A silly concept
Boopotts
Posts: 6,784 ✭✭
I've heard members of this board say that some dealers will break a high end case until they get the cut card, with the insinuation being that this is a profitable venture. In other words, I think some people here would consider trying this and selling off the 'dead boxes' if it weren't for the ethical considerations. However, the problem is a good deal more complicated than that. Here's why.
Assume the case costs 2K, and that it contains 10 boxes. Further, assume that the 'average' case card is worth 800, and that the rest of the contents of the case are worth $400. This puts the overall value of the case's contents at 60% of the price paid. Now do the math.
A box can be sold for $300 on the market. So, when you open the first box you are forfeiting three hundred bucks. However, the expected value of the box's contents are only $120-- you have 10% equity in the case card (worth $80), and 10% equity in the rest of the case's contents (worth 40$). So the value of the box if you're going to break it is only $120, no matter how you cut it.
The expected profit you'll get from the case if you don't crack a single box is $1000. But let's say you decide to crack one box. You have a 10% chance of now profiting an additional $540, since if you hit the case card you sell it for $800, the rest of the box's contents for $40, and the rest of the boxes in the case for $2700, giving you $3540. So you have 10% equity in $540, which yields $54. However, you will not hit the case card 90% of the time, and when this happens you will sell the box's contents for $40, meaning you have lost $260. 90% of 260 is 234, so when you don't hit the case card you lose $234.
Hitting the case card is worth $54. Not hitting it costs you $264. Thus, your expected loss from opening the first box is $210.
As you continue to open boxes the numbers get even worse! If dealers are in fact engaging in this practice they are hemhorraging money, AND screwing the people who buy boxes from them. It's a total no win for everyone.
Just wanted to present this in case anyone's thought about trying this. Ethical issues aside, you will bleed money if you give this a whirl. Like many ideas it looks good on paper, but when you expose the idea to sunlight it doesn't hold up.
Assume the case costs 2K, and that it contains 10 boxes. Further, assume that the 'average' case card is worth 800, and that the rest of the contents of the case are worth $400. This puts the overall value of the case's contents at 60% of the price paid. Now do the math.
A box can be sold for $300 on the market. So, when you open the first box you are forfeiting three hundred bucks. However, the expected value of the box's contents are only $120-- you have 10% equity in the case card (worth $80), and 10% equity in the rest of the case's contents (worth 40$). So the value of the box if you're going to break it is only $120, no matter how you cut it.
The expected profit you'll get from the case if you don't crack a single box is $1000. But let's say you decide to crack one box. You have a 10% chance of now profiting an additional $540, since if you hit the case card you sell it for $800, the rest of the box's contents for $40, and the rest of the boxes in the case for $2700, giving you $3540. So you have 10% equity in $540, which yields $54. However, you will not hit the case card 90% of the time, and when this happens you will sell the box's contents for $40, meaning you have lost $260. 90% of 260 is 234, so when you don't hit the case card you lose $234.
Hitting the case card is worth $54. Not hitting it costs you $264. Thus, your expected loss from opening the first box is $210.
As you continue to open boxes the numbers get even worse! If dealers are in fact engaging in this practice they are hemhorraging money, AND screwing the people who buy boxes from them. It's a total no win for everyone.
Just wanted to present this in case anyone's thought about trying this. Ethical issues aside, you will bleed money if you give this a whirl. Like many ideas it looks good on paper, but when you expose the idea to sunlight it doesn't hold up.
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Comments
Absolutely! I know this goes on. My point is that it's just a terrible play from a financial perspective. Dealer's may think they're 'getting over' by doing this, when in fact it's costing them money.
I need to brush up on my lingo.
Julen
RIP GURU
I've heard of dealers using digital scales to locate the box that has the extra gu/auto cards. I think this would only apply to certain products.
In the other scenario, it would depend on the payout of the case card and the average value of each box's contents.
But hey, paying Tiger/Kobe/Jordan/LeBron costs a lot of money. As Patrick Ewing said - "We may make alot, but we spend alot too."
and a tad slimy too.
Steve
Minnie Minoso Master and Basic
1967 Topps PSA 8+
1960's Topps run Mega Set
"For me, playing baseball has been like a war and I was defending the uniform I wore, Every time I put on the uniform I respected it like the American flag. I wore it like I was representing every Latin country."--Minnie Minoso
<< <i>"Then they pull it after opening half the case... Then they "dump" their remaining boxes on ebay. It's indirect "box searching", and it is quite common." >>
You bet it is - I would never buy a box from Ebay for this reason. I have spoken with many dealers, and I hear this quite often.
I buy a few cases a year of modern stuff, just for fun. I can't see this strategy working for me, though - the last case I broke didn't have the "case card" until the next to last box. I only had one sealed box left, if I wanted to "dump" something. Of course, I wouldn't do that - and the last box actually had a decent auto in it which made it worth opening. I'd bet this happens quite often, unless the boxes are being weighed, as someone mentioned earlier.
Eyebone
Ripken, Brooks & Frank Robinson, Old Orioles, Sweet Spot Autos, older Redskins - Riggins, Sonny, Baugh etc and anything that catches my eye.
My ghetto sportscard webpage...All Scans - No Lists!!! Stinky Linky
Brian
<< <i>There have been doubts if certain high-dollar cards were ever even inserted into normal packs. Like last year when that SoCal dealer "pulled" those two 1 of 1 exquisite cards. To quell doubt, just buy the entire production run of a certain product. This way you are guaranteed to get that Ruth cut, etc.
Brian >>
Now your talking about some SERIOUS shipping charges!!!
Ripken, Brooks & Frank Robinson, Old Orioles, Sweet Spot Autos, older Redskins - Riggins, Sonny, Baugh etc and anything that catches my eye.
My ghetto sportscard webpage...All Scans - No Lists!!! Stinky Linky