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You Don't Want to Believe It But It Is a Zero Sum Game

Posted By: barrysloateYes Dave- the percentage I ask has to be competitive with what others are getting, if not even a little better. And the major change with ebay is it allows everybody to sell their own cards. The business doesn't get any easier; hence, a smaller share for the auction house.

You Don't Want to Believe It But It Is a Zero Sum Game

Posted By: Al C.risafulli"Have you noticed that auction houses take a much larger percentage than most retailers. " Says who? In what business? A retailer often bases its profit margin on dollar value. Maybe they make 2-3 points on a television, but 40-50 points on a remote control. They constantly squeeze their manufacturers and distributors for lower prices and better packaging. Manufacturers are required to submit planograms to tell the stores how to merchandise properly. They also have to produce signage and displays for the retailers. In many cases, they have to provide product training. They often have to pay money to advertise in the retailer's circulars. And on top of that, they need to provide market development funds to help the retailer defray the cost of marketing. They have to have co-op programs and volume rebates so that the retailer gets additional discounts and funding when the retailer sells a higher volume. All this costs money, and it's paid for by the manufacturer - which helps the retailer's bottom line beyond the margins they sell on the individual product. The manufacturers take hits on their margins constantly. And then the retailer fixes a price, and any consumer who wishes to purchase the item needs to buy it at that price. Furthermore, the retailer is dealing with products where there are multiple alternatives to buy. Want to buy a battery for your cellphone? Take your pick from 10 different aftermarket brands and 100 different styles and colors. Don't like the price at Circuit City? Walk down the street and buy it at Wal-Mart, Staples, Office Depot, Target, Best Buy, Radio Shack, Fred's Camera Shop, or any other store that sells the same item. In the auction business, the auctioneer produces a catalog and (often) a website, and is solely responsible for presenting the item in the way that's designed to generate the most bids. They're responsible for going out and finding the potential buyers who are likely to pay the most for the item. They're even responsible for finding the material to auction. And since their reward is a percentage of the closing price, they are rewarded solely based on how good a job they do. The auctioneer takes a commission from the buyer and the seller, but doesn't ask the seller to chip in to cover marketing costs, or do training, or make signs and posters - once the item is in the auctioneer's possession, it becomes their responsibility entirely. And if they do a bad job, they're likely to lose the opportunity for all future business with the consignor. Furthermore, with many items in an auction, the buyer doesn't have the choice to walk down the street and buy the same item - or a cheap knockoff - from another store. It's not like you can bring in a coupon for 10% off a Wagner, and then if you don't like the service, bring it down the street to a competitor who honors all coupons. The auctioneer usually doesn't have shelves and distribution centers stocked with identical items and multiple manufacturers from which to source them, either. And the seller of the card has a completely different scenario as well - they're not trying to sell their Goudey set in every possible distribution channel - they have just one, and they're choosing the channel that they think will get them the best price. The only similarity between the two transactions is that the buyer ultimately has to pay for the item they're buying. Comparing a retail transaction of a commodity to an auction transaction of a collectible isn't even akin to comparing apples to oranges, because there are too many similarities between apples and oranges. It's more like comparing apples to hammers. -Al EDITED to rant a little further.

You Don't Want to Believe It But It Is a Zero Sum Game

Posted By: peter chaoAll you have said is true. But the retailers do not focus on rarity and future value. They are not asking you to speculate. They are saying that an item such as a battery has a certain degree of usefulness and they want to be compensated for providing that battery to you. What they offer is a lot more concrete than an auction house. Peter

You Don't Want to Believe It But It Is a Zero Sum Game

Posted By: Max WederDitto on Al's comments. Margins for retailers are squeezed by competitive economic forces, just as commissions charged by auction houses are. Anti-trust laws prevent collusion by sellers and auction houses. Peter, I'm not sure where you get your basis for your statement, but seller's commissions charged seem to have dropped markedly in recent years for auction houses, as the supply of vintage items becomes more difficult to obtain. I have even heard of a negative commission for a premium item. In order to maintain profit margins, the auction houses have increased the buyer's premium. As a bidder in an auction, you will only factor in the latter in deciding what you bid. If you don't like the price, don't bid on it. How is that smoke and mirrors? Max

You Don't Want to Believe It But It Is a Zero Sum Game

Posted By: barrysloateAl- you used the example of a retailer who sells a product such as a television. I am referring to a retailer of baseball cards, who has nothing more to do than rent a table at a show, act obnoxious, and charge too much. <img src="/images/happy.gif" height=14 width=14>

You Don't Want to Believe It But It Is a Zero Sum Game

Posted By: leonNot to speak for Peter C (I don't think I could if I wanted to) but I think he is talking about the puffery in the descriptions. I agree with him on that point but don't blame the auction houses either. Everything can't be rare or it wouldn't be...uh ..er...rare....

You Don't Want to Believe It But It Is a Zero Sum Game

Posted By: barrysloatePeter- a battery is not something that you really can auction. It has a fixed price give or take a few cents. Could you see a bidding war with snipes set for a package of six AAA's? It wouldn't happen. Auctions are effective for items that are rare and in demand. Then people will compete for them.

You Don't Want to Believe It But It Is a Zero Sum Game

Posted By: Marc S.One thing strikes me in some threads like this: People here like to complain about the prices of what they collect. Auctions have high buyer's fees and through the "smoke and mirrors" and focus on rarity, prices go much higher than they otherwise would, so there are no deals to be had in auctions. Shows are equally non-productive as dealers seem to have either shiny, new crap, or they have vintage cards at such a premium price that it is more a museum than a dealer, since no one would buy at the prices listed. Ebay is equally problematic because everyone snipes and prices go way too high if more than one person has a high snipe for a card they want. So I question where people get all their cards -- or if all of us, as collectors, simply like to bitch and moan about the prices we pay for what we collect, since obviously none of us are getting any deals anymore.

You Don't Want to Believe It But It Is a Zero Sum Game

Posted By: peter chaoI haven't stopped buying. The sad part is that as your tastes get more sophisticated, the items get more expensive. So I'm in the category of bitch and moaning about prices. <img src="/images/happy.gif" height=14 width=14> Peter

You Don't Want to Believe It But It Is a Zero Sum Game

Posted By: Cobby33When all is said and done, you're out about 10% with eBay/Paypal/etc., and this doesn't count the time listing, shipping, etc. With auction houses taking 10-15% from the final sale, I say go for it (on bigger ticket items). Let them deal with the listing, PR, shipping, etc. and they can gladly have my 10-15%. They also get a "different" audience than eBay and you don't have to deal with all of the stupid questions that come over eBay and chasing NPB's. On cards < $2-3,000, I'll do them myself on eBay.

You Don't Want to Believe It But It Is a Zero Sum Game

Posted By: John H.Peter C., No one is asking anyone to speculate on anything. Where do you get that idea??? Items go up for auction, many of them almost unbelievable in their rarity and many others are items that I, and I'm sure others, didn't even know existed. People can bid for speculative purposes if they so choose but I would think that, for the most part, it's collectors that are bidding on items of all types and values. John

You Don't Want to Believe It But It Is a Zero Sum Game

Posted By: Jason LI buy cards that I like I buy cards that I think I need or should own I often spend more than is prudent I like to buy cards The cards I like to buy are eventually owned by me I am a winner!

You Don't Want to Believe It But It Is a Zero Sum Game

Posted By: peter chaoThe auction houses love you. <img src="/images/happy.gif" height=14 width=14> Peter

You Don't Want to Believe It But It Is a Zero Sum Game

Posted By: Joe PelaezMain Entry: 2hobby Function: noun Inflected Form(s): plural hobbies Etymology: short for hobbyhorse : a pursuit outside one's regular occupation engaged in especially for relaxation - hob·by·ist/-be-ist/ noun Pronunciation Key More Information: Audio <img src="/images/wink.gif" height=14 width=14>