Hello, and welcome to my very first article here on Brainstorm Brewery. I’d like to start by thanking the staff here and especially Jason for pushing me to finish this article. It’s my goal to write articles that make you think critically about how you are currently conducting your business, and more importantly, to engage you in conversations that benefit our community.
With the nature of this being a new site with a great group of new writers, I feel it’s a little old hat to introduce myself other than to say I am where a lot of you are: looking to move out of casual trading and into serious Magic finance. While I am not as established as my contemporaries, I feel I can offer a lot of great lessons that have helped me get to the point where I am at now.
For starters, please stop the aversion to trading at Star City Games (SCG) pricing. It seems every financial writer has been on a recent kick bemoaning trade partners insisting on SCG pricing. SCG is the gold standard in the market for a reason: they literally set the bar and provide consistent pricing. Blah blah blah, but how does that help us? SCG being overpriced in comparison to eBay and TCGplayer is great if you want to get serious about making money with Magic.
The eBay/TCGplayer model represents the cash value of a card, where SCG is widely considered the retail value of a card. This means that trading at eBay/TCGplayer prices, if you trade for a card at $10, you should expect to get $10 in hard cash for your card (not counting shipping or fees). Now the complaints of many writers is that why would oneuse SCG to trade at an inflated value and then cash out at a much lower amount? Using that model, you eventually lose everything in the transaction.
This is very true, but the TCGplayer model is more appropriate for writers like Ryan Bushard and Corbin Hosler, who either operate as stores or work closely enough with stores that using the eBay/TCGplayer pricing for transactions is more profitable. If you are like me, you don’t run the counter at a store or have the clout to have players freely buy and sell to you on a regular basis. Without that authority, you can’t always buy cards at buylist values. Let’s be honest—collections are a great way to make money, but most of us compete with Craigslist or our local games store (LGS), and thus can’t rely on regularly obtaining collections. So if you aren’t buying collections or have players coming to you on a regular basis, how do you ever get ahead? You can either adopt the shark mentality, deceiving your trade partners about values, or you can do what I do.
My Trading Strategy
I have been very successful sniping auctions on eBay for Standard staples, usually paying 50% or less of SCG prices. In other words, I’m buying for close to buylist. Then I trade those cards to players in my area for cards that have a much smaller margin. For example, sold listings on eBay for Elspeth, Sun’s Champion range around $50 for a playset, or $12.50 a copy. SCG is sold out at $20 and might not drop any further. Hypothetically, we are up $7.50 a copy at this point. I then take an Elspeth to Friday Night Magic (FNM) and trade it away for five copies of Thalia, Guardian of Thraben. The SCG price on Thalia is $3.99, but completed eBay auctions for Thalia close around $3 per copy. From a financial perspective, you just “made” $2.50. While not a lot, it starts to add up if you think about all the nickel and dimes we pull out of bulk.
The example of Thalia can be applied to every spec you make. You should be trading for cards that are not as profitable to pay cash for but also have the potential to rise further. Using Thalia as a sleeper, how does that trade look if Thalia starts selling for $5 or $6 each? The key to this concept isn’t trading overpriced Standard cards into eternal staples. Instead, we use any overpriced to find cards that have a cash value closer to retail.
If you trade at TCGplayer levels, how do you come ahead? Do you buy at TCG low and trade at TCG mid? The margins aren’t that high. Going back to earlier example with Elspeth, say you buy the cheapest copy at $15 and then sell for $20. After fees, that $5 really starts to shrink to nothing. As sellers, we want cash handy and TCG low is really where we can expect to sell quickly, getting our cash back in hand soonest. If you have success trading at TCGplayer prices, I would love to hear what has worked for you and what you think about my method.
If two things are certain in life, they’re death and taxes. Likewise, the one constant in Magic is that once cards rotate, it takes a long time to reach their peaks again, if at all. This leads to another benefit of using SCG prices: moving Standard cards into Modern, Legacy or EDH. SCG has to be the worst at repricing cards, which is the absolute nuts if you are trading with the SCG-only guy or gal. One of the most glaring examples I can point to was during last Modern season, when Celestial Colonnade was selling for $3.99 on SCG but playsets were closing on eBay for $20.00. Even after fees, trading at $16 and selling for $20 was a no-brainer. Even better, Celestial Colonnade was sold out for literally months while it was selling for $6 to $8 elsewhere. But history is history, and if we all had a time machine we’d all buy Black Lotuses, but how about currently? Foil Steel Overseers are sold out on SCG but you can’t buy them cheaper than $12. See where I am going here? Do you want to trade on a site that trends with the market or one that lags at times?
Please allow me to address critics of the approach I propose. How do you trade for high-cash-value cards if they are not in binders? It’s very fair, but my practice isn’t for the trader who shows up once a month to trade. You need to be extremely active in your community. I personally have four stores in my area with four separate play styles. This gives me opportunities to pick up cards from players with very different priorities. It does mean increasing my knowledge of different formats, but that’s not a negative.
I think its very important to research and honestly think about the cards we choose to spend cash on. How does that purchase make us the most money? More importantly, how do we expect to come ahead in the end? Look at opportunities like the Elspeth example. What card is in high demand right now that you can pick up for half its retail value in cash and trade for cards with cash value 90% of retail? The system always works for cheaper cards too. If your group is out of Chained to the Rocks, you can buy at $1.50 on TCGplayer and then trade to locals at $2.50—you just come ahead every time. Look for opportunities, do the research, know what cards local players are looking for, and fill that niche.
If you’re playing with an SCG-centric crowd, you can make money by picking up cards at eBay/TCGplayer low and selling directly to the players that are willing to pay cash. If you offer to sell your Elpseth for $15, you just made the $2 without having to pay fees. At the same time, you made money and your trade partner feels like he got a deal. This practice won’t make you millions, but will provide just enough incremental value to make it worthwhile. It creates the opportunity to have a steady cash flow and cards that are in high demand no matter the season.
One final distinction I want to make is an ethical tickle I feel when discussing this practice. This is exploitation, but it is not one that takes advantage of your trade partners like deceptive pricing does. You are offering the service of putting down your cash when they are not willing to.
Thanks again for your time and I hope you will read my next article, too. Please feel free to reach me on Facebook at Justin Waller, on Twitter @SpellBombFTW, or in the comments below.
P.S. I do like to think of myself as financially-minded, so here’s a tip: buy or trade into Innistrad block Modern staples right now. Not counting Liliana of the Veili, Geist of Saint Traft, and Snapcaster Mage, cards like Huntmaster of the Fells, Bonfire of the Damned, and Olivia Voldaren are selling on eBay very close to SCG prices. Pay attention to the market! When SCG is at or lower than everyone else, they will course correct soon, and you want to be in before they do.