Why Your Cards Sell for Less (Auction vs BIN Breakdown)

After breaking down PSA 9 and Beckett findings on Instagram last week, this episode returns to fundamentals: how to actually make money in sports cards.

You'll Learn:

• The MLD Framework (Market, Legacy, Design) for valuing any card in 60 seconds
• The Rule for Auction vs BIN... and when to break that rule
• The velocity of money principle: fast nickels vs slow dimes
• How to identify demand windows and downshifts
• Speculation vs investment: knowing which bucket your cards belong in

The data is clear: sellers using auctions get 14.4% more than Buy It Now listings*. But there's a catch—and it matters for high-value cards. This episode breaks down when to use each strategy, how to ride attention cycles, and why capital that isn't working for you is working against you.

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#sportscards #cardcollecting #investing #slabnomics #ebay #soccercards #auction #cardflipping #MLD #velocityofmoney

 *"Auctions versus Posted Prices in Online Markets," published by Liran Einav, Chiara Farronato, Jonathan Levin, and Neel Sundaresan.

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Transcript

0:12

Hello everyone and welcome to Slabnomics. Today's podcast is going to be a little bit of review. I'm going to go over some of the fundamentals. I'm going to talk about what's been going on in Instagram lately on my Slabnomics account. And of course, because I'm here to help you make better financial decisions, I'm going to at the end talk a little bit about auction versus buy it now, which one's going to put more money in your pocket. So let's go. First of all, I want to go over what's been going on in my at Slabnomics account recently. in the last couple of weeks, things have been going amazing. I had a post that went a million views plus Everyone was so excited about that PSA nine is dead concept. And that gem rate is actually what determines if a PSA nine. is going to be valuable or not. That might be a little bit counterintuitive, but to you, you also might be looking at it and saying that makes a lot of sense to me. So one of the comments Someone said, turns out it's all just supply and demand. Fact is, the guy is absolutely right. So instead of me researching everything, I can just spit some economic fundamentals to you guys and you'll be absolutely fine it seems. But in all reality, he is absolutely right. It does come down to fundamentals. That's why in the beginning of this podcast, the first thing I said was, I wanna talk about fundamentals a little bit. Now, if you've been listening to Slabnomics for a while, Or if you came in later and binge listened to all the episodes early on, you're a saint for doing that. I still need to go remaster all of those someday. already know that I value things with market, legacy, and design as the three pillars. Now, why is that important? It's because in today's day and age, all we have to go on are comps. And if all you use in order to tell yourself what the value of an asset is, is what someone who's willing to pay for it at some point, you might get directionally right, but you're going to miss a lot of valuations that you can get from just looking at these three simple things. What is the market of a player? How is that going to change for better or for worse? What is the legacy that that player is currently at? What kind of archetype is that player and how is that archetype valued in the market? How is that possibly going to change? And then design this specific card in question. What set does it fall within? Because a set is actually the boundaries that shape the long term growth of an asset. So market legacy and design is a player's market going to get bigger. Is he going to get traded somewhere? Is the legacy going to change? Is he maybe going to get catapulted into the goat conversation at some point and design? Is this set under value? Do people not understand some nuance or perspective? Maybe only the real ones know how valuable this is. So talking about market legacy and design lets us have the framework. with which we're able to evaluate what a card's worth is and how that can change. Now you might be saying to yourself, that sounds like way too much to do. Totally get it. If you have hundreds of cards, thousands of cards, maybe it's just too much to go through every time. However, when you start thinking of it in these terms, you're going to slowly but surely train yourself to think about every new card in that way. And it's only three things that you really need to think about. And that's going to be a guiding force for you going forward Because at the end of the day, You only have a set amount of budget to be able to put it into sports cards, whatever that budget is, whether it's five bucks a day, whether it's five thousand dollars a day, whether it's five million dollars that you're going to put in, it could be anything, whatever that is, you want to aim at being able to maximize the output of those assets that you're going to be putting your capital up against. The minute you press purchase on a card, the minute the timer starts to tell you in what percentile that decision will fall Now you might be saying to yourself, this is just a hobby. It's supposed to be for fun. It's supposed to be for passion. I completely understand that. In fact, a lot of the cards that I have in my PC, I don't really worry about what the price is. I have them because they say something to me. There's cards that I get that are just base cards in a PSA 10. And it's because I really like that certain set. And I want to have that memento to be able to look at it and think about what it means to me. So that's the collector in us. But if you're someone who wants to make a little bit of money in sports cards and you want to have a little fun with being able to do that, that's what we're talking about here. When you make that purchase, it doesn't have to be rocket science. You don't have to make a whole spreadsheet based off of what your calculations are, which I do way too much. But if you just think of those three simple things, you're going to train your brain in to make better decisions little by little. Now, another fundamental that becomes really important there is the velocity of money. So let's say you made a decision. You think that your purchase was fantastic because of X, Y and Z. catalysts that you see coming in the market. You get your card in two weeks later. but now your card doesn't move. Now, if you're in a small market like I play in, which is soccer, the cars don't move a lot. So you don't know if you're right for a long time. that's why it's important to have an investment timeline. So I always recommend to everyone when you buy that, when are you buying four in terms of an exit? And again, this is for non PC cards. This is going to be for cards that you want to flip at some point, whether that's short term. or long term. call that speculation versus investment. It's the same thing in the stock market guys. If you buy a stock because you think it's going to go up and you're going to sell it in a month, that's speculation. That's not investment. Same thing. If you buy a stock that you're playing on holding for one to five years, that's an actual investment. You're putting the money into something and allowing time to compound that asset. So the same thing happens in sports cards. If you're looking on this long term horizon because you think that there's something in the market, it just doesn't understand this thing. But in two months, this event's going to wake everybody up. That's a speculation. If you think, I see that this thing has a really low pop and this player is understated in terms of his relevance to sports in general or this one specific sport in particular, that might be more of an investment bucket. And you should keep those differentiated in your mind Now there's a lot of betting going on in the hobby right now. When we look at things like breakers, when we look at even how sets are organized, sometimes you have sets that are totally worthless unless you get one hit or two hits. Even the terminology, the lexicon that we're using their hit. It's like we're at a blackjack table just trying to open a box of cards. Things have changed, but that doesn't mean that collecting isn't important. It's still critical. still the lifeblood of the hobby, but you also have the moneymaking thing that goes hand in hand with that. So back to the velocity of money guys. They say it's better to have a fast nickel than a slow dime. In the same way that investment in the stock market, when you leave it there is able to compound year after year after year. And that's what leads to those outsize gains. That can often be the case in cards as well. If you've ever bought a hot prospect and you were so excited, I know that this guy is going to put up stats. he was drafted lower than he should have been. I saw him when he was playing in school and he was just undervalued sixth man off the bench. wherever it is where you think you have an edge on knowledge that the market doesn't quite have yet and you're going to go prospecting digging for gold. Some of the times it works out and you're probably going to have the biggest wins right there. Maybe you get 20, 25 X almost overnight when that player just lights it up and all of a sudden his tiny market gets flooded with new money. But more often what happens is that prospect is just going to be a decent player and decent players don't get investment. I say this a lot, but 95 % of cards are going to go down long term. And I truly believe that. And I think about that when I make purchases. So how do we know if we're actually buying low and then how do we know when we're actually selling high? Well, if I knew that, I'd be on an island somewhere talking to you guys, but I can give you some fundamentals. First off, look at volume. If you have an uptick in volume before a player's price goes up, a lot of times that is a sign of things to come where prices are going to get moved up after the initial supply is taken out by the first wave of buyers. Second thing to think about is why have prices been moving down? What have been the causes? And then will those causes continue? Will they get worse Or will something happen where the market no longer values them that way and they're no longer important or the player makes a change? Third and last thing I want you to look out for, where is the money going? That's a little bit of a callback to the volume, but where is money flowing in the real world as well is going to give you a lot of idea where money is going to flow into those assets, which is capturing people's attention at the right time. So there's some fundamentals that we're just recapping right now in order to help you guys make better decisions on the daily. If you're liking what you're hearing so far, go ahead and give me a like if you're on YouTube. And thank you so much for following me on Instagram. That's where I put out a lot of my content, where I do deep dives into the stuff that I can only gloss over here. Also, quick shout. Someday I am going to get this feed better on YouTube. I promise it's going to be more produced, more captivating, more engaging. But right now I'm running a lot of different things in the background. So when I have more time to free up into things, I'm definitely going to make SLABnomics better. But thank you for being patient with me and keeping with me during these times, guys. So I told you I was gonna give you guys some secrets and not just do a recap. So I'm gonna do that right now. And the funny thing is, guys, I don't know what to do episodes on. Usually the day before I get up here and start doing my podcast. I need you to tell me what you're thinking about. What's important to you? What are you seeing out there? The questions that you want answered. Go into my DMS, shoot those to me so that I can know what to bring for you on slap dynamics, because this isn't for me. Just talking to a phone camera the entire time. I want you to be telling me what you need me to give you. Help me help you. So hit my DMs. I'm always very responsive there. You can always leave comments as well. see all those. So the thing that I started diving into was selfishly for me, because I also buy and sell sports guides guys under Canary Cards. I wanted to know what the difference was in price between auction and buy it now. Surely there's got to be enough data by now 30 years into eBay that we should be able to have some kind of numbers on that. So I ran a deep research report on this tabulated multiple different sources, especially this one. Standout Report from Stanford Research. was called Auctions vs. Posted Prices in Online Markets. And it looked from 2003 to 2009 data and it would compare the same object in a buy it now vs. an auction to see what the price spread was in the difference between the two. Now this is where you get to guess. Do you think auctions are more or less in terms of the prices than buy it now? If you said auctions are less, you are 100 % right. And in fact, what they found was that in 2003 there was actually a much smaller difference than there was in 2009 and and most likely now even worse In 2003, they found the difference to be 4.7%. Now, that's pretty much just a rounding error and well worth the time of being able to know when your stuff's gonna sell. However, in 2009, after all those six years, a lot had changed in the world, and they found that the spread had widened to 16.5 % between auction and buy it now prices. The study went on to say that the cause for this is that in 2003, winning auctions was fun. You could go and you would get the adrenaline from sitting there being able to snipe someone and people get so excited because there just wasn't that much out there to be buying and selling. You remember 2003 most stores weren't online. The whole concept of online shopping was pretty much through eBay. Those were some wild times where people would go to auctions in person, find stuff that people thought was absolute junk, throw it on eBay and just make a killing because no one at these auctions in person could look up prices. Because how do we do it? eBay. So in 2003 to 2009, the internet absolutely exploded and our attention was pulled in so many more directions. People would go on eBay because it was fun. Now 2009, people made it into a business. They made it somewhere to go to be able to source inventory and maybe sell it in other places. The study calls this Lambda. Lambda is the hassle variable. Nowadays, if you want to go win an auction, it's a hassle. You have to go at the time of the auction, or you have to use a sniper, or some auction houses don't let you use a sniper. Because we have so many more choices now versus 2003 and what we can do. We have scrolling Instagram mindlessly. We have sports on that we can get pretty much anywhere into our home, any movie, any TV show, all at our fingertips, always. So that's what killed our auctions. No, but auctions actually still have their place for two different reasons. First off, auctions are important when the market doesn't truly know what the value is. I find this a lot because as I mentioned before, I sell a lot of soccer cards. Sometimes when I sell a card, it hasn't gone for a year. So if you put out buy it now, it just sits there because people have no idea what they're supposed to pay for it. Everyone comps when you don't have a comp for a year people get gun shy. But when you put it up for auction that gives people zest. this hasn't sold in here. I get to go bid on that and then you get the chase and the emotions go into it. I'm going to be the one that wins it. The first one that's gone in a year. So if it's an in demand card and hasn't sold for a while, go ahead and auction that sucker. The second reason, and this is more practical, if you need to get your money out in a certain timeframe, if you put something on auction, it will sell. So if you put it up there, you know, you're going to get it within eight to 10 days, So if you want to run liquidity cycles where I know that I'm going to get this product in, put it up, and then within X number of days, it'll be sold and I'll have that money back. That's an easier way for you to be able to use your inventory cycling and compound if you make your decisions wisely or if you buy really strongly. Buying strongly is something that I've touched on before, especially in my one year of lessons, I had a buying segment, a selling segment and a grading segment. So a refresher on the buying strongly stratagems. You can go ahead and listen to that anywhere where you have podcasts. So to recap all of that, if you want something to sell that is more of a commodity, it sells pretty regularly, then go ahead and just put in and buy it now and put out the price you want to sell it at. If you instead want to get the money out really quickly and the item doesn't really sell that much, probably better to put it on auction as long as it's a player in demand. If you put some player no one's ever heard of at auction, that's where it ends at a and by the way, starting things at a dollar is actually psychologically important. It makes more people chase things and makes more excitement at the beginning of the auction, which tells the eBay algorithm that this item needs to be shown to more people. And it also tells the people that are bidding, hey, social proof. This is something that I should be excited about. So always start your items at a dollar. The real ones know that. Now, there's one option I did not talk about yet, and that is best of both worlds? If you list something by it now with a best offer, this has actually been shown to be the worst of the worlds. In that study that I referenced, they found 14.4 % less funds for an auction versus a buy it now. But when you had an auction running at the same time as a buy it now. it actually ended at 18.2 % lower. So there's a couple of things that people do with the best offers on a buy it now. Sometimes people just use it to fish in order to see where people are going to get. I like to think of it more as whatever I set my minimum at someone's going to find and then why don't I just put it by it now. But what people really got upset about was when people according to the study was when people would put best offer on and then they would have their low they would have their auto decline set to like 5 % or 3 % or the lowest possible stuff. People feel kind of cheated by that because I think people think it's fair to offer 10 to 15 % lower on the buy it now offer. So if you're a seller, just set it a little bit above market and then give yourself 10 to 15 % of room. If you're a buyer and you're really trying to get that thing, think that maybe they aren't trying to sell it. That could be possible. They could just be fishing to try and get information on what people want to offer on this thing. If they really are going to take your offer seriously, then they're not going to have an auto decline that's very, close to the buy price. Although sometimes people are trying to get you offline in order to buy on Instagram But I think that's becoming less and less in vogue than it was a year or two ago. Not to say it doesn't still happen. Certainly does. But especially in this day and age where we have a lot of bad actors coming in because more money is flowing into the hobby, it's more important to be safe a lot of the times and operate within the bounds of these things than to try and cut off 5%. But of course, I leave that to you. Anyone that's been burned by those things does know that it takes a lot of judiciousness not to get burned. So in summary guys, this difference between 2003 and 2009 was just a fundamental shift in how buyers viewed the process. We're shifting more and more into an attention market. Whatever is getting the most attention, that people are going to get frenzied over. Think about the boobies. And it makes sense if you think about the world as a whole. We've seen so many things. We have so much information at our fingertips. And now it's really about authenticity and whatever can capture our moment and our hype at one time. This is why when I talk about demand windows, it's important to think of it that way Because when asset classes start popping off, they're usually siloed into specific things. I've noticed this very clearly as I sit here and watch these markets day in and day out. These demands follow cycles. Kabooms were just so hot, but then they even got hotter. Then Kaboom got to a point where it was just too much and everyone wanted to lay off the gas and find the next thing that wasn't as crazily priced. So they started looking more at Colorblast. And I find this one-two punch happen a lot. Case in point in the soccer market, which by the way has not even started, get ready for two months from now, it started with Messi and then after Messi went 3X, it went to Ronaldo because he was just too cheap compared to Messi and people noticed that. Same thing with Kaboom's to Colorblast. Same thing with the first year of Prism, then going into the first year of Topps Chrome, although that also has something to do with that attention economy I was talking about before. There's gonna be a lot of fanatics in front of people's eyeballs going forward. So if you are thinking about selling cards, think about how much time do I have? Is this item a commodity versus a rarity? And when has it last sold? you should be able to figure out if auction or buy it now is going to be your friend. But through it all, always ride the wave of attention, because it compounds. What you're going to find is things compound to the bad and they compound to the good. you're in the middle of the season, Drake may all of a sudden starts going superhuman and the Patriots are extremely good, way better than anyone thought they could be. Drake May is the new guy. Maybe he was the best quarterback taken that year. He's front running for MVP. Everything comes together into this huge demand window, and you're going to see certain assets all at once just pop off. In the same way, things go to the negative. If it's offseason, And buyers aren't really excited about this sport, and they've moved on and they're looking at a different sport right now. And that player kind of had a whimpered end to the season. And maybe there's some off field stuff going on. If you sell that asset that you have of that player at that time, you are going to get absolutely hammered, like 60, 70 percent loss on that kind of thing. So everything compounds, you pick your moments, understand where the cycles are going and understand where you need to deploy capital and then bring capital back. And at the end of the day, to make it even harder, you also have to remember that capital that's deployed that isn't working for you is technically working against you because we call that the time value of money. So, cut your losses, let your winners ride, pick your timings to go in and to go out. Hopefully you guys enjoyed this podcast. Make sure to give it a like if it was valuable to you. Send it to a friend who you think could learn some of these fundamentals or something you guys talk about. That really helps me out. I appreciate you guys. Second thing my comp newsletter is now in I put my second one out this past Saturday. If you sign up for that newsletter it's going to go over deep dives of what I've seen as far as the numbers go. It's going to have a bunch of asset classes that track weekly so you can see how they moved. And then it's also going to do some deep dives about news as well as concepts. So all of that goes in nice free news. Larry, do you guys go to Slavenomics.com? Put in your email, go to your email, confirm it. Boom. You're on the list. Thank you guys so much for coming in and also for all the support on Instagram. I still can't believe I got a million views on that PSA nine is dead. As always, keep building and I will talk to you later.