How the New Fees Affects Card Flippers
Over the last 10+ years, COMC.com (or Check Out My Cards) has been toiling away in the trading card marketplace, striving to become one of, if not THE leader in individual trading card sales. After having evolved from a small web portal known as LowPriceCards.com into the juggernaut that it is in a few years, COMC has emerged with an inventory of over 18.3 Million cards and sells and ships more singles to collectors all over the world than any other service provider.
Led by a sort of “grass-roots” style guerrilla marketing campaign (which to me appeared to be based mainly on word of mouth and appearances by COMC people at the big sports shows), I have seen COMC grow from servicing about 3 million cards in their inventory when I first joined to over six times that amount today. First joining COMC in the fall of 2013, I happened on the website after meeting the owner, Tim Getsch, at the National Sports Collectors Convention. The former Microsoft employee’s pitch was simple enough. “Just try it out,” he told me. “If you like it, stick around. If you don’t, feel free to email me personally and tell me why.” That’s what brought me into the fold as a user. Customer service and the feeling like the owner gets it will most likely win out with me in the end.
Fast forward to this past weekend and the “Huge Announcement” from COMC. Like any company that is looking to survive for a long period of time, the goal has to be to make money. Sure you want the customer experience to be the best and people to love you all the time and what you do but the existential aspect of running a business will eventually give way to the fact that pats on the back don’t pay bills. I’m not privy to any financial information regarding what COMC makes or doesn’t make but I can tell you, the overhead of housing over 18 million cards and other items (they also market other collectibles and comic books now, too) can not be cheap. Couple that with the labor to package and ship single card orders all over the world and there has to be a hefty price tag on non-controllable expenses.
If you haven’t ever heard or used COMC.com for card sales or purchases, let me take a moment to back up and explain the overall experience with using COMC. Essentially, the user experience has always been based on the fact that COMC does the work to sell your cards. You find the cards in your collection to sell, package them securely, and ship them to the COMC warehouse in Washington. Your cost is the cost of shipping, plus the processing fee you pay to them (anywhere from $.30-$1.20 per card) in order to research what you sent them, evaluate the condition of your items, scan fronts and backs of all the cards, advertise online, store and insure your cards, deal with customer service issues, package, and ship to buyers. Yes, they do all of that for you for a fee. In turn, you can control the price of the items you sell, the amount of inventory available to sell, the marketplace exposure for your items (as they have Amazon and Ebay integration) and track all your sales data with the ability to export and analyze both sales and purchases.
My experience had been to purchase singles for my player collections and set-building needs. Eventually, I realized that a simple monetary investment into my account could lead to building a “flippable” inventory. Since 2013, I have set out to casually see how long it would take to double, triple, or quadruple an investment. My target product was vintage hockey (pre-1980) cards and the idea was to spend the initial investment buying some inventory and then price the cards to move at an initial rate of $.10-$.20 more than I paid. This worked pretty well, as I have had over 800 sales since my initial sale on 8/5/2013, making over $930. That’s a $500 profit that I was able to use to buy cards for my own personal collection or restock my inventory.
I am by no means a power seller on here. My sales are casual and and I usually get one or two sales a week now for a card here or there. My main goal was only to create a sort of self sustaining inventory and I am usually able to keep about 300-500 cards in stock at any given time that were purchased through the flip.
Back to the “Huge Announcement,” COMC announced some big changes going forward for their site that has both excited some collectors and angered others. According to their blog post over the weekend, their popularity and growth has been based on the Buy Now- Ship Later model, as in, you buy the cards using the COMC credit you have purchased, they keep the cards for you until you request shipment. This can be that day, a week from now, or never. It’s your choice as the user what you want to do with your inventory. Their claim is that while most sites focus on fast shipping, their results show a decrease the sizes of orders. COMC’s model, on the other hand, leads to orders that are 20 times larger, leading to huge savings for collectors on shipping. This made COMC the leader in the singles market. I’m not sure about the numbers because I don’t have the research but lets just assume that is accurate.
According to their blog post:
“Many sellers have expressed they would like to use our service for more of their mid-range and high-end items in addition to all their low-end ones.”
I personally read that to mean, the power sellers are looking for a way to make more money from their cross platform sales and COMC’s shipping cost model just doesn’t support that. The proposal: change the fee structure so that it is more cost effective to continue operating the Buy Now – Ship Later concept and appease the power sellers while trying to minimize any perception that low-end will become extinct.
So how do they propose encouraging larger value cards while still making it viable to sell low end product? First, they are changing the 20% cash out fee with a 10% cash out fee. OK, that sounds good for sellers. Then there is going to be a 5% transaction fee (i.e. commission to COMC) on every sale transaction. There has never been a transaction fee on sales up to this point, so in essence, you sell a card for $100, you will receive $95 of COMC credit. They are also changing the 20% seller partner commissions to something closer to 10% plus the transaction fee and adding an “Enhanced Security Fee” for items stored over $50 . It seems that the Bulk Editor feature that was announced to be added is the only change not involving fees.
All of this goes into effect January 1, 2019, which means anyone selling on COMC will immediately be able to take advantage of the 10% cash out on their sales from that point forward or any credit added to their account. However, if you maintain a balance from prior to January 1, you will need to either spend all your balance on cards or other services, convert your old COMC credits to the new 5% transaction fee credits, or just let it sit there for a year when it, too, will become eligible for the 10% cash out. Your “old” credit will be used up first and any “new” credit purchased after the 1st will be used after the “old” is gone.
For a flipper like me, that focuses on lower end vintage hockey, this sounds troublesome, as I have used this service up to this point to only convert my sales credits into additional inventory. With the new plan, my sales will net me 5% less in purchase power going forward. The only advantage would be to utilize the cash out function and gain an additional 10% on the credits, however that has never been my experience with COMC and is not part of my plan either now or in the future. My pricing on products would have to increase 5% on my asking prices to make up for the difference in values, which doesn’t seem like a lot when considering mostly sub-$5 cards, but would put me at a disadvantage in advertising prices to the power sellers and others that frequently cash out to reap the benefits of the additional savings or have their wares cross marketed on Ebay or Amazon (which seem to be reserved for cards with higher price ranges and larger view counts).
The only solace in this may be that they too, will need to raise prices to account for the 5% fee and 10% cash out (plus if they account for the commission fee for the Ebay/Amazon sales). Since my margin on cards is very slim as it is, I don’t see a cost-effective way to continue as a casual low-end vintage flipper without spending a lot of time making daily or at the least, weekly pricing overhauls to my inventory. For a casual flipper, that isn’t, ahem, in the cards.
My sentiment seems to be shared by many other collectors. Shortly after this announcement, the blog post’s comments section exploded with other concerned users. One of the reasons that brought me to COMC, customer service, has always been handled pretty well in my experience. COMC spokespeople (namely Tim Getsch, himself) have been fielding questions, thoughts, comments, and concerns since the article was published.
My question to readers now is, what do you think? Do you use COMC, and if you do, how will this affect you as a buyer? Seller? If you haven’t read the blog post on COMC, be sure to check out the link above or click here. Don’t forget to take a look at the comments on there and leave one if you are so inclined. There is also a YouTube video of Tim Getsch explaining the changes. ■
Tim Parish is a writer-at-large for Puck Junk. Follow him on Twitter @therealdfg.