Buy low, sell low (or: That $2.50 sweet spot) (1 Viewer)

Taghkanic

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This is going to go long. If you’re the type to just post TL;DR, feel free to click on to another post. For the rest of you, please indulge me...

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INTRO: In the past few days I’ve sold just under 3,000 chips, all Paulsons, some THCs, some RHCs, in fifteen lots, to nine buyers, mostly publicly, a few privately, for an average of exactly $2.50/per chip.

A few racks of these chips were dead mint and relatively hard to find. Others were well-worn. The vast majority were just good, solid racks, in excellent condition. Quantities were mostly 100-400, with a few small batches of barrels or less.

A couple of people asked: “Why are you selling these so cheap?” Such curiosity was understandable, given the seeming frenzy of chip buying going on, though one questioner seemed almost suspicious about it...

Given some recent debates about the chip market being maxed out (or not), arguments about flipping, concerns about the effect of whale collectors, etc.—and given that after roughly five years on this board, I’ve decided to liquidate the chips I’m not actually using—I thought it might be worth taking that question and this moment to think out loud a little about my buying and selling experience.

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BACKGROUND: During the pandemic, I like many others accumulated perhaps more chips than I actually needed. Much of that was out of boredom or idleness: I started envisioning all kinds of mixed sets and custom sets and extra sets that I did not need. My collection ballooned to around 10-12,000 chips.

During that time, I also got a lot more serious about assembling enough spotted THC chips for murder, to create a custom set I wanted to design. Finding enough of these in excellent condition to make a large, coherent cash set proved challenging. As a result, I wound up with a lot of random racks that I either decided didn’t fit, or which I just couldn’t find enough of to build a playable set.

In the past month, I finalized my label designs, set those to @Gear, and lined up @JoshKifer and @Nanook for milling and inlay replacement.

And then I started going through my cabinets and cases and racks littering the house, and decided it was time to let go of the ones I didn't need. When that process is complete, I will still have two tourney sets and two cash sets, plus one large set of milled ASMs/CPCs I’m keeping in hopes of making one last custom set for a vacation home.

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PRICING: In looking at these 3,000 chips I wanted to let go, I made a decision to just try to get rid of them fast. I wanted them gone within a week. I didn't want to be bumping threads for weeks or months, and answering a zillion DMs. That meant pricing everything to move.

And move they did.

All but one rack of solids was snapped up within either minutes, or in a matter of hours, or at the worst 24 hours. The last unsold rack is also likely to go, pending some further pics.

So why did they go so fast? In part because there seems to be more demand than ever. But I think mostly because of the prices. I definitely left money on the table—but deliberately so.

In truth, I did just fine. About 1/3rd of these chips I got at the lowest price possible, via @TheChipRoom. My base cost on those meant that even when I priced them below market, I was turning a (modest) profit. Another 1/3rd of these I sold at about what I paid for them. And the last 1/3rd I sold far, far below market.

All told, I netted about what I had in all of these chips *as a group*. But yes, with patience I no doubt could have brought in a lot more... The average in the end might have been more like $4-$4.50 per chip.

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THOUGHTS: A couple of longtime chippers influenced my thinking a lot on this.

One was someone I’d never met, who saw a wanted ad I’d posted, and reached out privately. He had the chips I needed to complete my set. When I proposed a price, he countered... with a lower price. Wow. That never happens. My sense was that he had been in the game so long, and was so astonished or even offended by some prices being asked, that he was glad to quietly make a sweet deal for me. And his “lower” price was probably still astronomical to those who began with this hobby 10-20 years ago.

Another was a good friend who has been collecting much longer than me, who always likes to point out that when assembling a set, it’s not so much what you pay in a single transaction, but what your overall cost/chip is for the project. If you want 400 chips of a certain type to use as your fives, and pay only $2/each for the first 300, it’s not so bad if you have to pay $4/each for the last 100... Because your total price works out to $2.50 each.

The ~3,000 chips I just sold are all in their various ways really great chips, and I hope and expect that all the buyers will be pleased when today’s shipments arrive. There’s nothing so exciting as a chip shipment (at least, that you can receive in the mail). But to me those ~3,000, all of which I had been delighted to receive, had now become dead weight. They represented the sunk cost of assembling all my other five sets, especially the most recent ones.

As such, I was glad to be able to get back the cost of my various changes of plans, tangents, and outright mistakes. I didn’t need to make a big profit off these remainders; I just needed to get in the ballpark of my base cost. If I made a small profit, or came out even, or lost a little, that was a small incremental change in the total cost of the five sets I was keeping—which needed those ~3,000 missteps to wind up in the right place.

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CONCLUSION: I don’t expect others to price things close to their original cost. If you want to turn a big profit on chips you’ve bought (including but not limited to those bought from me), that’s your right.

Personally I don’t rely on chipping for income. But for anyone who does, go do what you gotta do.

That said, I feel like hitting an average of $2.50/ea. on these sales represents a certain sweet spot at this particular moment. It’s a number which makes buyers feel like they got a great deal, and one which made me comfortable with offering those deals.

And yes, I admit, I do take some added pride/happiness that I wasn’t contributing to some of the more eye-popping inflation in this hobby.

So for those who don’t need chipping to pay their grocery bill or rent, I hope you may read this and also consider the idea of buying low and selling low... whether your sweet spot is $0.25, $2.50, or $25/each.
 
P.S.: Today I also put two additional lots, both incomplete or mixed sample sets, up for auction, simply because I could not figure out how to price them. The market again seems to be wildly above what I would have expected to sell them for.
 
When I proposed a price, he countered... with a lower price. Wow. That never happens.

Odd coincidence, completely unrelated; today at 12:57 pm I was offered $300 for a rack of chips. I countered with $270, because it was what I paid and it just seems right.

Must've been something in the air today. Hope it sticks around!
 
Congrats on reaching that chipping nirvana... I look forward in participating in your future sales. On behalf of many new chippers out there, thank you!
 

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