19 Top Tips for Beginner Sports Card Investors to Make Money
, by David Riska, 11 min reading time
There are a lot of pitfalls awaiting new people who are coming into the Sport card hobby and there's a lot for them to learn. Don't make the same mistakes ...
This is a critical post for anybody who is newer to sports card investing or collecting. If that is you, sit back and take some notes. There are so many new people pouring into this hobby and we love the fact that we have all of these new people rushing into the hobby. We welcome them with open arms, but to be frank, this hobby is complicated. There are a lot of pitfalls awaiting new people who are coming into the hobby and there's a lot for them to learn. Unfortunately, there are probably some expensive lessons that most new investors and collectors learn when trying to get into this hobby and trying to figure out how to buy things at a fair price, how to sell things at a fair price and just figure out in general what they're doing and how to navigate this hobby, especially from an investment standpoint.
We want to help those newer investors and collectors avoid some of those pitfalls that so many of us fell into when we got back into the hobby. Now we start with the 19 tips new sports card investors must know. And I have also turned this into a blog post.
- Our top tip that you must consider as a new collector or investor coming into the hobby is … have fun. The hobby is meant to be fun and you should be having fun buying and selling sports cards. If you are here simply for the purpose of making money and you don't have a love or a passion for the sports cards that you're buying and selling, there are better and less risky ways to make money. There are other things that you can do that maybe are more aligned with your passion. Pick a side hustle that is more aligned with something you love doing.
- Invest in what you know to be effective at sports card investing. You really have to understand the sport and the players whose cards you are buying. If you are getting into buying cards of players or sports who you don't really know and you don't really understand, you could be setting yourself up for a lot of trouble. You are far better off investing in what you know.
- Making money flipping cards is harder than you think. The market is very, very volatile for sports cards and whatever today's hot rookie card is, that card may be worthless a month from now. So you are taking a risk whenever you are getting into sports cards from an investment standpoint and there's a lot to it. It is not as easy as it might look, so just be aware of that.
- Don't forget the taxes, fees and shipping costs. One reason it can be hard to buy and sell sports cards for profit is because of the taxes, fees and shipping costs that get added to every transaction, especially if you're buying and selling cards online.
- Here is a critical one that new collectors investors get wrong all the time. Always, always, always look up the price history of a card before making a purchase, and you should never buy a card unless you understand what the fair market value of that card is.
- Negotiate, negotiate, negotiate in this hobby … everybody expects negotiation and in fact, unless you have verified the prices being asked are fair value, rarely on auction or card sites should you ever want to hit the buy it now button because oftentimes people list cards at a buy it now that's at least 150% or more beyond what the actual market value of that card. If there's the option to make an offer, you almost always want to make the offer, and you should make it at a fair price but not a super low ball price.
- When buying on auctions or websites always read the full description and examine the photo. Even today as mature as this industry has become, unfortunately, a lot of sellers try to trick new sports card investors and collectors by using misleading headlines or by disclosing damage to a card buried in the description somewhere. For instance watch out for tricks like someone putting in the title of their eBay listing PSA 10 question mark, which means that it didn't actually grade at a PSA 10.
- If you are buying/selling on sites like eBay or Amazon, build a positive reputation as soon as you can, especially before you try to sell high-end items.
- Consider how much risk you are willing to take and invest in the right category of cards for you. So buying cards such as new rookies or players in their first couple of years is a high-risk, high-reward game. Maybe well-known vintage cards might be more appropriate for you if you are looking for less risk and a smoother ride with a higher percentage of wins. No matter what, realize Sports Card Investing is a risky investment compared to other traditional investments like stocks, bonds, or real estate, but it can certainly yield high rewards if you are good at it.
- In general, focus on quarterbacks and football shooters in basketball and home run hitters in baseball. The reason for this is simple people love investing and collecting in players who put up big offensive numbers, who are on the highlight reels, and who are exciting to watch. That's who people love to buy. They generally aren't buying defensive players, they generally aren't buying middle game relievers or subs, they're not as exciting, they're not as interesting, and they're not putting up as many highlight real moments.
- Buy graded cards whenever possible unless you're buying cards from a brand new release that just came out where there are no graded cards yet on the market. You should really only be looking at buying graded cards from an investment standpoint and naturally, you want to buy the best grade possible. Typically, you're wanting to buy PSA 10 s or BGS 9.5 or above for modern cards.
- Know exactly what card and variation you are buying. It is extremely confusing when you're trying to buy cards, the number of different color variations, and the number of different inserts that exist with even one particular set of cards can be overwhelming.
- Invest in scarcity in general, the rarer the card, the more valuable that card will become over time. Serial-numbered cards are good to invest in. For this reason, we always like investing in serial-numbered cards because they have scarcity built into them based on the very fact that they're serial-numbered and tough to get autographs. Premium patches also can add scarcity to a card and make it more sought after. For graded cards, check your population reports.
- Invest only in validly licensed cards and sought-after sets. For the last several years, Topps is the only manufacturer that has been able to make licensed MLB cards. That means MLB cards that have the baseball team's actual logo on the cards. Panini is the only manufacturer that's been able to make NFL and NBA-licensed cards with the team logos and Upper Deck for hockey cards. Therefore, those are the cards you want to be buying because you want to get the actual license cards from those manufacturers. License cards are the only cards that are going to hold the most value over time. Concentrate on the sets that are the ones that are the most popular and on the brand names that are most popular because there are quite a few fringe brands that may come and go and they may make them one year and not make them the next year. That's not good from an investment standpoint.
- Generally, invest only in rookie cards. When buying cards from an investment standpoint, we only buy a player's rookie cards. We don't buy their second year, third year, fifth year, 8th year. We are only interested in buying their rookie cards from an investment standpoint and the reason for this is pretty simple. Every player is only going to have one rookie year. A star player may last in the league for 18 years or longer. That means they're gonna have 17 years of cards that are not their rookie year. That's going to be an exponential amount of cards after their rookie year.
- Have a strategy, have a plan, and don't be impulsive. Don't overreact to a player's recent performance, but take advantage of the fact that many of the people in this hobby do overreact. The sports card hobby, in general, is a very reactionary hobby and you can bet that if a rookie player has a hot game tonight that his cards will be selling like crazy tomorrow and the listing prices on his cards will have gone up substantially. We have seen that pattern time and time again, but don't get caught in the hype. Be measured about your approach to what you're buying. Don't overreact to one particular hot game and start buying that person's cards up quickly.
- Don't buy a player's cards the first week they hit the markets. Whenever a new set comes out, the first batch of cards that hit eBay from that set is generally overpriced. Wait a couple of weeks and normally all of those cards will come down quite a bit in value. Sit back for a little while, let the market settle itself, and then if you're ready to buy then.
- Opening boxes for fun, but not for profit. Let's face it opening boxes is a ton of fun. Everybody loves to do this … ripping, wax, ripping open packs of cards … we still love the thrill … but it's a bit like gambling. In order to make money from opening up packs of cards, you are dependent on there being a big hit inside that pack or inside that box. It's like a slot machine or a Lottery ticket. Occasionally you'll hit the jackpot and you'll get a really big hit out of the pack, but more often than not, the cards in the box that you just opened, the market value of those cards are going to be worth less than what you paid for the box. So opening boxes, in general, is not a good investment.
- Some tough love here, but the reality is you'll never know the right time to sell, so don't wait until it's too late, and don't beat yourself up, if you sell a card for a profit, but then the card continues to go up after you sell it. Likely you will never time the market perfectly … pretty much no one ever can. So it's very rare that you'll ever be able to sell at the peak, but you don't want to make the mistake of waiting too late to sell and then losing the profit that you could have had by selling a card earlier. As a rule of thumb for me, whenever we acquire a card, we like to set a threshold that I am then going to sell the card at. Just like in sports a win is a win.
Thanks for hanging in here with us for these 19 tips as a starting Sports Card Investor that can keep you out of trouble and make the hobby not only fun but a lucrative way to make money.
This blog post is sponsored by Whatnot Auctions. If you want to have a ton of selling your cards or buying tons of cards go check out Whatnot now!Tags
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