Recently, I was asked by a professional colleague to discuss the potential sale of a large piece of his collection. He had received an offer on certain cards, had refused the offer, and the offeror raised the price into the six-figure range. He said no and the would-be purchaser then dared the guy to name a price. The problem for my colleague is that the money is really good, but the cards are really good too. He wanted to kick around what he might do.
I am always happy to help a fellow collector talk through the prospect of selling. I’ve been through a lot of the issues myself, and a lot of my writing focuses on how to extract maximum value from a collection, both emotionally and financially. The art of letting go of your collection is part of that process.
The basic conundrum that this collector faced is the same one we all face: we really enjoy owning and enjoying our cards. I am hesitant to use the word “love“ to describe the feeling because love really should be reserved for people and pets, but I do know of collectors who have mourned when their cards have been sold, so I am not willing to completely discount the idea.
The real question is at what point does the financial reality of this thing of ours push past the enjoyment and suggest strongly that one sell. For this collector, he wasn’t a financial position where he should sell, but the money would be a substantial chunk of his income for the year.
So, what did we talk about?
Well, my first thought in a situation like this is the bane of American life: taxes. As you might imagine, the seller‘s basis in the items is a small fraction of what he was offered. That means that the vast majority of the money will be characterized as income of some sort. I urged him to talk to his accountant and determine what he could do to minimize the damage. Since he has owned the items for quite some time, he may qualify for long-term capital gains treatment on it. Of course, the government has punished us collectors by making the maximum rate of taxation on long-term capital gains for collectibles a hefty 28%. Add to your state tax at the marginal rate, and you may be paying as much as 40% of the money to the government. So, I urged him to talk with his accountant and try and figure out where this would fall in terms of taxes.
The next question on my mind and his was how much to ask. The potential buyer apparently has unlimited capital. I had this exact same thing happened to me of a decade ago, albeit on a much lesser scale. I posted some cards that I did not want to sell in one of those show off threads on a chat board and a collector approached me and said that he really wanted them. I told him the cards were not for sale. He said just tell me what you want for the cards. Well, after thinking it over, I realized that I could really use five figures in cash, so I gave him a number. The number I chose was what I thought was a ridiculous price on each item with another 10% on top of that. Well, the sumbitch took it. Now, in retrospect years later, I wish I had not sold those cards, but only because they have gone up in price dramatically and what I thought was a ridiculously high price would now be a ridiculously low price. C’est la guerre: the money went into other investments that did just as well, so I ain’t exactly hurting. My next piece of advice was to pick a ridiculous price, slap a percentage on top of that, and ask for that number. In negotiation terms, that is how you set your high-end for negotiation.
The third question to ask in a circumstance like this is: do I really need the money? If the answer is no, then you’ve got no urgent need to sell, and you have the luxury to decide what your long-term plans are. In my case, I do not intend to sell most of my investment cards during my lifetime because I can hand them to my daughter in a bequest and she can sell them at market and pay nothing in taxes. I do not want to throw away that kind of money on the tax man unless I have to. See, it comes back to taxes again; what a country.
Another observation I had for him was that selling this collection and cashing out massively gave him the opportunity to reboot. I know that if I sold my card collection today, I would be at the next card show actively looking to restart. I would probably do some things differently; I would probably do some things the same. The concept that we all need to get through our thick heads is that selling a collection is not the end of the road for collecting. You just start again.
Maybe the most important thing to remember in these circumstances is that when you are staring down a decision like this all the answers are good. Someone trying to throw gobs of money at you for cardboard is a good thing: no one’s trying to take away your life, your liberty, or your child. In other words, whichever way you decide to go, don’t sweat the answer.
It did get me thinking, obviously, about my own collection, which I’m preparing to move across the country into new digs. I decided to consign some very significant pieces for auction because they are bulky, expensive, rare, and I rarely look at them. I might as well cash them in during a white-hot market. Look for some extreme boxing rarities in the fall Robert Edward Auctions catalog sale and some spiffy baseball items in Love Of The Game.
Our eBay jackass of the week is a Postal Troll. You know these fellows, they look at your listing and decide they’re simply not going to pay what it costs to have the item shipped to them, no matter what. As I’ve said before, I use eBay‘s shipping system to calculate the numbers. I simply weigh the item, put in the package size, and eBay spits out a shipping solution. I don’t even know what the actual price is until I get a notice that the item has sold. I just see a range of prices; the number depends on where the buyer is located. Just this afternoon I shipped two identical packages, one to a city and one to a rural address. The city cost $5.97; the rural cost $8.02. Not my doing.
Well, Mr. Postal Troll wasn’t having it:
“Not sure why you need $12.90 for USPS Ground Advantage on this little booklet, which tops out at $8.40 for 1 lb. Even Priority Mail Flat-Rate Envelope would be just $11.12 (and the best wtg with anything over 100 years old, and fragile).”
Me: “I do not calculate the shipping. eBay calculates the shipping.”
Troll: “Ebay calculates the shipping from the factors in the formula YOU provide. Please REVIEW it.”
What a fun guy! I wonder if he takes things to the post office and then argues with the clerk about how much they cost to ship. How many times do I have to say this: the fact that you want something to be a certain way doesn’t mean you get it. I want peace on earth, good will towards all people, and washboard abs. None of those are going to happen. Shipping with insurance some items to some places costs more…duh!
Me: “It is also two 113-year-old forms that need to be properly packaged. If you are this bent out of shape over the shipping, I don’t want you to buy it. Please do not.”
Troll: “Sir(?) ~ I’ve been on eBay as long as you (two IDs; one buying, and one selling). All I’m asking you for is a reasonable ship fee. Now, if YOU are “all bent out of shape” over such a simple request, then nobody should buy from you. Grow up, child.”
I especially like the part about what a long-term collector he is: yes and? How much it costs to mail something is not a question about how long you’ve been a collector; that doesn’t matter. You don’t get to change the postal rates just because you’ve achieved some self-aggrandized lofty station in life. I wish I could wave a magic wand and alter reality, and that salad tasted like bacon, but that just isn’t how it works.
Oh, and the item sold to someone who had no qualms about paying the cost to have it shipped.