Why do complete sets sell at a discount?

natetrook

Watching the last few complete sets sell on E-bay, Mastro, Memory lane, etc. It appears that most of the PSA graded sets sell for 80% of SMR book value. Shouldn't they sell for a premium like a coin set, based on the difficulty of assembling such a set?

Seems like a bit of profit for purchasing complete sets and breaking each one up? Collectors certainly are paying a premium for the privelege of assembling them one by one, although it is a lot of fun and a challenge.

What do you think?

Nate

lostdart58

I think you can certainly put together a graded set for less then 80% of SMR with patience and diligence. (There are some sets that are exceptions I am sure.)

Buccaneer

Agree. Right now I am at 69% of SMR for the 57 and 51% of SMR for the 63. I am only 57% and 43% complete, respectively, so I expect the discount percentage to go up closer to 75%. I do not include the cost of grading in my buy price because I just look at them as holder/display expenses. With that, the reason the 63 discount is so low is the many PSA 8s that were bought raw for $2-3.

duner

I think it depends on the set. I agree anything from the 60's on sells at a discount....but 50's stuff, especially early 50's or older typically sell for a premium.

SDavid

I've seen sellers get a premium for raw complete sets just by being patient and waiting for a buyer to pay their price. I've gotten strong premiums over what single cards usually sell for by doing the same thing. I'm sure you could sell a graded set for a decent premium if you were willing to wait a while, though sometimes you'll be surprised how fast things will sell. (Other times you'll have to list them 3-4 times). There really are a lot of buyers out there who aren't low ballers and who will pay good money for nice collectibles. You just have to find them, or at the very least wait for them to find you.

SDavid

BTW, by "premiums for raw sets", I meant amounts greater than what it costs to assemble those sets in raw condition, including shipping - not amounts greater than smr or high beckett. I don't pay much attention to either when I'm buying or selling, unless I absolutely can't find any sales data for an item.

mmoin

On average, SMR seems to be about 10-20% too high for the vast majority of 50's-60's vintage baseball, with exceptions often garnering as little as 50% of SMR or as high as 200-300% (excellent examples of popular stars) or 200-1000% (crazy lo-pops). Overall, though, I would say that the prices+buyer's premium reflect decent bargains, but not enough to make a huge profit flipping the individual cards. As an example, I recently purchased this set on Mastro. I got an excellent price, in my opinion, but not nearly a low enough one to make a really good profit.

Andrew

67standup

Good post.

Never understood why a complete set sells for far less than the sum of the singles. Guess I better review my Economic's notes. Wait, this probably wouldn't help as there's no logic to this hobby.

Boopotts

<< <i>Good post.

Never understood why a complete set sells for far less than the sum of the singles. Guess I better review my Economic's notes. Wait, this probably wouldn't help as there's no logic to this hobby. >>



This is a definite post of the month candidate. No logic-- brother, truer words were never spoken.

mmoin

There are countless good reasons why complete sets sell at a discount:

1) Collectors who derive great value from the process of building a set are unlikely to bid on complete sets, even in a year they are greatly interested in. Thus, many of the very people who would normally drive the prices of lo-pop commons and high-quality stars sky high are out of the running. You end up being left with dealers, who are going to put up lower bids of course, and the rational, stone-cold collectors who are unlikely to drive up bidding to maniac levels.

2) There is a major "fudge factor" in grading sets. Although auction houses are usually reasonably honest in their grading, the vast majority of complete sets sold on eBay are horribly overgraded, at least by one level and often by more.

3) The break value of a given set is greatly lessened by the various "frictional" costs of eBay and Paypal, and the time cost of actually packaging stuff up.

I could probably think of more if I were to sit down and really think about it. I still think the discount of complete sets can be explained pretty well in an econ framework.

-Andrew

Buccaneer

<< <i>There are countless good reasons why complete sets sell at a discount:

1) Collectors who derive great value from the process of building a set are unlikely to bid on complete sets, even in a year they are greatly interested in. Thus, many of the very people who would normally drive the prices of lo-pop commons and high-quality stars sky high are out of the running. You end up being left with dealers, who are going to put up lower bids of course, and the rational, stone-cold collectors who are unlikely to drive up bidding to maniac levels.

2) There is a major "fudge factor" in grading sets. Although auction houses are usually reasonably honest in their grading, the vast majority of complete sets sold on eBay are horribly overgraded, at least by one level and often by more.

3) The break value of a given set is greatly lessened by the various "frictional" costs of eBay and Paypal, and the time cost of actually packaging stuff up.

I could probably think of more if I were to sit down and really think about it. I still think the discount of complete sets can be explained pretty well in an econ framework.

-Andrew >>



I would also definitely add this as a Post of the Month candidate.

kennylow

The people that are typically interested in a particular set have probably already begun assembling their own set. So what good does it do them to buy a full complete set if they are already 50% of the way there? Most people don't get excited by a set by not having any cards - they get excited by starting with a few - say 50 or 100...and then they build from there. For those that have foresight to buy a complete set from scratch, that's great, but there are fewer of those people.

Onlypsahockey

<< Watching the last few complete sets sell on E-bay, Mastro, Memory lane, etc. It appears that most of the PSA graded sets sell for 80% of SMR book value. >>

Nate,

Are these sets 100% graded sets? Or are you refering to the raw sets with the graded handful of cards? Does this 80% of SMR also apply to sets which are #1 or #2 on the registry? I would imagine a top registry set would be an exception and bring out the big guns?

Bob

calleocho

i have noticed that small to medium lots 10%-30% of a set will often sell very close to SMR...i think people like the idea of starting a set with a nice chunk vs the whole set at once.

Top 5 sets in competitive years are a different animal...

natetrook

Bob,

A 100% complete 1956 set graded PSA-8 sold for $31,386. SMR was $38,395. 81.7% of SMR. Good breakup value there.

I think a #1 or #2 set would go for SMR. However, I think lesser grade sets or sets with just a handful of graded cards are selling at a discount.

I just bought a 1961 set, all Psa-7 with a few 8's for $7500. SMR was about 11,000. I broke it up and sold the cards individually for 10,000, and I kept the best 2 mantles and a PSA-8 Elston Howard. After E-bay fees, my net profit was 9500 - 7500 = 2000 plus kept the best 3 cards for my personal collection. Not bad.

I just think when someone goes to sell their registry set, it's a balance of your time to scan, list, and deliver each individual card vs. selling the set in its completeness for less money.
Nate

mmoin

Nate-

I watched the 1956 set with immense interest, as it was really an amazing lot. Although it did sell for 31,386, that didn't include the 15% buyer's premium, bringing the total to $36,093 (not too far off SMR)- a good price but not quite a steal. Your 1961 purchase, however, sounds like a really solid deal, assuming there was no premium involved.

Andrew

jayhawke

Nate,

Sounds like a nice pick up and flip. There was a complete '61 topps graded baseball set on ebay at the same time of your breakup. The seller didn't sell it after 2 times and then broke it up in large lots. I lost track of the auctions. I tried to buy it, but he would move on his price which was 2K from SMR. SMR isn't a great indicator with '61's. A lot of the PSA 7's and some PSA 8's sell much less than SMR.

ajw

<< <i>Bob,

A 100% complete 1956 set graded PSA-8 sold for $31,386. SMR was $38,395. 81.7% of SMR. Good breakup value there.

I think a #1 or #2 set would go for SMR. However, I think lesser grade sets or sets with just a handful of graded cards are selling at a discount.

I just bought a 1961 set, all Psa-7 with a few 8's for $7500. SMR was about 11,000. I broke it up and sold the cards individually for 10,000, and I kept the best 2 mantles and a PSA-8 Elston Howard. After E-bay fees, my net profit was 9500 - 7500 = 2000 plus kept the best 3 cards for my personal collection. Not bad.

I just think when someone goes to sell their registry set, it's a balance of your time to scan, list, and deliver each individual card vs. selling the set in its completeness for less money.
Nate >>



I'm curious to learn how you sold your set. First, did you buy it simply as an investment to flip as soon as you got the cards? Did you sell each card individually or did you sell some of the commons in lots? Did you sell them on eBay or through other sources? Did you find it *fun* to break and sell the set, or was it more of a chore? How long did it take you to sell the set?

natetrook

Let's put it this way. It was a chore, but overall quite fun.

I kept the set for 6 months to look at and play with. My 5 yr. old loved looking through it, and I knew he couldn't damage the cards.
It took me 1 full day to scan and modify the images. Another full day to list it, and a few lunch hours and evenings to track and mail out the cards. All in all, it was fun.

I got a kick out of doing it, but my current job would certainly have paid me more working and then just buying the mantles and best cards. But what's the fun in that? :-)

natetrook

I sold all of the cards on E-Bay individually. All but 15 sold, and I pre-sold 100 cards or so to the Set Registry list members.
Nate

67standup

kennylow/mmoin:

Those were very good explanations why the sum of the parts sells for more than the whole. Thanks.

CDsNuts

Who is the type of person that will buy a complete graded set? Sometimes collectors looking to add to their collection, but not usually. It's almost always someone like nate looking to make a few bucks on the break, which wouldn't be possible if it were to sell at 95-100% of SMR. The set is usually going to go to the person who is willing to cut their profit margin the closest, or who miscalculates the breakup value the most.

Actually, I have a theory that sets are the most profitable way to flip cards, especially nice ungraded sets. If a person has a good eye for grading and can lot them out well, I think they could make 20-30% on average for sets from the 60s and 70s, which isn't bad at all if you can do it many times over. However, as nate mentioned, it can be very time consuming. If you really think about, there's almost no risk involved, with the exception of a few jerks throwing counterfeits in the raw sets.

Lee

SDavid

I guess graded sets are just a different animal. Two or three years ago I put together a nice midgrade '64 Topps set for around $1500 after I sold off my dupes. I think it ended up selling for around $1800, but I saw other sellers get around $2200-$2300 for sets in similar condition. These were mostly BIN auctions and were sellers who had sold a lot of raw vintage.

Last year a seller followed a posted schedule for listing vintage sets. After the first few, those sets sold HUGE. He had to have made a killing off them.

One time I also saw a dealer buy a '66 Topps set off ebay and break it. I added up his auction totals in an excel spreadsheet, and he actually had lost about $200 even before ebay/paypal fees. Can you imagine auctioning off that many cards and losing money??? It looked like the set was described accurately, too - he just overpaid.

Sellers like waverly82 could probably make a profit breaking most sets, but that's because they have a large following.

packCollector

<< <i>A 100% complete 1956 set graded PSA-8 sold for $31,386. SMR was $38,395. 81.7% of SMR. Good breakup value there.
>>



That set sold for a pretty good buy , there was another in memory lane or somewhere that went over smr. I sold off this set (about 80%) back in december -February for about 120% of smr, I had all of the low pops except mitchell and the white sox team. I sold it primarily in $2500 chunks with 1 big $12,000 chunk. The problem with selling it whole is that not a lot of people have 30-40k to spend at once. there are a lot of people that will spend $2500 wvery 2 weeks but not the whole thing at once. I had 1 buyer that bought 4 - $2500 lots basically every 2 weeks before someone jumped in to buy the rest. This buyer has since completed the set and paid way more than smr because he needed to space out his purchases which I think is the case with most buyers that are active. The buyers with unlimited funds that could buy the set at once probably already have a set so the sets as a whole go for a discount

CardHunter

JrMacdaddy