The topic of price flooring comes up quite a bit in retailer groups and the TCGplayer Pro group (from which the thumbnail is taken). I thought about expanding this into a deeper article on singles pricing generally, as a paid-exclusive. I will probably go ahead and do that in the near future. But for the limited scope of this question, I figured this would make a great free-to-read Monday Meditation so that new readers and free subscribers could enjoy an example of the kind of useful guidance that we go farther into depth in the paid-exclusive articles.
As soon as any store starts selling TCG singles on the online marketplaces, mostly Magic: the Gathering, it quickly becomes apparent that there are cards that usually fail to sell at any price. Since most marketplaces are open to stores, garage/backpack dealers, and players alike, there are many who have no labor time value and who are happy to make sales for one penny. This creates a race-to-the-bottom dynamic across all cards where there is always someone willing to undercut the previous low, provided they have the goods.
Consequential dynamics follow from this. Players aren’t running businesses so they are often unaware of the need to grade cards with integrity, or to ship cards quickly. Thus, they end up having to offer lower prices than other sellers. Buyers tend to weigh the likelihood of a condition or shipping hassle against the seller’s apparent history, the platform’s buyer protections, and their own tolerance for wasted time and effort. Those buyers sometimes buy from the lowest listing, and other times seek out a copy of that card from a more reputable seller, whether that means a business or just a seller they have had good results from in the past. And then other buyers follow suit, iterated thousands upon thousands of times.
Based on that seller population split of amateur vs professional, there is a “liquidation price” and a somewhat higher “sustained price” for many cards. This often pattern tracks with TCG low versus TCG mid or Direct low, though of course there are other platforms like eBay that have their own aspects.
It’s easy to be a store and list all the singles you have and think, “Well, I want these to sell, and the match price is a penny (or ten cents, or fifty, etc) so I had better set Massprice or the Crystal Commerce batch script to match the existing low, and just find a way to, I guess, make it up in volume?” And this is a logical line of thought when you’re mistakenly adopting the prior that you need to sell all the cards you get, turning through them like you might turn through sealed inventory.
That is not the case, and as soon as you can reverse your lens on this and work toward a better intended outcome, the easier it is to see the value in a price floor set somewhat higher.
Usually the come-to-Jesus moment happens early on when you take an order for 73 cards at pennies each and realize you’re going to lose money on shipping alone, not even counting the order itself or the labor to compile and send it, et cetera. There are still some workarounds that will let you really push the, uh, envelope of what you can ship PWE (plain white envelope) with stamped postage, and I am not going to delve into those here except to say that you certainly want to use the tools at your disposal when you have a problematic order in the queue needing to be dispatched. But mostly at that moment sellers turn to social media and ask other retailers, “What am I supposed to do? Raise shipping? But most sellers seem to have free or cheap shipping! Do I set a price floor?”
The answer is both. You raise shipping, and you set a price floor.
Now I am going to preface the rest of this article by saying these are statements of opinion based on my experience shipping literally millions of orders worth of cards over the years, from early days on usenet to early eBay to the heady aughts when eBay took turns with Find Magic Cards Dot Com to our own e-commerce webfronts to Amazon and Crystal Commerce and finally to the modern day when most of the action is on TCGplayer but there are competing platforms emerging as well. We did about a quarter of that singles business on the modern iteration of TCGplayer Pro with Direct. Ultimately your pricing and shipping rates are up to you to decide and we are not instructing you on an amount you should charge or require. I’m going to explain what we did, and you can adapt that to your own usage based on your own best judgment.
Realize first that the ultimate goal isn’t to sell the most cards, or to reach the most customers. The ultimate goal is to make the most Net Income. The most money.
To make the most money means that every time you get an order, that order has to be as healthy as possible for you, the seller. This means both in terms of margin and also in terms of keeping your costs low on labor, materials, and postage.
If you could make only a single sale every day for $100 against $4 Ground Advantage tracked shipping, a cost of goods of $18, a bubble mailer bought in bulk that costs you around 8 cents, and a few minutes of labor for perhaps a couple of dollars, and then round up to account for general conditions, that would be great!
Conversely, making 50 sales a day in the $3-$6 range where the profit per sale is perhaps a few dimes, would be absolutely terrible, but might move a thousand cards. This is why I keep emphasizing that card count sold is a frame of mind you need to unlearn, as Yoda would say.
This article won’t get into the dynamics of buying singles; we know that buy ratios go up as the card becomes more valuable, so let’s just recognize that it would be great to have an inventory of nothing but ABUR dual lands, and then accept how difficult and unlikely such an inventory would be to offer. Their circulation is simply too limited compared to even the rest of the Reserved-List-era stuff, let alone the rest of the singles population out there. And that’s just talking about Magic. I’m sure every Pokemon seller would like to offer little else but base Charizards and various chase hits, but in practice, you end up with other cards too in the course of buying entire collections to have maximum access to the good stuff. The reason I bring this up is to understand that most cards essentially cost us nothing, are not important, are not in demand, and are acquired as a side-effect of our everyday collection purchases and buylisting that gets us the more-demanded inventory. And that means if those lesser cards don’t sell… it’s not really a problem, is it? They can sit. You’re allowed to let them sit.
I set a price floor of 99 cents. I sometimes lowered it to 89 cents on damaged non-value stuff and what have you, but by and large: 99 cents. And it may surprise you to know this, but I sold a fair amount of 99 cent cards that the buyer could have gotten for a nickel from another seller. Often I got these sales either through Direct, or because the buyer was buying multiple cards I had in stock and that’s what the cart optimizer ended up doing.
[Side note: If you haven’t figured it out by now, the cart optimizer algorithmically rewards sellers who have the broadest inventory. The more cards you can enable a sale for, the more likely the cart optimizer will steer a decklist purchase to you, including both non-Direct and Direct purchases. So if you’re going to sell singles online at all, commit hard and buy voraciously.]
I set a shipping price of $4.99, the maximum available. I should caveat that by saying it only makes sense to do this if you are in the TCG Direct program. If you are not, you probably want to use the setting that has shipping at something like a dollar (they keep moving this as postage rates increase) but once the order hits a threshold like $5, shipping is free. Coupled with the 99-cent price floor, you never lose money on shipping in this fashion. (No way five cards are going to exceed the capacity of an ordering PWE.)
“But wow don’t you get like zero orders at $4.99 shipping?” We got fewer orders than under the cheap shipping, but each order was much larger, and thus much healthier. Typically orders of a decent-sized list of cards. And, orders via Direct are unchanged because they don’t pay the shipping add-on anyway. Since Direct saves us a lot of labor, we want this outcome.
By the time I had that price floor and that shipping rate set up that way, I was able to reduce staff down to one employee to handle all outgoing singles. And when that employee was unavailable, it wasn’t difficult to step in and cover the day’s shipping fulfillment myself.
That may seem like an extreme example to many of you. Fair to say. Some other retailers I know have fine-tuned things a bit based on their own capacity, inventory, and processes, such Tales of Adventure, who floor at 69 cents (nice), and Boss Monster Games, who floor at 75 cents. This is all public information in any case; you can “shop by seller” on TCGplayer and most other platforms and you’ll pretty quickly figure out how they have things set up.
Whatever price floor and shipping rate you set, make sure it serves your needs before worrying about raw order volume. When you’ve got the goods at critical mass, the orders will come. When they do, make sure you gain Net Income.
I dig it. At the core of this is a really important lesson: business owners need to pay attention to the metrics that matter.
Getting a sale is nice, having a high revenue number is cool, but net income is where it's at. You need to make sure you're optimizing for the right thing, or you may find yourself sweating over trying to send out thousands of unprofitable orders looking at your accounts wondering why you're not getting ahead each month.