TCGPlayer, Ebay and You

Written by LegitMTG Staff on . Posted in Finance, Magic Culture

I got the email two weeks ago, and I brushed it off at first as another spam message from a Magic website trying to sell cards.

Later that night I was roaming around an online forum to talk about the spoilers coming out and saw a post titled “TCGPlayer to allow Individual Sellers.” That piqued my interest, and I opened up the thread to read the news.

Of course, that news was just what it sounded like. TCGPlayer had made the announcement that you no longer had to be a “store” to sell on the site. Anyone willing to put some effort into it could jump in the game!

A quick search through my Deleted Items later, and I had accepted the invite and decided to get into the game. Of course, “getting into the game” meant I had some research to do first.

The conclusions I’ve come to as a result of that research have led me to believe this is a big change in the secondary market and one that we all need to be aware of. I’m going to save you some trouble and let you know what this means.

The Basics

TCGPlayer will allow anyone to sell on the site, with a few restrictions.

The first is that there are “seller levels.” Everyone starts off at Level 1, where you can list a maximum of 10 items, the maximum price for any one item is $100 and you can only list up to $400 of items. You can advance to Level 2, where your maximum limits increase, when you have at least two orders that have moved “past the processing state” and your feedback ratio is above 80 percent. This proceeds all the way to Level 4, where you can list whatever you want.

Note that the percentage TCGPlayer takes doesn’t change at any level. (We’ll get to this later.)

There are three options for shipping costs, and you can’t change it on a per-item basis. The three choices are $.99, $2.50 or $4.

The final sell price of your item PLUS the shipping creates the “total sale price,” and from this number TCGPlayer takes 11 percent plus a flat fee of 50 cents. For example, if you sell a $99 card with $1 in shipping costs your final sale price is $100, of which TCGPlayer takes 11 percent ($11), plus 50 cents. In this case you are entitled $88.50.

TCGPlayer processes payments five days after the expected delivery date of your item (if you don’t include tracking) or five days after the tracking number can be confirmed as “delivered.” Payments are processed on Mondays and deposited directly into your bank account.

Remember, if you are a heavy seller on TCGPlayer you are responsible for paying taxes on the income you receive. Most states differ in the amount you have to make before you must pay taxes, but it’s a good idea to keep track of all your sales and be prepared to pay taxes at the end of the year if you plan on selling heavy volume.

TCGPlayer vs. eBay

I’m sure this is the big question you all have. We’re used to auctioning cards on eBay, and it’s a practice that will usually net you slightly better than buylist prices in exchange for more of your time.

So how does TCGPlayer stack up to eBay?

TCGPlayer fees are easy to determine. It’s always 11 percent plus 50 cents. EBay is a little more tricky. EBay auction fees (the most common way to sell) are a constant 9 percent, and you can usually list for free unless you sell more than 50 items a month.

At first glance, this seems better than TCGPlayer. But you get hit a second time around on eBay because of PayPal, which eBay owns. PayPal takes 2.9 percent plus a flat fee of 30 cents on every transaction. That means you’re looking at 11.9 percent plus 30 cents for auctions. And for Buy It Now items, the fee increases to 11 percent plus your PayPal costs, so that makes it 13.9 percent plus 30 cents.

This makes it pretty clear that for an item worth $99 plus $1 shipping, you’re doing better with TCGPlayer, since you pay $11.50 in fees compared to $12.20 in fees for Ebay.

Of course, that’s only for auctions. Since you’re listing on TCGPlayer at your desired price, it’s a lot closer to the Buy It Now options on eBay. And unlike eBay, there’s no initial fee for listing, which saves you a quarter or so for every listing. With the same $100 sale, you’re looking at $11.50 in TCGPlayer fees as compared to $14.20. It may not seem like a huge deal at first glance, but that sort of thing adds up quickly.

The next step is too look at the prices from both. Here, I have some experience already.

I sold three Thundermaw Hellkites in separate orders at $33.99 on TCGPlayer in my first few days. On eBay, auctions are closing anywhere from $28 to $34. Considering the variability in ending auction prices on eBay, I think it’s pretty clear I was better off selling through TCGPlayer.

Finding the Threshold

Rather than work on a $100 limit, let’s change it to something much smaller, say $5 for something like a $4 Inquisition of Kozilek and $1 shipping.

On TCGPlayer, we’re paying $1.05 in fees. On eBay, we’re paying just 95 cents in fees. The reason for this lies in the flat fee of 50 cents on TCGPlayer, which stands out more prominently the lower your total sale price goes.

This is basically a negligible difference when it comes to the two sites, but if you have a dozen Inquisitions to sell, it’s worth checking into buylists. Even though you may be getting less per copy and incurring your own shipping costs, you’re not eating fees on every copy.

Verdict

When it comes to pricing and fees, TCGPlayer is a clear winner over eBay. That said, there are a few things to keep in mind.

  • When you set up an auction on eBay, you guarantee (in all likelihood) that you’ll have a buyer. The same thing doesn’t happen on TCGPlayer.
  • TCGPlayer is a “race to the bottom.” Anyone can come along and undercut your price at any time. Basically, it’s a reverse auction in which sellers are competing to have the lowest price instead of buyers competing to have the highest. When supply outstrips demand, prices will fall fast.
  • One of the ways to gain an advantage on TCGPlayer is to have more copies available. As more individual sellers enter the market, there will be a lot of listings where the seller may have a good price but just one copy for sale. People will pay more per copy if they can get them all at once and only pay shipping once.

And this means … ?

There’s plenty of value in this if you like to sell on eBay or anything similar. But this also marks a fundamental change in both the market and the way trades go down on the floor.

Because more people can sell on TCGPlayer than ever before, as they come to the service in the next few weeks or months the Mid price on TCGPlayer will come down, even if it’s just a bunch of single copies listed. That makes a lot of difference when you’re trading based on TCGPlayer Mid out on the trade floor, since it pushes the site closer to eBay prices. The gulf between the two typical trading points of “SCG prices” and “TCG prices” will widen.

But until we reach that point, you’ll continue to be able to get more for your cards on TCGPlayer than eBay because people view it as “retail” as opposed to “auction” even though there isn’t much of a functional difference anymore.

I think the effect will be more pronounced when cards start to spike. Let’s look back at Thundermaw Hellkite. When it started going up, stores jacked their prices up quickly so that the TCG Mid rose quickly, almost in line with SCG.

EBay, meanwhile, rose much more slowly. As more people come to TCGPlayer to sell individually, that means more people listing as the price of a card begins to rise. TCG will rise much more slowly than something like SCG or any other major retail site. Learning how to best navigate these waters as these situations arise in the future will be an important tool. That mostly means picking up rising cards at TCG prices in trade will be lucrative, especially if you are able to then turn around and list on TCG and out it in cash at nearly what you traded for it at.

In conclusion

I think selling on TCGPlayer is a good thing for those of us who are used to buylisting our cards; it gives us a much better out than eBay for casual stuff like the Rhys the Redeemed I just sold. For those of you who are used to selling your cards on eBay, I would recommend taking a look at the new options at TCGPlayer. It may not be worth it in every case, but there are plenty of situations where it might make sense.

The fact that TCG has essentially undercut eBay means there could be an opportunity for someone else to do the same if a site could be profitable with a lower cut than 11 percent. The biggest problem with this is generating enough traffic for the site, but it could happen. Just some food for thought.

Thanks for reading,

Corbin Hosler
@Chosler88 on Twitter

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