Great post! I had a shop until 1994. I closed down as the baseball strike took business to almost nothing. Had I been better capitalized, then I probably would have been able to ride it out.
Storm is dead on right.
I made some friends who had shops in the same area and they are all gone. The common theme among them:
#1 Failure to embrace online selling - whether SportsNet in the 1990s or eBay later they relied on people coming in the store. "It's a fad".
#2 Failure to understand market pricing - Beckett means nothing. eBay sets prices.
#3 Failure to embrace card grading. Grading took took the "when you buy it's VG, when you sell it's MINT" out of the equation.
The ones that are still open provide good customer service, are well stocked, and at least have some kind of online presence whether a web site or eBay.
<< <i>""E-bay killed the Mom and Pop Shop" "
//////////////////////////////////////////////
ONLY seems that way.
On my 2007 trip, I went to scores of collectible stores. They ALL had at least two things in common:
1. The ALL had some (tiny/huge) EBAY presence.
2. They ALL said they could not profitably stay in the business, if they did not have an EBAY presence.
EBAY has saved ALOT more stores than it has wiped-out.
The stores that closed would have done so without any pressure from EBAY.
Real-estate prices (retail rents) changed the entire face of retailing in America. The internet provides auxiliary income to offset a portion of the fixed-expenses suffered by B&M merchants; EBAY rescues those stores --- it does not destroy them. >>
See the comment I just made to Steve. I think we're just talking about different "markets".
You are talking about the collective market, whereas I am talking about a specific individual market.
For example, the collective market value of PSA 7 1965 Mantle's will be determined by the aggregation of information from all transactions involving PSA 7 1965 Mantle's. But the individual market value of any given PSA 7 1965 Mantle will be determined by the last transaction involving that specific card.
People do not buy collective markets....they buy a specific individual card.
And Stown,
Can you explain what you mean when you say that "the value created is on the buy, not the sell"? I'm not sure I understand what you mean (snide condescending comment not required)....
Can you explain what you mean when you say that "the value created is on the buy, not the sell"? I'm not sure I understand what you mean (snide condescending comment not required).... >>
I already gave you an example.
<< <i>You keep bringing up economics but use an incorrect philosophy.
The value created is on the buy, not the sell.
For example:
One buys a raw card for $100 and PSA values are 6 $75, 7 $200, 8 $400.
If the card grades a 6, then you overpaid on speculation. >>
I'm sorry but I don't have the time nor eloquent enough to teach you economics.
I suggest that you don't use economics as your main arguement if you don't understand it's real meaning.
Again, basic high school economics says "the market dictates the price", which is true on a very simple concept but that's it.
So basically my kid won't be able to go to college, but at least I'll have a set where the three most expensive cards are of a player I despise ~ CDsNuts
"People do not buy collective markets....they buy a specific individual card."
Individual market value? IMV? Are you serious? I mean, come on buddy. You can't make up new terms to support your economic theories although I'm sure the guy who bought McGwire's 70th HR ball will be pleased to hear about this new economic theory.
You certainly raised a decent question in the thread topic but somehow this got lost in the economic theory debate.
Mark B.
Seeking primarily PSA graded pre-war "type" cards
My PSA Registry Sets
34 Goudey, 75 Topps Mini, Hall of Fame Complete Set, 1985 Topps Tiffany, Hall of Fame Players Complete Set
<< <i>Even if there was a card shop in my area, I doubt I would frequent it, solely because I got a card shop called ebay I go to on an hourly basis... >>
Excellent quote- I could not agree more. I visit the local shops maybe once a month--I am surfing ebay and the online sellers on a daily basis.
<< <i>You are able to buy a card that books for 200.00 (that is an established market price). You buy said card for 100.00, thus the value you have built in is 100.00. >>
Steve,
I think you inadvertantly illustrated my point with your example.
While the collective market value for all copies of that card may be $200, the market value for the specific copy you bought is only $100 (or else you would not have been able to buy it at that price).
Your "built in value" is wholly theorectical, and is dependent on finding another buyer who will pay you the collective market value of $200 for your card, thus allowing you to realize your theorectical profit. But until you find another buyer willing to pay you more than $100 for your specific card, the value of your card is what you paid for it (i.e. $100), regardless of what the collective market value says it should be worth.
If the prices of individual cards always sold for exactly book value, then the collective market price would be the same as individual market prices. But they don't.
It's the inefficiencies in the market (such as in your example) that create opportunities for profit. But the profit those opportunities represent is purely theoretical until you find a buyer who values your specific card at a higher price than what you paid for it.
I did? Great, then I killed 2 birds with one stone.
I was simply trying to answer your question:
And Stown,
Can you explain what you mean when you say that "the value created is on the buy, not the sell"? I'm not sure I understand what you mean (snide condescending comment not required)....
I was trying to give an example of how one gets value created on the buy.
<< <i>You are able to buy a card that books for 200.00 (that is an established market price). You buy said card for 100.00, thus the value you have built in is 100.00. >>
Steve,
I think you inadvertantly illustrated my point with your example.
While the collective market value for all copies of that card may be $200, the market value for the specific copy you bought is only $100 (or else you would not have been able to buy it at that price).
Your "built in value" is wholly theorectical, and is dependent on finding another buyer who will pay you the collective market value of $200 for your card, thus allowing you to realize your theorectical profit. But until you find another buyer willing to pay you more than $100 for your specific card, the value of your card is what you paid for it (i.e. $100), regardless of what the collective market value says it should be worth.
If the prices of individual cards always sold for exactly book value, then the collective market price would be the same as individual market prices. But they don't.
It's the inefficiencies in the market (such as in your example) that create opportunities for profit. But the profit those opportunities represent is purely theoretical until you find a buyer who values your specific card at a higher price than what you paid for it. >>
Just a suggestion.
Sometimes when you try to act smarter than you are, you end up looking foolish.
So basically my kid won't be able to go to college, but at least I'll have a set where the three most expensive cards are of a player I despise ~ CDsNuts
Steve, there is no question that the value created (profit margin) is on the buy. Most people assume that you only need to look at the appreciated (or depreciated) amount that a card has been selling for. The key indicator is what one would buy the card for that determines the profit. If, for example, a card on eBay has been selling at a steady $100 but you have been able, from other sources, buy the card at $75, $50 and now $40. The value created has actually gone up. For me, that was why my sales of 57 PSA 7s and 8s were tremendous (15-40% profits). Not because the sell prices were higher (in some cases there were), but because I was able to get really good deals on the buy. Another example I like to use is 63 Bucs Blaster PSA 7. This card had been selling for 50% of SMR until it went down to 40% of SMR. My value of the card was still profitable, regardless of the sell price, because of what my buy price was.
<< <i>You are able to buy a card that books for 200.00 (that is an established market price). You buy said card for 100.00, thus the value you have built in is 100.00. >>
Steve,
I think you inadvertantly illustrated my point with your example.
While the collective market value for all copies of that card may be $200, the market value for the specific copy you bought is only $100 (or else you would not have been able to buy it at that price).
Your "built in value" is wholly theorectical, and is dependent on finding another buyer who will pay you the collective market value of $200 for your card, thus allowing you to realize your theorectical profit. But until you find another buyer willing to pay you more than $100 for your specific card, the value of your card is what you paid for it (i.e. $100), regardless of what the collective market value says it should be worth.
If the prices of individual cards always sold for exactly book value, then the collective market price would be the same as individual market prices. But they don't.
It's the inefficiencies in the market (such as in your example) that create opportunities for profit. But the profit those opportunities represent is purely theoretical until you find a buyer who values your specific card at a higher price than what you paid for it. >>
You are focusing too much on a single data point as an indicator of true market value. "True" value on items which are not unique is only determined through an aggregate of all of the sales for that particular item. Each sale is only an additional data point added to this aggregation.
Having taken more than my fair share of probability course work in graduate school, I always like to use the example of the Gaussian Distribution (Bell Curve everyone hears about in school but usually doesn't know how it is applied). Think of SMR as the mean price. There may be no sales at exactly the mean value, but there is a vary good chance that 95% of all sales will be within 2 standard deviations above or below the mean. If there are drastic variations in the price for a single card, the mean may change, but most likely we will see the spread for each standard deviation will increase while the means remains the same (SMR).
What grading has done to the card market, is create more than one product evidenced by each grade of a specific card (more so for vintage issues since newer stuff is usually high end).
Comments
Storm is dead on right.
I made some friends who had shops in the same area and they are all gone. The common theme among them:
#1 Failure to embrace online selling - whether SportsNet in the 1990s or eBay later they relied on people coming in the store. "It's a fad".
#2 Failure to understand market pricing - Beckett means nothing. eBay sets prices.
#3 Failure to embrace card grading. Grading took took the "when you buy it's VG, when you sell it's MINT" out of the equation.
The ones that are still open provide good customer service, are well stocked, and at least have some kind of online presence whether a web site or eBay.
<< <i>""E-bay killed the Mom and Pop Shop" "
//////////////////////////////////////////////
ONLY seems that way.
On my 2007 trip, I went to scores of collectible stores.
They ALL had at least two things in common:
1. The ALL had some (tiny/huge) EBAY presence.
2. They ALL said they could not profitably stay in the business,
if they did not have an EBAY presence.
EBAY has saved ALOT more stores than it has wiped-out.
The stores that closed would have done so without any pressure
from EBAY.
Real-estate prices (retail rents) changed the entire face of
retailing in America. The internet provides auxiliary income
to offset a portion of the fixed-expenses suffered by B&M
merchants; EBAY rescues those stores --- it does not destroy them. >>
See the comment I just made to Steve. I think we're just talking about different "markets".
You are talking about the collective market, whereas I am talking about a specific individual market.
For example, the collective market value of PSA 7 1965 Mantle's will be determined by the aggregation of information from all transactions involving PSA 7 1965 Mantle's. But the individual market value of any given PSA 7 1965 Mantle will be determined by the last transaction involving that specific card.
People do not buy collective markets....they buy a specific individual card.
And Stown,
Can you explain what you mean when you say that "the value created is on the buy, not the sell"? I'm not sure I understand what you mean (snide condescending comment not required)....
<< <i>And Stown,
Can you explain what you mean when you say that "the value created is on the buy, not the sell"? I'm not sure I understand what you mean (snide condescending comment not required).... >>
I already gave you an example.
<< <i>You keep bringing up economics but use an incorrect philosophy.
The value created is on the buy, not the sell.
For example:
One buys a raw card for $100 and PSA values are 6 $75, 7 $200, 8 $400.
If the card grades a 6, then you overpaid on speculation. >>
I'm sorry but I don't have the time nor eloquent enough to teach you economics.
I suggest that you don't use economics as your main arguement if you don't understand it's real meaning.
Again, basic high school economics says "the market dictates the price", which is true on a very simple concept but that's it.
lol you are kidding right? I mean that goes w/o saying.
A card would almost have to be unique for it to be a market unto itself.
This thread has gone off into too many tangents for me to keep up.
You make a statement, someone disagrees and you vear off and answer again, changing the original context of whatever you were saying and on and on.
Steve
lol you are sinking fast.
Steve
What that means is you buy something at a wholesale level and sell it retail basically.
Ill give you an example using a card.
You are able to buy a card that books for 200.00 (that is an established market price)
You buy said card for 100.00, thus the value you have built in is 100.00.
Good buys = profit.
Bad buys = less or no profit. Or time is used to off set the bad buy.
Steve
Individual market value? IMV? Are you serious? I mean, come on buddy. You can't make up new terms to support your economic theories although I'm sure the guy who bought McGwire's 70th HR ball will be pleased to hear about this new economic theory.
You certainly raised a decent question in the thread topic but somehow this got lost in the economic theory debate.
Seeking primarily PSA graded pre-war "type" cards
My PSA Registry Sets
34 Goudey, 75 Topps Mini, Hall of Fame Complete Set, 1985 Topps Tiffany, Hall of Fame Players Complete Set
<< <i>Even if there was a card shop in my area, I doubt I would frequent it, solely because I got a card shop called ebay I go to on an hourly basis... >>
Excellent quote- I could not agree more. I visit the local shops maybe once a month--I am surfing ebay and the online sellers on a daily basis.
Dallas Cowboys
SuperBowl MVPs
Heisman Trophy Winers
Steve
<< <i>You are able to buy a card that books for 200.00 (that is an established market price). You buy said card for 100.00, thus the value you have built in is 100.00. >>
Steve,
I think you inadvertantly illustrated my point with your example.
While the collective market value for all copies of that card may be $200, the market value for the specific copy you bought is only $100 (or else you would not have been able to buy it at that price).
Your "built in value" is wholly theorectical, and is dependent on finding another buyer who will pay you the collective market value of $200 for your card, thus allowing you to realize your theorectical profit. But until you find another buyer willing to pay you more than $100 for your specific card, the value of your card is what you paid for it (i.e. $100), regardless of what the collective market value says it should be worth.
If the prices of individual cards always sold for exactly book value, then the collective market price would be the same as individual market prices. But they don't.
It's the inefficiencies in the market (such as in your example) that create opportunities for profit. But the profit those opportunities represent is purely theoretical until you find a buyer who values your specific card at a higher price than what you paid for it.
I was simply trying to answer your question:
And Stown,
Can you explain what you mean when you say that "the value created is on the buy, not the sell"? I'm not sure I understand what you mean (snide condescending comment not required)....
I was trying to give an example of how one gets value created on the buy.
Steve
<< <i>
<< <i>You are able to buy a card that books for 200.00 (that is an established market price). You buy said card for 100.00, thus the value you have built in is 100.00. >>
Steve,
I think you inadvertantly illustrated my point with your example.
While the collective market value for all copies of that card may be $200, the market value for the specific copy you bought is only $100 (or else you would not have been able to buy it at that price).
Your "built in value" is wholly theorectical, and is dependent on finding another buyer who will pay you the collective market value of $200 for your card, thus allowing you to realize your theorectical profit. But until you find another buyer willing to pay you more than $100 for your specific card, the value of your card is what you paid for it (i.e. $100), regardless of what the collective market value says it should be worth.
If the prices of individual cards always sold for exactly book value, then the collective market price would be the same as individual market prices. But they don't.
It's the inefficiencies in the market (such as in your example) that create opportunities for profit. But the profit those opportunities represent is purely theoretical until you find a buyer who values your specific card at a higher price than what you paid for it. >>
Just a suggestion.
Sometimes when you try to act smarter than you are, you end up looking foolish.
<< <i>
<< <i>You are able to buy a card that books for 200.00 (that is an established market price). You buy said card for 100.00, thus the value you have built in is 100.00. >>
Steve,
I think you inadvertantly illustrated my point with your example.
While the collective market value for all copies of that card may be $200, the market value for the specific copy you bought is only $100 (or else you would not have been able to buy it at that price).
Your "built in value" is wholly theorectical, and is dependent on finding another buyer who will pay you the collective market value of $200 for your card, thus allowing you to realize your theorectical profit. But until you find another buyer willing to pay you more than $100 for your specific card, the value of your card is what you paid for it (i.e. $100), regardless of what the collective market value says it should be worth.
If the prices of individual cards always sold for exactly book value, then the collective market price would be the same as individual market prices. But they don't.
It's the inefficiencies in the market (such as in your example) that create opportunities for profit. But the profit those opportunities represent is purely theoretical until you find a buyer who values your specific card at a higher price than what you paid for it. >>
You are focusing too much on a single data point as an indicator of true market value. "True" value on items which are not unique is only determined through an aggregate of all of the sales for that particular item. Each sale is only an additional data point added to this aggregation.
Having taken more than my fair share of probability course work in graduate school, I always like to use the example of the Gaussian Distribution (Bell Curve everyone hears about in school but usually doesn't know how it is applied). Think of SMR as the mean price. There may be no sales at exactly the mean value, but there is a vary good chance that 95% of all sales will be within 2 standard deviations above or below the mean. If there are drastic variations in the price for a single card, the mean may change, but most likely we will see the spread for each standard deviation will increase while the means remains the same (SMR).
What grading has done to the card market, is create more than one product evidenced by each grade of a specific card (more so for vintage issues since newer stuff is usually high end).
J