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

[smartman]

there's even a star wars CCG that plays just like magic. also incredibly collectible.

 

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[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.

 

[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.

 

[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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[Fox]

If you had 200k of your own money I would maybe suggest you buy half, flip them, and then buy the other half and do the same.
Having to borrow other peoples money, especially close family members money, to do a deal that is highly risky is not smart. Maybe it works this one time but if it doesn't you put a lot of strain on relationships when you use their money so carelessly. Are they going to be okay when they are down 1000s if things go well? Are you going to give them any interest if it does go well or do you just use their money for your own gain?

Two things that can do with very little risk that are multiple times smarter with way less risk:

- Broker the deal for a % like I already mentioned
- Create a magic card sales website and charge people 5% service fee for providing an excellent sales platform

This isn't about Magic Cards its about using what you already have instead of expecting people to carry the risk for you. There is no need to borrow money especially when those people have no reward and even more risk. Its just plan selfish to be honest.

Lots of good advice here man. I hope you do broker the deal and make some quick money.

 

[ZCP]

Have you asked the dude what his 'lowest price' is? Have you asked dude if you could stick pick the set and pay him for the top 25%? Have you posted a craigslist ad and gathered responses? Have you put together a spreadsheet to prove with math that the deal is good? Have you made a low ball offer to see his response?

Business deals should be science / math, not hope!

 

[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]

lot of mental masturbation over the thought of $4 grand. possibly some actual as well. He's looking for a lot of back slapping and praise for finding this amazing deal. If your gonna do it , do it. If not put your $5k to better use.

 

[daivey]

Hi,

I was recently told by a friend, that one of his friend plans to sell his huuuge Magic the Gathering collection (with Power 9 and all Duals, if you now what I mean).
I have a lot of experience in buying/selling Magic cards, so that is nothing new for me.

The guy wants around 16k Euro, whereas the collection is worth around than 20k.
Obviously, I have to assure myself, that the prices and cards are ok.

Now the problem is, that I only have saved up around 5k, so I need at least 10k, which I can ask my parents for, but have inhibitions.

For the decision, I thought to myself:

• Whats the best that could happen: I sell the cards for more than the 20k, sell them quickly and make some easy money
  
• What the worst that could happen: I sell the cards for way less than the 16k, it take years to sell them, am in debt to my parents for a long time
• Normally, it takes a while to sell all the cards and I can pay my debt of regularly.

I know, in the end, it is my decision, but I like to hear your opinions.

Thanks a lot.

this is a joke right? obviously troll bait.

 

[eliquid]

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.

That's just it though, he didn't present those options.

He presented going into debt $10k and using $5k of his own money too. All for a possible chance to make $4k. He is putting in 4x what he *might* get back, and he is prob. gonna have to do many transactions, pay taxes, shipping and packing, etc too for it all.

No buyer lined up, doesn't know condition of product he is buying, didn't list any other options and pretty much told all of us we didn't know what we were doing.

You can paint it rose-colored all you want. However, there was no other options and he wasn't listening to any others presented like brokering.

He doesn't even know if it's in his realm or even if it's a good opportunity for him. If he did, he wouldn't really need us to tell him would he?

 

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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.

 

[LifeTransformer]

What else can you do with 16k? (these are somewhat hyperbolic)

You could buy 1600 domain names and start a domain name business.
You could buy 1600 domain names and start 1600 websites (minus hosting fees of course).
You could buy a car for 16k and try to flip that for 20k and still have something useful if it doesn't sell.
You could buy 16k worth of furniture and flip that.
You could buy 16k worth of gold or silver and sit on it, and lose less value (probably) than you would from sitting on Magic cards (which will bend, and make them less valuable lololol).
You could buy some books with 1k of the money, and then figure out where to invest the rest and probably make more.
You could buy an cheap RV and go live off-grid.
You could rent an apartment full of poontang for a month and die of the results of the STDs.

 

[RadioActive]

Wouldn't risk 16k to make 4k. Bad idea

 

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[RadioActive]

You could rent an apartment full of poontang for a month and die of the results of the STDs

This.

 

[JAJT]

-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

I doubt he would go with this plan but I'll throw this out there just in case he's considering it:

Wizards of the Coast does not allow their wholesalers to sell MTG cards to non-physical retail outlets directly. Period. The only online retailers allowed to buy cards from wholesalers are ones who also have a physical presence. They are trying very, very hard to support physical stores as this is where the money is for them.

If you want to setup a retail card website for MTG cards, you either have to deal exclusively in the second hand market or convince your supplier that you have a physical location to their satisfaction.

 

[croman]

This should be a hobby, not a business.

Like others have said, if you got the paper laying around and it is a passion/hobby and you feel that worse case scenario you can maybe break even then no biggie.

YOu are thinking with your emotions.

this can be an expensive lesson.

less emotions, more logic.

I think the logic has been drawn out for you here.

use logic.

 

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[RazorCut]

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.

Jon, you never cease to crack me up.

 

[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.

 

[smartman]

CCG's are most definitely a billion+ business. it is all in how you approach it. these are a hard thing to dip in and out of for a flip.

That sucks that Wizards has changed their wholesaler policy even further than it was before. Shit was miserable to deal with every 6 months when they would change TOS.

We had customers that would buy a few booster boxes to an entire case each product release and sell off singles to make money. Seemed like a brutal way to grind out some money, but whatever. I have a feeling a lot of those people did not have many other options in life for income, so in that regard, it's pretty rad.

 

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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.

 

[EN_VY]

I never got into Magic cards, but I was so much into Pokemon. So I get the whole card game deal.. But investing 15K for Max 4K? Heeelllll no

 

[Ap0110]

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.

I think thats the best idea...because 16k is way too much for the little return. Also, you should hire an apraisor to pretend like he is intrested in buying with you...and he can secretly give you a number and you should inquier with an insurance company who you can use that they would recomend. Btw I never buy a collectible if I cant insure it for 3 times the purchase price.

 

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[RBefort]

I am in the camp of stupid idea. I flipped video game stuff this year and someone asked if i wanted to buy his inventory at40% off or so. At first it aounded great as i could use 3-4k that was guaranteed. Then my friend snapped me back into reality and said how dumb it was. Not only will it take god awful long to do, you waste using that money for a return somewhere else.

 

[Paul Thomas]

do u know magic?

 

[Andrewski]

Do it you'll double your money

 

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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.