them for a percentage/commission? There are creative ways to go about something like this that can be a win/win for all parties involved that don't include OP sticking his neck out there to the tune of $16k. If OP usually makes $4k in a month, but he can sell everything he needs to with 20 hours worth of work, I'd say that's a pretty damn good use of time if you can side step the risk of going in to debt.

Maybe this is opportunity is completely within the OP's area of expertise & it could be very worth his time. You guys telling him it's stupid or idiotic need to step down off your pedestals. Take a moment to try & see the options. I don't know if it's a good idea or not, I don't have all the information to make that call. Just because I don't know jack shit about Magic cards doesn't mean this might not be an opportunity for him.

 

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[ryanbleau]

Let me tell you a story about the smartest man I ever met. He's a pig farmer in Nevada. He was having a hard time making ends meet and feeding his pigs cost a small fortune. His wife tells him they need to get away so they spend a weekend at a vegas casino . He sees all the buffets and all you can eat joints there and makes a connection no one else did: They were filling the landfills with "usable" food. At least usable enough to feed his pigs. At first he thought he could buy their garbage waste at an incredibly low price and save money feeding his piggies . But the first casino he approached offered to give it to him free, and so did the next , and the next and the next. Eventually the entire strip was sending scrap food and kitchen waste his way. separated from the regular garbage. With more food for the pigs he raised more pigs and made more money selling them back to the casinos that gave him the feed for free. Now the farmer has a problem . An overabundance of pig shit . He has an idea. He starts making plant pots for growing vegetables from the dried pig crap. The market explodes and he makes so much money off his new idea. More than selling the pigs as meat. He literally turns other peoples garbage into crap and makes money off of it. Your magic card money making idea is worth less than pig crap. Feed them to a pig and do something with the results.

 

[RazorCut]

High risk, low ROI. Not worth it.

If you KNOW you can get AT LEAST 20k for them within 6 months tops then I would offer 4k and leave it at that. No negotiation, just a one time offer. Take it or leave it.

Better yet forget it and use the 5k you have to build something sustainable and worthwhile.

 

[DeletedUser394]

Please don't.

Such limited upside for such potential disaster.

 

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[DeletedUser394]

i can't believe this is actually a thing

Nerds gonna nerd.

I'm not criticizing though, because if given the opportunity I would gladly buy anything and everything related to Star Wars.

 

[biophase]

This issue isn't even about borrowing money to pay for the cards. It is that the deal itself is not good. It's not because of the % margin either.

If you were asking about purchasing a $20k car for $16k, this would be a difference discussion. The main point is that a car, is a single transaction. Its value can be fairly accurately verified and corroborated through other ads, dealers, etc... Your pool of car customers is huge.

With your cards, you have to account for the time it takes to complete 50+ transactions and your customer base is alot smaller. So you have less customers and more transactions with these cards vs. if you had a car, you have 1 transaction and more customers.

 

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[Veloce Grey]

No thats not high ROI for this risk.

Do you know Magic? (I just couldn't resist)

If not please don't bring any of your scientific quackery or reasoning nonsense into this discussion.

 

[vinylawesome]

 

[ZCP]

Put the passion you had for arguing this is a good idea into pre-selling them and you would have already made $4k w/o putting in any of your own money......

 

[biophase]

If you really wanted to do this, offer your $5k for them all. $16k is way overpaying for them. Maybe go $8k Max.

You have to ask yourself why he's selling them all in one shot for $16k if they are worth $20k. Is this guy just willing to toss away $4k? Must be a reason.

And for the record I don't think it's a good investment at any price. Too much risk.

 

[theag]

@theag's initial reply of "lol Magic" wasn't helpful

You're wrong.

 

[Unknown]

Let's ignore the fact that it's magic cards (yes I played Magic when I was a teenager if that somehow validates my opinion). Investing 16k hoping for 4k profit is not a good idea. Getting into debt to try and earn that 4k is an even worse idea. There are so many variables involved. How do you plan to sell them? If you're going to use Ebay then you need to figure in their fees and your shipping cost. If you want to sell them without Ebay, then how are you going to find your buyers? It's not worth the trouble. The only reason to buy Magic cards or any other collectible is because you like playing that game.

 

[smartman]

I know this market better than most everyone here, unfortunately. Spent 3 years as an executive at a ccg wholesaling company. few things you need to consider here
-where are you selling these cards if you buy them? Breaking it up on ebay? you'll lose nearly 15% of final sales value
-condition of cards. your boy is saying that whatever card is worth 600 bucks, but yes, that card is only worth 600 bucks if it has a psa grade of 9 or higher.
-the fact that your average customer cancels 10% of their orders due to money mismanagement.
- shipping supplies. yea, i know it should be considered a minimal cost of business, but they add up to at least an extra 300-600 dollars when parting out tens to hundreds of thousands of cards
-you are not buying a product to flip, you are buying a job selling MTG singles.

The good things that can come of this-
-you will learn the value of these cards by sight, which in of itself is a very marketable skill. Many retailers will hire MTG buyers for conventions to buy collections on the spot. They usually pay these people in more MTG cards, dominos pizza and monster energy drinks, but you can set yourself up to be a cut above and demand more money just by having people skills
-there's a chance to make a little bit of money if you don't already have a job, if you can negotiate that asking price to less than half
-there are a lot of companies that will buy bulk commons, so you don't have to sit on the leftovers once you've made your profits
-MTG cards don't take up much space and are easy to store compared to say, car parts
-you could use this as a chance to start your very own MTG singles website, which would give you a platform to sell and build upon. This is something there are many of already, but VERY few do a good job of 1)customer service 2)having proper supply 3)good looking websites

going into debt to your parents for this sounds totally miserable to be honest. borrowing 3k that can be recouped in 2 weeks is a different story though. figure that part out.

 

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[Mattie]

This is just from my experience. I've been around people who get into collections and cards. Really you can spend a lot of money, but I've never seen anyone be successful with collections or cards. You really have to have some special item or card that is worth tons of money. And it's almost like playing the lottery. There is not guarantee, and sure you might be able to make a few hundred here and there if you sell them to the right people. I watched two or three card and comic shops go out of business. Basically it served teenagers and kids, more than adults. I know they sell in stores, but really how you find the right audience for magic cards unless you have the money to advertise, market, and unload them at events.

I've seen them at flea markets, card shows, specialty stores, and online. My son buys them online. And I've always hated them. There usually all over the floor, a piece of paper that gets bent up, and stored in a box. I never bought them, but other people did for him. I don't think I would invest that much money in cards of any kind, but I suppose that's your choice and whether you have a good way of getting rid of them fast. Most of the time they end up in some storage unit and some antique dealer or collector comes along and bids on them in an auction probably for a few hundred dollars. Even Meijers, K-mart, Target, and other stores end up putting them on clearance for cheap because they can't sell them all.

 

[ZCP]

Why aren't you selling them now and confirming market instead of posting whether you should do it or not? Sales orders solve everything.

This is the same as any business deal...... Does it solve a need? Is there market? What is the payback? What is the ROR? What is the risk? Is there any easy way to make each of those better?