Observations on the current state of the hobby from a show this weekend

[KhalDrogo]

Originally Posted by mfw13

Explain....

IMHO, access to cheap capital (which is affected by interest rates) is also hugely important, as is consumer confidence (which is affected by asset values).

If we have a 2000-2002 style crash (Nasdaq down 80%, S&P down 50%) or a 2008-09 crash (S&P down 50%), do you really think that wouldn't affect sports cards negatively.

You've got a whole generation that has never seen anything but a rising stock market and low interest rates....

Dotcom crash and housing bubble crash took unemployment rates to 6%+ and 10%+, respectively. You don’t get major market crashes like that without a substantial rise in unemployment.

I don’t know what kind of access to capital you think your average hobbyist has outside of their credit cards, for which interest rates have less of an impact on given how high CC interest rates sit at baseline. People find a way to pay for this stuff so long as they have cash flow from their job.

[auctionjmm]

Originally Posted by hermanotarjeta

Also, is grinding in the hobby really a job?

Some people actually enjoy the challenge and drive to make money in the hobby - they are passionate buyers and sellers of cards, and not necessarily fans of baseball cards themselves.

In fact, it feels like they accumulate more satisfaction flipping a card than owning a card for their own collection.

They say if you love your job, you will never really "work". That theory would certainly apply to cards if it is enjoyed.

I love my job, but I rarely work more than 165 days in a year. Granted I am paid very well for those 165 days but I'd lose my mind the other 200 if I wasn't doing something else. I find cards to be enjoyable even if I'm just turning over inventory. Even as a kid, I turned my collection over frequently through trading.

[auctionjmm]

Originally Posted by KhalDrogo

Dotcom crash and housing bubble crash took unemployment rates to 6%+ and 10%+, respectively. You don’t get major market crashes like that without a substantial rise in unemployment.

I don’t know what kind of access to capital you think your average hobbyist has outside of their credit cards, for which interest rates have less of an impact on given how high CC interest rates sit at baseline. People find a way to pay for this stuff so long as they have cash flow from their job.

eBay will lend you money through their Seller Capital program but it's not nearly as cheap as Paypal Working Capital was back in the day. Anyone with an established seller account can get it. I played around with their pricing tool but anything above $3,800 more than doubled the fees. If someone is willing to pay the fees, however, they can get the capital. They just have to make sure their profit margins can cover it.

PPWC was like $35,000 at 3.5%. Now THAT was a good program. $3800 does nothing for me and I'd rather just get the rewards from the credit card. But 35K was great and I used that program quite a bit when Paypal was the payment processor for eBay. I actually thought the card market would crash when eBay moved to managed payments since everyone and their mom had Paypal loans at that time. And perhaps it did to an extent. Managed payments finished rolling out in 2021 and Paypal loans were called at that time when there was no longer revenue to pay it back organically.

[OhioLawyerF5]

Interesting discussion on this very topic: https://youtu.be/JUAKJgu6Sd0?si=8n3i0QMGyxVUa_c_

[KhalDrogo]

Originally Posted by auctionjmm

eBay will lend you money through their Seller Capital program but it's not nearly as cheap as Paypal Working Capital was back in the day. Anyone with an established seller account can get it. I played around with their pricing tool but anything above $3,800 more than doubled the fees. If someone is willing to pay the fees, however, they can get the capital. They just have to make sure their profit margins can cover it.

PPWC was like $35,000 at 3.5%. Now THAT was a good program. $3800 does nothing for me and I'd rather just get the rewards from the credit card. But 35K was great and I used that program quite a bit when Paypal was the payment processor for eBay. I actually thought the card market would crash when eBay moved to managed payments since everyone and their mom had Paypal loans at that time. And perhaps it did to an extent. Managed payments finished rolling out in 2021 and Paypal loans were called at that time when there was no longer revenue to pay it back organically.

If the average hobbyist is accessing business lines of credit to keep going, the hobby is in much deeper poop than I thought. Yikes.

[auctionjmm]

Originally Posted by KhalDrogo

If the average hobbyist is accessing business lines of credit to keep going, the hobby is in much deeper poop than I thought. Yikes.

As of 2022, Paypal had loaned a total of 25.6 billion to eBay sellers. (https://debanked.com/2022/08/paypal-...iness-lenders/).

[KhalDrogo]

Originally Posted by auctionjmm

As of 2022, Paypal had loaned a total of 25.6 billion to eBay sellers. (https://debanked.com/2022/08/paypal-...iness-lenders/).

How much to hobbyists though?

[hermanotarjeta]

Originally Posted by auctionjmm

As of 2022, Paypal had loaned a total of 25.6 billion to eBay sellers. (https://debanked.com/2022/08/paypal-...iness-lenders/).

That’s insane.

[auctionjmm]

Originally Posted by KhalDrogo

How much to hobbyists though?

It depends what you mean by hobbyist. Obviously they weren't loaning to strictly buyers. You had to have an established eBay seller account to qualify. No credit check though, so they just needed proof of revenue. I guess any hobbyist who was also selling regularly on eBay had access.

[KhalDrogo]

Originally Posted by auctionjmm

It depends what you mean by hobbyist. Obviously they weren't loaning to strictly buyers. You had to have an established eBay seller account to qualify. No credit check though, so they just needed proof of revenue. I guess any hobbyist who was also selling regularly on eBay had access.

You’re not a hobbyist if you’re taking out lines of business credit to participate in the industry. You’re either a business or a very misguided degenerate hobbyist.

[backtothe50s]

Too many heavy hitters in the hobby that are financially vested, to allow the hobby to plunge or decline. They will prop the hobby up as most people don’t know/realize that millions of dollars in transactions are done EVERY DAY on eBay, LCS, what not, Facebook groups, grading companies, auction houses, etc combined). The hobby is healthy and running on all cylinders! Again if the average person had a clue on how much money is made on the hobby every single day, they would know that the hobby is here to stay! (In my opinion, the hobby is growing faster than we can imagine) also, dont sleep on Pokémon either! Any good seller, is currently adding Pokémon to their sales portfolio/inventory.

[discodanman45]

Every penny I spend in this hobby is using the money I get by selling cards. I would never buy a card with a loan, but I think the majority of people participating in the hobby are. The gambling aspect of breaking and the prices of ultra-modern wax, is creating a scenario that is just not sustainable. Addiction to gambling is real and trying to get your money back with just one more break on a credit card or loan, is happening much more often than anyone can realize.

My daughter loves Pokémon packs and works really hard selling art commissions to buy them. She is in high school and is learning the value of a dollar. If she started this in college with credit cards, it would have turned into a disaster for her.

What we have now is not sustainable. The majority of what I am trying will be "safer" because of the demographic of who collects vintage and pre-war. However, I see a lot of people getting into these types of cards to have a well-rounded portfolio. Investing in cardboard is stupid IMO. I am saving up to spend $4000 to $5,000 on a single card. I am not doing this as an investment, I just would rather have have a few nice cards instead of the close to 2000 slabs I have sitting in boxes right now.

[auctionjmm]

Originally Posted by KhalDrogo

You’re not a hobbyist if you’re taking out lines of business credit to participate in the industry. You’re either a business or a very misguided degenerate hobbyist.

Then no, they weren't loaning to hobbyists. They were loaning to eBay sellers who had regular revenue. I didn't interpret MFW's post as meaning hobbyists would simply access cheap capital to pay for their hobby.

[hermanotarjeta]

Originally Posted by backtothe50s

Too many heavy hitters in the hobby that are financially vested, to allow the hobby to plunge or decline. They will prop the hobby up as most people don’t know/realize that millions of dollars in transactions are done EVERY DAY on eBay, LCS, what not, Facebook groups, grading companies, auction houses, etc combined). The hobby is healthy and running on all cylinders! Again if the average person had a clue on how much money is made on the hobby every single day, they would know that the hobby is here to stay! (In my opinion, the hobby is growing faster than we can imagine) also, dont sleep on Pokémon either! Any good seller, is currently adding Pokémon to their sales portfolio/inventory.

Giant ponzi scheme.

[ThoseBackPages]

Originally Posted by hermanotarjeta

Giant ponzi scheme.

same as it ever was

[hermanotarjeta]

Originally Posted by ThoseBackPages

same as it ever was

#ThanksTopps

[KhalDrogo]

Originally Posted by auctionjmm

Then no, they weren't loaning to hobbyists. They were loaning to eBay sellers who had regular revenue. I didn't interpret MFW's post as meaning hobbyists would simply access cheap capital to pay for their hobby.

Then do you believe hobbyists aren’t the one moving the hobby? That it’s the dealers? If so, even more trouble ahead.

[JoshMN]

Originally Posted by hermanotarjeta

Giant ponzi scheme.

How great is that?

[NickyCards]

Originally Posted by backtothe50s

Too many heavy hitters in the hobby that are financially vested, to allow the hobby to plunge or decline. They will prop the hobby up as most people don’t know/realize that millions of dollars in transactions are done EVERY DAY on eBay, LCS, what not, Facebook groups, grading companies, auction houses, etc combined). The hobby is healthy and running on all cylinders! Again if the average person had a clue on how much money is made on the hobby every single day, they would know that the hobby is here to stay! (In my opinion, the hobby is growing faster than we can imagine) also, dont sleep on Pokémon either! Any good seller, is currently adding Pokémon to their sales portfolio/inventory.

I've often thought about this, the amount of deals I see on Instagram is crazy. I see some users deal with the same sellers multiple times a week. There is an insane amount of money changing hands each day for cards.

[auctionjmm]

Originally Posted by KhalDrogo

Then do you believe hobbyists aren’t the one moving the hobby? That it’s the dealers? If so, even more trouble ahead.

All I can say is the lines are very blurred in this industry. There are lots of people who sell cards, but are still collectors/hobbyists at heart. If I can go back to my 12 year-old self for a moment, I would buy packs of cards, keep the ones I wanted for my collection, and sell the rest at shows or shops to fund future purchases. In many ways, I was building my collection with only the cards/players I wanted, but I was also contributing to the economy of cards by turning over the cards I didn't want and then re-inserting that money into the hobby by buying what I did. The dealers were making money off me, I was making some back from other dealers, then spending more with different dealers, and on and on. My weekly allowance still went to cards, but what I earned from trading out of stuff I didn't want increased my spending power as time went on.

To convert that to an adult analogy, I think there are still many folks who earmark a % of their job wages to purchase cards, while simultaneously selling cards they previously purchased to acquire new ones. So it's a little of both. I think dealers, collectors, and hybrids alike are all moving the hobby together. I do not know, however, which group is most responsible for the boom and which is the most at risk if the economy goes belly-up.

[KhalDrogo]

Selling is a natural part of any collecting hobby. Interests change. Space constraints arise. Life emergencies happen. What is not natural is declaring yourself a business and drawing capital based on that declaration.

In times of economic distress, the average hobbyist will still find ways to participate as a buyer.. The average dealer will not if the path to profit is no longe there. Too many dealers = big problems when things go south.

Now, in my opinion, near-term recession fears and AI takeover risks are greatly overstated. Although I would say the risk of a true black swan or gray swan event is higher than ever in the current climate.

[auctionjmm]

Originally Posted by KhalDrogo

Selling is a natural part of any collecting hobby. Interests change. Space constraints arise. Life emergencies happen. What is not natural is declaring yourself a business and drawing capital based on that declaration.

In times of economic distress, the average hobbyist will still find ways to participate as a buyer.. The average dealer will not if the path to profit is no longe there. Too many dealers = big problems when things go south.

Now, in my opinion, near-term recession fears and AI takeover risks are greatly overstated. Although I would say the risk of a true black swan or gray swan event is higher than ever in the current climate.

All very true.

[hermanotarjeta]

This whole thing works because cards are relatively liquid assets that are accepted by hundreds of thousands of people, in a way like crypto.

No matter how bad the economy, as long as cards can be exchanged for money, that demand will always be there, ie, the very wealthy buying from each other or from the poors when the poors get desperate enough.

However, there really is no intrinsic value to cards in times of true crisis.

[Above the Rim]

Good chance the card market will be fine, even in crisis. Last crisis was a doozie - COVID. Businesses literally closed, no work for many, stock market tanked. What happened to the card market then ?

[JoshMN]

Stimulus checks were a helluva drug.