Quote:
Originally Posted by barrysloate
Peter- I think the majority of dealers are upside down on much of their inventory, and in order for them to offer cards at current levels they would be forced to take a loss. Many are not willing to do that, which is understandable.
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From a business point of view, there is a fallacy with that way of thinking, prevalent as it may be.
Refusing to sell at true market prices often means refusing to sell at all. If this is the approach a business opts to take. They better have sufficient reserves to endure an extended period of reduced cash flow.
The money invested in inventory is already spent. It's gone, as far as the seller is concerned. Their profit results from continually buying, and reselling inventory. If their inventory is over valued, good business sense says to take the markdown necessary to move the goods, take whatever revenue they get, and buy more at the currently depressed prices.
Now I can fully understand if a collector, and sometimes seller, prefers not to take a "markdown," but full time dealers are different. A collector can just choose to sit it out and wait for an upturn. A true dealer will find it harder to do so.
Our hobby is filled with people who straddle that line between dealer and collector. Ebay makes it easy for anyone to open a store, with minimal overhead and expense, and become a dealer. A couple of months of reduced sales don't really pressure them that much. But anyone who relies on card sales as their prime source of income will react differently.
10-02-2010, 08:50 AM
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