Over the course of the past few years, I've repeatedly seen the assertion that StarCityGames sets secondary market prices for Magic Cards.
This facial assertion is often countered directly with the following:
After all, if party A sells cards with party B, what business does SCG have in dictating party A's price? None at all. Party A can set whatever price he or she wants. Whether SCG sells tarmogoyfs at $120, party A still has perfect freedom to charge either $60 for his goyf, or $150. Entirely party A's prerogative.
Another counter argument is that people say "Look if SCG charged $200 for a goyf, nobody would buy from them, they would just goto other vendors" Therefore SCG can't set secondary market prices, because the market will adjust with customers looking elsewhere!
Both of those are good logical counters that refute the facial accusation that SCG sets secondary market prices in magic.
But for some reason, this accusation persists I think because the people who lob this accusation want to express a concept they're not fully clear on.
In other words, in their minds: SCG does SOMETHING that SOMEHOW controls the market prices in a manner that seems greater than mere market participant.
In my opinion, the correct label in economic theory for what those people are trying to express is "Price Leadership" Starcitygames is likely a price leader in the Magic Market.
Price Leadership When a firm that is the leader in its sector determines the price of goods or services. Price leadership can leave the leader's rivals with little choice but to follow its lead and match these prices if they are to hold onto their market share. Alternatively, competitors may also choose to lower their prices in the hope of gaining market share as discounters.
Price leadership can be positive when the leader sets prices higher, since its competitors would be justified in ratcheting their prices higher as well, without the threat of losing market share. In fact, higher prices may improve profitability for all firms.
*copied from Investopedia.
I first learned this concept in a class I took on Antitrust law. Price leadership is one of the behaviors that tends to be exhibited by a dominant firm indicating a high concentration of market power in any particular market.
Basically, since the DOJ looks at market concentration in determining whether a firm is a monopoly, they look at a myriad of factors in making that determination, price leadership being one of the many phenomenon they have observed in other cases.
Wow, someone opened a business book and decides to post this condiscendiing post.
Everyone knows what people mean when they say SCG's sets prices. They increases the price and others followed suit, no one ever said everyone matches them. Guess you want to nitpick on a forum where people expect to be a bit more casual.
Also, SGC's does often set floor prices on cards with their, sometimes, very aggressive doubling the price of cards and raising their buy price to the old sell price.
Also, SCG's influence is greater than a normal market leader as they are one of the defacto price guides. This is the main reason people say they set prices, because half the MTG community will use their website to find the value of a card. So while maybe not a textbook definition it fits what is happening due to the high % of the player base using their site.
Wow, someone opened a business book and decides to post this condiscendiing post.
Everyone knows what people mean when they say SCG's sets prices. They increases the price and others followed suit, no one ever said everyone matches them. Guess you want to nitpick on a forum where people expect to be a bit more casual.
Also, SGC's does often set floor prices on cards with their, sometimes, very aggressive doubling the price of cards and raising their buy price to the old sell price.
Also, SCG's influence is greater than a normal market leader as they are one of the defacto price guides. This is the main reason people say they set prices, because half the MTG community will use their website to find the value of a card. So while maybe not a textbook definition it fits what is happening due to the high % of the player base using their site.
It looks like you took the tone of my post to be condescending and offensive and you wanted to respond to my post like it was a condescending post.
Yes, that is what people are saying, but the first line of the definition is how it is usually worded When a firm that is the leader in its sector determines the price of goods or services.
There are also smaller shops that don't specialize in singles that just sell based on SCG, so SCG is setting the price of some smaller stores.
I really don't understand what you wanted to gain by posting this though, it would have had a greater affect if it was in response to people saying that the prices are set by SCG.
It looks like you took the tone of my post to be condescending and offensive and you wanted to respond to my post like it was a condescending post.
Can I ask what led you to that conclusion?
The first two sentences. Saying you are more knowledgeable then the posters who use the term set. Also calling the concept that you attribute to these posters ridiculous. The part that makes it really condescending is you know what people mean and you try to belittle them by going by a textbook definition and not what is obviously the meaning.
I would also like to add, they could be 100% right as this is how language evolves. Everyone uses a word a certain way, which may no be 100% correct, but eventually that becomes part of the meaning.
The first two sentences. Saying you are more knowledgeable then the posters who use the term set. Also calling the concept that you attribute to these posters ridiculous.
I would also like to add, they could be 100% right as this is how language evolves. Everyone uses a word a certain way, which may no be 100% correct, but eventually that becomes part of the meaning.
Ah ok, I've changed the language of my post to a more neutral tone. I don't want the form of my wording to be a distraction towards the substance of my post.
In my experience as a Canadian the stores all around me use SCG pricing as a floor, if a card is undervalued on SCG I can stroll down to the store and pay SCG prices on almost anything. The part that sucks is SCG factors hype into their prices pretty heavily, I can't say whether it's a demand or a getting ahead of the demand (hype) thing but they definitely do it and it causes the prices of cards locally to follow the same trend.
It also seems like SCG will suppress the value of certain very powerful cards when the card isn't seeing a ton of demand in order to accumulate a bunch of them for cheap via buylist and then once the card sees some kind of success the price will shoot back up overnight. There was a significantly long period of time where they were selling Hellrider for 20$ and Jace, AoT for 9-10 and AoS for 5-6, I was trading all my hellriders into the LGS for jaces and angels thanks to starcitygames.
The way I see it the only people who really get screwed are the people who buy cards when they are hyped up from the LGS/Starcity when they can often be had for quite a bit less on forums/ebay/etc. I mean if suddenly SCG pricing started looking like eBay pricing wouldn't that drive a lot of people out of business? The advantage I see for a lot of random sellers is they can point at their pricing and then point at SCG's and say "look how much you're saving!", if the pricing was closer people would just go the safe route and buy from the LGS/SCG.
I think you are confused, most people do not think how you initially argued, that is just an unnecessary straw-man.
Its more along the second lines, scg is used as a base for people, an easy guide to follow. Enough lgs see scg as the de-facto source of retail that largely what they price something drives the game store prices.
Larger stores lead on price by raising their buy list prices to a point that it becomes attractive for average speculators and collectors to go out and buy up supply in order to quickly resell to these larger firms for a quick buck. There's a reason that the financially focused internet Magic community and sites tend to focus on buylist prices (example; that the scroll at the top of Quietspeculation.com lists buylists and not 'book' prices for cards, because that's where the quick money can be found). As this usually occurs with cards that are already becoming in short supply on the open market, the remaining outstanding stock is bought up and lack of supply dictates that the new (higher) sell price set by these larger firms becomes the new defacto baseline.
This is how a market works, this is how those larger firms remain large and this is how new baseline prices are set on cards. If the supply still outstrips demand, or demand falls off a cliff (which contrary to a lot of 'common knowledge' does happen), the buylist and sell price will retreat as larger firms sit on excess inventory that becomes less liquid. This is how those larger firms have to operate in order to stay ahead of the day traders (ie; the average speculator).
if SCG controlled the market, then I wouldn't be able to buy voice of resurgence off ebay for $35 when they charge $60 for them, yet I clearly can. I sayTCGplayer has a far larger influence than SCG does with the prices nowadays, since the voice of 100 companies selling for cheaper than SCG will be heard over them.
Whenever SCG raises it sell price on some card, it also raises its buy price, cleaning out all its competitors. That's why other stores have no choice but to peg their sell prices to SCG's.
For example, let's say every store (SCG included) sells Bob at $50. SCG suddenly raises its prices for Bob, selling them at $80 each and buying them at $50 each. What happens next is every store with $50 Bobs will be swept clean by SCG. You'll never see Bob for sale at $50 ever again.
This only works if the supply of the card that SCG is after is limited. They can't corner Standard rares because there's a ton of them in circulation, so they'll never be able to buy all of them up. But look at products like MM boxes/singles, sealed FTV sets (Yes, SCG actually buys sealed sets), Reserved List cards...for those, SCG has the final say on how much those are worth.
Over the course of the past few years, I've repeatedly seen the assertion ...........................price leadership being one of the many phenomenon they have observed in other cases.
Okay, quite possibly.... and?
Private Mod Note
():
Rollback Post to RevisionRollBack
---
You colonization of language is not appreciated.
There is a lot of ignorance when it comes to what people believe set what price and when. Some think eBay, some think SCG.
Turns out, the consumer is who sets the price. They set the price by buying the cards. If they didn't buy the cards, cards would start dropping in price until the real market value was found.
Consumers do not set prices on anything, its absurd that people keep repeating this fallacy. If people do not but a $20,000 4K TV, they do not drop the price to 500$, they just stop making the TV's.
Less people are after Black Lotus cards since they aren't legal in anything except an already dead format, and yet the price has never fallen, even though the cards aren't selling to anyone. My local store has a Bazaar in its case for 1 year now, the price has not dropped. Its not even played in anything. Consumers do control prices.
Consumers do not set prices on anything, its absurd that people keep repeating this fallacy. If people do not but a $20,000 4K TV, they do not drop the price to 500$, they just stop making the TV's.
Less people are after Black Lotus cards since they aren't legal in anything except an already dead format, and yet the price has never fallen, even though the cards aren't selling to anyone. My local store has a Bazaar in its case for 1 year now, the price has not dropped. Its not even played in anything. Consumers do control prices.
Its also absurd that people keep thinking MTG singles market is anything resembling any other market
EDIT: You try to make 3 points in your post, each one poorly reflects your objective of the post you made:
1) Turns out $20k TVs do get a reduction in price after a sort time. Those are called "sales." They also do not go back up to $20k after the price reduction, unlike magic singles that do raise in price over time.
2) A Black Lotus is A) not in a dead format since lots of people are still playing it and B) its a collectors item as well which is why it keeps going up. There is a finite number of Black Lotus, unlike the $20k TVs where if they sell them, they will make more.
3) That Bazaar is only sitting there in your local area, where the next town over could potential snap it up.
Its also absurd that people keep thinking MTG singles market is anything resembling any other market
EDIT: You try to make 3 points in your post, each one poorly reflects your objective of the post you made:
1) Turns out $20k TVs do get a reduction in price after a sort time. Those are called "sales." They also do not go back up to $20k after the price reduction, unlike magic singles that do raise in price over time.
2) A Black Lotus is A) not in a dead format since lots of people are still playing it and B) its a collectors item as well which is why it keeps going up. There is a finite number of Black Lotus, unlike the $20k TVs where if they sell them, they will make more.
3) That Bazaar is only sitting there in your local area, where the next town over could potential snap it up.
I don't think you really grasped the points that were being made with the examples, which might be on me. The TV will only fall so much within a realistic time frame, regardless of sales.
Black Lotus as much as you may think Vintage is a thing, surely is not. Even worse its restricted, so its not even in demand in the format it does exist in. In fact most Black Lotus cards sold are in graded cases, so while that reinforces "collectors" it surely shows its not for vintage players. Also they are selling for considerably under their SCG and TCG prices, talking 2/3rds.
As for the Bazaar, sure it could sell somewhere else for 10x the price instantly ...
Be careful mate...I've wrote this down in 6-31 different ways/views/angles...each leading to clarity as the post you just made...soon the dogs will come out to defend SCG's process (I used the correct term manipulation of the market as THEY SET THE TRENDS, but the dogs will give you another perspective I'm sure soon enough).
But I concur with this, the only way its beneficial to anyone person in general...is if you're the mage who has it all...and its for sale instantly at $29.99 (Chords, really).
Sometimes it pays to walk the straight line (or plank) and try to ignore the facts and stay quite, but in this case they toss it right in front of you...the only question "they" truly ask in the end is...will your payment be Paypal-Credit-or Debit (and someone is paying the price).
Be careful mate...I've wrote this down in 6-31 different ways/views/angles...each leading to clarity as the post you just made...soon the dogs will come out to defend SCG's process (I used the correct term manipulation of the market as THEY SET THE TRENDS, but the dogs will give you another perspective I'm sure soon enough).
But I concur with this, the only way its beneficial to anyone person in general...is if you're the mage who has it all...and its for sale instantly at $29.99 (Chords, really).
Sometimes it pays to walk the straight line (or plank) and try to ignore the facts and stay quite, but in this case they toss it right in front of you...the only question "they" truly ask in the end is...will your payment be Paypal-Credit-or Debit (and someone is paying the price).
S.M.
Yea, the "dogs" bite, in this case being a mod. "accusations without proof" is now considered trolling, so is breathing to hard.
But i digress.
IMO, scg manipulates the market and it generates a LARGLY negative effect on the consumer. IMO IMO IMO.
And yes, given the trends over the last few years, IMO scg does manipulate the market, i even questioned mr ben bleiwess himself over a slogan they had on thier buylist, to which it was along the lines of:
"We agressivly and consistanly buy out stores and collections" yadda yadda.
In which, he said he could see how people could misinterpret that message... right.
I want to start off by saying that the mods have been keeping a close eye on this thread as it has evolved. This is a contentious issue and discussions have been very heated in the past, but at the same time, it is a topic worth discussing. We are going to keep the thread open for the time being, but accusations without proof and flaming, whether directed at Star City, its employees, or anyone else will be infracted. Please remain civil, keep discussion on the topic of the practice of buying / selling by stores without resorting to name calling or other flames
Ultimately, it comes down to what consumers are willing to pay for the cards, what stores are willing to pay to acquire them, and who is willing to blink first. I could go out and buy 1,000 copies of, say, Chord of Calling, tomorrow for $35, and I could set up on here and say that I'll be selling them for $45 on Monday.
At the same time, there's two inherent risks. First, there's the chance that despite my best efforts, a lot of Chords that weren't previously in circulation will now be as such. Cards have a funny way of crawling out of attics, EDH decks, and kitchen tables when prices get sufficiently high. And second, people might decide that no, they'd rather not spend that kind of money, and they'll either find substitutes for Chord of Calling, or perhaps they'll decide that Kiki-Pod isn't the deck they want to play after all. They might decide that Teachings.dec is more up their alley, and decide to leave the market for Chord of Calling specifically.
If either of those happen, I as the speculator have two options. First, I can double down on my investment and try to keep buying up the stock. But that has a lot of risks as well - I have to pay my bills, including the debt I likely accumulated, in cash. Sadly, I can't decide to pay my employees in Chord of Callings - they too need cash to pay their bills. Secondly, I decide I want to liquidate, in which case I have to lower the price to what other people are willing to pay. Ultimately, if there aren't people willing to pay $45 for Chord of Callings, they're not going to sell, and I'm trapped in an illiquid investment.
If people do, on the other hand, believe that $45 is fair for Chord of Calling, then I stand to make a sizable profit, and the true underlying price of Chord will increase to represent this. But the fact that I'm selling them for $45 doesn't magically make them worth that much, nor does it mean that I will find buyers at that price.
Private Mod Note
():
Rollback Post to RevisionRollBack
Former Level 2 Judge (Retired / Renounced)
Went to a new shop from a friend's recommendation, DQ'ed for willful violation of CR 100.6b.
I want to start off by saying that the mods have been keeping a close eye on this thread as it has evolved. This is a contentious issue and discussions have been very heated in the past, but at the same time, it is a topic worth discussing. We are going to keep the thread open for the time being, but accusations without proof and flaming, whether directed at Star City, its employees, or anyone else will be infracted. Please remain civil, keep discussion on the topic of the practice of buying / selling by stores without resorting to name calling or other flames
Ultimately, it comes down to what consumers are willing to pay for the cards, what stores are willing to pay to acquire them, and who is willing to blink first. I could go out and buy 1,000 copies of, say, Chord of Calling, tomorrow for $35, and I could set up on here and say that I'll be selling them for $45 on Monday.
At the same time, there's two inherent risks. First, there's the chance that despite my best efforts, a lot of Chords that weren't previously in circulation will now be as such. Cards have a funny way of crawling out of attics, EDH decks, and kitchen tables when prices get sufficiently high. And second, people might decide that no, they'd rather not spend that kind of money, and they'll either find substitutes for Chord of Calling, or perhaps they'll decide that Kiki-Pod isn't the deck they want to play after all. They might decide that Teachings.dec is more up their alley, and decide to leave the market for Chord of Calling specifically.
If either of those happen, I as the speculator have two options. First, I can double down on my investment and try to keep buying up the stock. But that has a lot of risks as well - I have to pay my bills, including the debt I likely accumulated, in cash. Sadly, I can't decide to pay my employees in Chord of Callings - they too need cash to pay their bills. Secondly, I decide I want to liquidate, in which case I have to lower the price to what other people are willing to pay. Ultimately, if there aren't people willing to pay $45 for Chord of Callings, they're not going to sell, and I'm trapped in an illiquid investment.
If people do, on the other hand, believe that $45 is fair for Chord of Calling, then I stand to make a sizable profit, and the true underlying price of Chord will increase to represent this. But the fact that I'm selling them for $45 doesn't magically make them worth that much, nor does it mean that I will find buyers at that price.
This is very true, and what are some ways that people can evaluate if a card is worth that price? Its not just what they are willing to pay, but if others are willing to pay it as well. This because a dangerous game when you control the perception of the sales through your own stock.
If you were in your above situation, and could push the TCG stock supply low, and give the perception that they were selling by "listing" your stock as low, even though you may be sitting on tons you bought, you would be effectively creating the image that the card is in fact worth that price.
Would people choose a cheaper deck? I think that is something we have seen is not true. People will pay largely whatever it costs to build the deck they want to play, if they feel that deck will win. is the extra 20$ per copy of Cord going to stop someone from paying it? Usually not, and that is the issue, people who play competitively are used to paying hundreds for their decks.
Edit: Just want to add that while its nice to see this topic staying open, and while I understand the issue of Ben posting on here, the idea that these "perceived" issues with SCG and pricing are often shot down because people do not have access to their accounting records and a signed confession is kind of silly. There will never be proof, we as customers of MtG do not have subpoena power or the ability to open investigations, so asking for proof is really just a waste of everyone's time, and a waste of moderators time to constantly penalize everyone who sees what they believe is obvious but can not actually provide proof of.
It looks like people are asking me what's the point of what I wrote.
But look at some of the anti-SCG sentiment this thread has illicited. Already people are accusing SCG of manipulating prices, about controlling the market.
But I'm saying that SCG merely exhibits classical price leadership behavior by virtue of it's position in the market.
I'm saying in any market that tend to be concentrated, the dominant firm (D) tends to exhibit price leadership because:
a) when D raise prices, other market participatnts feel like they can raise their prices to follow because they can increase profitability without losing market share.
b) when D lowers prices, other market participants have to lower prices.
Ex. Why buy from the guy on ebay when SCG is charging the same thing? The latter won't rip you off.
I think you are confused, most people do not think how you initially argued, that is just an unnecessary straw-man.
Its more along the second lines, scg is used as a base for people, an easy guide to follow. Enough lgs see scg as the de-facto source of retail that largely what they price something drives the game store prices.
Sounds like a ripple on a standing concept.
In barometric firm price leadership, the most reliable firm emerges as the best barometer of market conditions, or the firm could be the one with the lowest costs of production, leading other firms to follow suit. Although this firm might not be dominating the industry, its prices are believed to reflect market conditions which are the most satisfactory, as the firm would most likely be a good forecaster of economic changes.
Ill fully admit from the start that I am often someone who will defend SCG (or often just about anyone, that I feel doesn't deserve the negative commentary they are getting). However, I like to think I'm fairly open minded as well, so here are my thoughts:
SCG, as many other online stores have done over the years, had to build their business from the ground up. Each business starts out with some amount of initial money to invest and then through hard work and building a reputation as a solid business, are able to turn around their profits to help grow the business.
10 years ago, it was primarily ebay and brick and mortar stores, with only a smattering of online stores to note. Over the last 10 years, these numbers have grown astronomically, due to the ability to profitably run a gaming business (whether focused on mtg or not) if the business is run correctly. One such success story among them is SCG. They recognized that through having superior levels of inventory, superior customer service, and providing something more to the magic the gathering industry, that they could take their business and the game of magic in its own way, to the next level.
As much as ebay will always be the cornerstone market for magic the gathering singles especially (now also helped by tcgplayer as another large marketplace for singles, especially now that its open for the public to sell on as well). Online stores also have their own solid part of the market that they have managed to carve out. Of those online stores, SCG is the largest, most popular, and tends to have greater market influence than the rest.
This market influence comes in part with being the largest of the online stores, from running their legacy/other open tournaments each weekend around the US, and from them having the highest levels of customer service available and the best stocks of singles available. Their efforts to make their customers happy, are what keeps people coming back, and what allows them to pay a little more in order to keep cards in stock, while also charging a little more than other places in order to keep their margins intact. As a result of this market influence, many brick and mortar stores, and many individuals will often use SCG as a de-facto Scry price guide when dealing with buying/selling/trading of cards.
There have been many instances over the years of people going after SCG, believing that they are abusing their position in the market to manipulate prices. I personally, given what hard evidence I have available to me on the issue (and believing in innocent until proven guilty), believe that most of the moves SCG has made over the years through mirrored buy/sell price adjustments, are often due to very real higher demand from their view points, or simply their own belief that a card may very well be undervalued at the time.
I'm reminded of the situation with the zendikar fetchlands that occurred about a year ago was it? Demand for them had been on the rise, even I, at my brick and mortar store, with no online sales of those cards to note, had noticed a sizeable uptick in demand for them. Had I not had such a large stock of them myself from when people had sold off their rotating standard stock from zendikar block, I would have likely run out entirely before SCG took the actions they did. What SCG did in response to this increase in demand and their dwindling stock at the old prices, was to raise their buy price to $20 for Scalding Tarn and Misty Rainforest. And raise their sell price to around $30 I believe it was at the time. They then proceeded to buy out much of the NM stock available of the cards that fell below that buy price. Regular market demand, and many panicked buyers later, and more supply got bought out (not by SCG though) that helped raise the price to $25 or so, even on ebay.
For SCG, and many online stores (and even brick and mortar store sellers like myself at the time), running out of stock was simply not an option. It can be easy enough to leave the price well enough alone for a while, when one has plenty of stock available, but eventually, when stock gets low, one has to look ahead and decide what steps may need to be taken in order to keep enough stock flowing in, in order to avoid running out of the card. This often means raising the buy price to entice more people to sell to you, while raising the sell price in order to keep your margins intact (which are very important to being able to keep the doors open, as those profits help pay all of the overhead that a business has to cover beyond any product costs.)
There have been many instances over the last year or two of cards being bought out online. Some amount of this can likely be attributed to SCG, but a large amount of it often has nothing to do with them, but rather some of the many speculators out on the market that are looking to buy out the supply in hopes of artificially propping up the price so they can make a quick or sometimes more longer-term profit on their endeavors.
While I myself, don't make it a habit of speculating much in general, I do occasionally speculate some, most often on a smaller scale, sometimes on a larger one if I believe a card really is undervalued. To those suggesting that SCG just pulls inventory to show that they have sold out so they can then relist later at a higher price. I'm sure this may be true to some extent. I know many online stores, that after spotting a card starting to sell out of places, yanked their inventory before someone could buy them out as well, in hopes of waiting for the buying spree to end, so they can see where the price will settle at afterward. There are also plenty of instances when someone will buy out SCG's available stock of a card, sometimes in conjunction with buying out that product everywhere, or perhaps as part of a smaller buyout.
I personally, have done this in the past. Sometimes its simply part of a need to keep a card in stock at the shop I sell at (and having done $150,000 in sales, and over $250,000 in trading last year alone, just at the shop, not counting online sales) I can often gauge fluctuations in demand via just looking at my own sales trends and looking at why people are buying up the cards. Sometimes its some amount of my own speculation, intuition, otherwise, that genuinely doesn't believe that that $5 card should only be a $5 card. Part of the reason why SCG can often get hit first in many such buyouts, is because, unlike some online stores (who's names I wont get into here) SCG will always deliver what they sell. Whatever I have ordered from them over the years, no matter what it was, I ALWAYS got it, and always received it in the condition I was expecting, and always in a timely and hassle-free manner.
Sometimes its not just one person buying out the market for a card either. Sometimes someone may initiate such a buyout, causing supply to suddenly drop a bit, and price to tick up slightly, which can then trigger the senses of other speculators to come in and buy out the rest, if they believe too that the card is a good target for being bought out at the current price. Sometimes a store like SCG is simply reacting to buyouts from others to get the cards back in stock, or to make sure their stock is large enough to cover a new surge in demand. I know personally, its never fun getting caught with your pants down on a sudden increase. I've gotten nailed there myself, even with as much time as I spent trying to keep up with card pricing and trends, I still miss things. Thusly I'm then forced to go online and pay whatever the market is selling the cards at, at the time, in order to get the cards back in stock as quickly as possible, because my customers expected me to have everything available for them to purchase, when they needed it. Sometimes that means selling out of a card at $2, and then having to go online and pay $4 each for the card, and tentatively listing it at $5 in hopes that people will be able/willing to pay that for the card when they are looking for it. Sometimes that means paying market price of $4, and selling it at $4, and taking the small loss that will come from that simply to make sure they can fully build that deck they are looking to build, without worrying about missing cards.
Inevitably, SCG does have influence over the secondary market prices, as the leading online store of the industry, they get a lot of attention from a lot of people. But control the market? Nah, they don't. They can certainly raise their buy prices and put a floor under the value of a card due in part to having the resources to be able to handle a sudden flood of selling into them of that card. But inevitably though, unless the market is willing to pay that much for the card, it may not work out so well for them in the end. Not all speculation pans out, not even when SCG is doing it. In the end, a site like Ebay is going to be the greatest predictor of actual market value of a card, as it can show, via completed listings information, what people are actually willing to pay for the cards. That's why I personally always tend to go off of ebay valuations for cards, because I can see people actually having paid that amount for the cards recently, and thusly can feel fairly confident that if I price my own cards in that range, that I too will be able to sell my cards reasonably quickly without much hassle.
Whew, that was a long post. For those that actually bother to read my not-so-little wall of text, I hope that some of my insights will prove helpful to the discussion :).
It's odd how on a MtG website, you're not allowed to talk about the biggest offender in the market in terms of price manipulation without being accused of "trolling/flaming".
SCG has articles directly on their website talking about how they bought up markets (Fetchlands, Wastelands), yet this is a taboo topic?
Private Mod Note
():
Rollback Post to RevisionRollBack
To post a comment, please login or register a new account.
This facial assertion is often countered directly with the following:
After all, if party A sells cards with party B, what business does SCG have in dictating party A's price? None at all. Party A can set whatever price he or she wants. Whether SCG sells tarmogoyfs at $120, party A still has perfect freedom to charge either $60 for his goyf, or $150. Entirely party A's prerogative.
Another counter argument is that people say "Look if SCG charged $200 for a goyf, nobody would buy from them, they would just goto other vendors" Therefore SCG can't set secondary market prices, because the market will adjust with customers looking elsewhere!
Both of those are good logical counters that refute the facial accusation that SCG sets secondary market prices in magic.
But for some reason, this accusation persists I think because the people who lob this accusation want to express a concept they're not fully clear on.
In other words, in their minds: SCG does SOMETHING that SOMEHOW controls the market prices in a manner that seems greater than mere market participant.
In my opinion, the correct label in economic theory for what those people are trying to express is "Price Leadership" Starcitygames is likely a price leader in the Magic Market.
Price Leadership
When a firm that is the leader in its sector determines the price of goods or services. Price leadership can leave the leader's rivals with little choice but to follow its lead and match these prices if they are to hold onto their market share. Alternatively, competitors may also choose to lower their prices in the hope of gaining market share as discounters.
Price leadership can be positive when the leader sets prices higher, since its competitors would be justified in ratcheting their prices higher as well, without the threat of losing market share. In fact, higher prices may improve profitability for all firms.
*copied from Investopedia.
I first learned this concept in a class I took on Antitrust law. Price leadership is one of the behaviors that tends to be exhibited by a dominant firm indicating a high concentration of market power in any particular market.
Basically, since the DOJ looks at market concentration in determining whether a firm is a monopoly, they look at a myriad of factors in making that determination, price leadership being one of the many phenomenon they have observed in other cases.
Everyone knows what people mean when they say SCG's sets prices. They increases the price and others followed suit, no one ever said everyone matches them. Guess you want to nitpick on a forum where people expect to be a bit more casual.
Also, SGC's does often set floor prices on cards with their, sometimes, very aggressive doubling the price of cards and raising their buy price to the old sell price.
Also, SCG's influence is greater than a normal market leader as they are one of the defacto price guides. This is the main reason people say they set prices, because half the MTG community will use their website to find the value of a card. So while maybe not a textbook definition it fits what is happening due to the high % of the player base using their site.
It looks like you took the tone of my post to be condescending and offensive and you wanted to respond to my post like it was a condescending post.
Can I ask what led you to that conclusion?
When a firm that is the leader in its sector determines the price of goods or services.
There are also smaller shops that don't specialize in singles that just sell based on SCG, so SCG is setting the price of some smaller stores.
I really don't understand what you wanted to gain by posting this though, it would have had a greater affect if it was in response to people saying that the prices are set by SCG.
The first two sentences. Saying you are more knowledgeable then the posters who use the term set. Also calling the concept that you attribute to these posters ridiculous. The part that makes it really condescending is you know what people mean and you try to belittle them by going by a textbook definition and not what is obviously the meaning.
I would also like to add, they could be 100% right as this is how language evolves. Everyone uses a word a certain way, which may no be 100% correct, but eventually that becomes part of the meaning.
Ah ok, I've changed the language of my post to a more neutral tone. I don't want the form of my wording to be a distraction towards the substance of my post.
It also seems like SCG will suppress the value of certain very powerful cards when the card isn't seeing a ton of demand in order to accumulate a bunch of them for cheap via buylist and then once the card sees some kind of success the price will shoot back up overnight. There was a significantly long period of time where they were selling Hellrider for 20$ and Jace, AoT for 9-10 and AoS for 5-6, I was trading all my hellriders into the LGS for jaces and angels thanks to starcitygames.
The way I see it the only people who really get screwed are the people who buy cards when they are hyped up from the LGS/Starcity when they can often be had for quite a bit less on forums/ebay/etc. I mean if suddenly SCG pricing started looking like eBay pricing wouldn't that drive a lot of people out of business? The advantage I see for a lot of random sellers is they can point at their pricing and then point at SCG's and say "look how much you're saving!", if the pricing was closer people would just go the safe route and buy from the LGS/SCG.
Its more along the second lines, scg is used as a base for people, an easy guide to follow. Enough lgs see scg as the de-facto source of retail that largely what they price something drives the game store prices.
This is how a market works, this is how those larger firms remain large and this is how new baseline prices are set on cards. If the supply still outstrips demand, or demand falls off a cliff (which contrary to a lot of 'common knowledge' does happen), the buylist and sell price will retreat as larger firms sit on excess inventory that becomes less liquid. This is how those larger firms have to operate in order to stay ahead of the day traders (ie; the average speculator).
For example, let's say every store (SCG included) sells Bob at $50. SCG suddenly raises its prices for Bob, selling them at $80 each and buying them at $50 each. What happens next is every store with $50 Bobs will be swept clean by SCG. You'll never see Bob for sale at $50 ever again.
This only works if the supply of the card that SCG is after is limited. They can't corner Standard rares because there's a ton of them in circulation, so they'll never be able to buy all of them up. But look at products like MM boxes/singles, sealed FTV sets (Yes, SCG actually buys sealed sets), Reserved List cards...for those, SCG has the final say on how much those are worth.
| Ad Nauseam
| Infect
Big Johnny.
Okay, quite possibly.... and?
You colonization of language is not appreciated.
Turns out, the consumer is who sets the price. They set the price by buying the cards. If they didn't buy the cards, cards would start dropping in price until the real market value was found.
Less people are after Black Lotus cards since they aren't legal in anything except an already dead format, and yet the price has never fallen, even though the cards aren't selling to anyone. My local store has a Bazaar in its case for 1 year now, the price has not dropped. Its not even played in anything. Consumers do control prices.
EDH Decks:
B Toshiro Umezawa B
W Mikaeus, the Lunarch W
G Azusa, Lost but Seeking G
UB Grimgrin, Corpse-Born BU
BGU The Mimeoplasm UGB
GUW Rubinia Soulsinger WUG
GRB Sek'Kuar, Deathkeeper BRG
Its also absurd that people keep thinking MTG singles market is anything resembling any other market
EDIT: You try to make 3 points in your post, each one poorly reflects your objective of the post you made:
1) Turns out $20k TVs do get a reduction in price after a sort time. Those are called "sales." They also do not go back up to $20k after the price reduction, unlike magic singles that do raise in price over time.
2) A Black Lotus is A) not in a dead format since lots of people are still playing it and B) its a collectors item as well which is why it keeps going up. There is a finite number of Black Lotus, unlike the $20k TVs where if they sell them, they will make more.
3) That Bazaar is only sitting there in your local area, where the next town over could potential snap it up.
I don't think you really grasped the points that were being made with the examples, which might be on me. The TV will only fall so much within a realistic time frame, regardless of sales.
Black Lotus as much as you may think Vintage is a thing, surely is not. Even worse its restricted, so its not even in demand in the format it does exist in. In fact most Black Lotus cards sold are in graded cases, so while that reinforces "collectors" it surely shows its not for vintage players. Also they are selling for considerably under their SCG and TCG prices, talking 2/3rds.
As for the Bazaar, sure it could sell somewhere else for 10x the price instantly ...
EDH Decks:
B Toshiro Umezawa B
W Mikaeus, the Lunarch W
G Azusa, Lost but Seeking G
UB Grimgrin, Corpse-Born BU
BGU The Mimeoplasm UGB
GUW Rubinia Soulsinger WUG
GRB Sek'Kuar, Deathkeeper BRG
Scg pulls all thier Chord of calling lists it as "out of stock"
and ups the price to $30
buys up all the stores online at a profitable price, $20 or less.
All that remains are 25 - 30 dollar versions.
This time next week, scg will be back with full stock and its new amazing price of $29.99.
<Scg is bad for magic, and bad for anyone who gives them money.>
Accusations without proof are trolling, and the bracketed comments are flaming. Troll/Flame Infraction issued - Skies.
Big thanks to Rivenor for the sig!!
But I concur with this, the only way its beneficial to anyone person in general...is if you're the mage who has it all...and its for sale instantly at $29.99 (Chords, really).
Sometimes it pays to walk the straight line (or plank) and try to ignore the facts and stay quite, but in this case they toss it right in front of you...the only question "they" truly ask in the end is...will your payment be Paypal-Credit-or Debit (and someone is paying the price).
S.M.
Yea, the "dogs" bite, in this case being a mod. "accusations without proof" is now considered trolling, so is breathing to hard.
But i digress.
IMO, scg manipulates the market and it generates a LARGLY negative effect on the consumer. IMO IMO IMO.
And yes, given the trends over the last few years, IMO scg does manipulate the market, i even questioned mr ben bleiwess himself over a slogan they had on thier buylist, to which it was along the lines of:
"We agressivly and consistanly buy out stores and collections" yadda yadda.
In which, he said he could see how people could misinterpret that message... right.
edit:
IMO
This is trolling. Infraction issued. -Galspanic
Big thanks to Rivenor for the sig!!
Ultimately, it comes down to what consumers are willing to pay for the cards, what stores are willing to pay to acquire them, and who is willing to blink first. I could go out and buy 1,000 copies of, say, Chord of Calling, tomorrow for $35, and I could set up on here and say that I'll be selling them for $45 on Monday.
At the same time, there's two inherent risks. First, there's the chance that despite my best efforts, a lot of Chords that weren't previously in circulation will now be as such. Cards have a funny way of crawling out of attics, EDH decks, and kitchen tables when prices get sufficiently high. And second, people might decide that no, they'd rather not spend that kind of money, and they'll either find substitutes for Chord of Calling, or perhaps they'll decide that Kiki-Pod isn't the deck they want to play after all. They might decide that Teachings.dec is more up their alley, and decide to leave the market for Chord of Calling specifically.
If either of those happen, I as the speculator have two options. First, I can double down on my investment and try to keep buying up the stock. But that has a lot of risks as well - I have to pay my bills, including the debt I likely accumulated, in cash. Sadly, I can't decide to pay my employees in Chord of Callings - they too need cash to pay their bills. Secondly, I decide I want to liquidate, in which case I have to lower the price to what other people are willing to pay. Ultimately, if there aren't people willing to pay $45 for Chord of Callings, they're not going to sell, and I'm trapped in an illiquid investment.
If people do, on the other hand, believe that $45 is fair for Chord of Calling, then I stand to make a sizable profit, and the true underlying price of Chord will increase to represent this. But the fact that I'm selling them for $45 doesn't magically make them worth that much, nor does it mean that I will find buyers at that price.
Went to a new shop from a friend's recommendation, DQ'ed for willful violation of CR 100.6b.
Have played duals? I have PucaPoints for them!
(Credit to DarkNightCavalier)
$tandard: Too poor.
Modern:
- GW Birthing Pod(?)
Legacy:
- UWR Delver
This is very true, and what are some ways that people can evaluate if a card is worth that price? Its not just what they are willing to pay, but if others are willing to pay it as well. This because a dangerous game when you control the perception of the sales through your own stock.
If you were in your above situation, and could push the TCG stock supply low, and give the perception that they were selling by "listing" your stock as low, even though you may be sitting on tons you bought, you would be effectively creating the image that the card is in fact worth that price.
Would people choose a cheaper deck? I think that is something we have seen is not true. People will pay largely whatever it costs to build the deck they want to play, if they feel that deck will win. is the extra 20$ per copy of Cord going to stop someone from paying it? Usually not, and that is the issue, people who play competitively are used to paying hundreds for their decks.
Edit: Just want to add that while its nice to see this topic staying open, and while I understand the issue of Ben posting on here, the idea that these "perceived" issues with SCG and pricing are often shot down because people do not have access to their accounting records and a signed confession is kind of silly. There will never be proof, we as customers of MtG do not have subpoena power or the ability to open investigations, so asking for proof is really just a waste of everyone's time, and a waste of moderators time to constantly penalize everyone who sees what they believe is obvious but can not actually provide proof of.
EDH Decks:
B Toshiro Umezawa B
W Mikaeus, the Lunarch W
G Azusa, Lost but Seeking G
UB Grimgrin, Corpse-Born BU
BGU The Mimeoplasm UGB
GUW Rubinia Soulsinger WUG
GRB Sek'Kuar, Deathkeeper BRG
It looks like people are asking me what's the point of what I wrote.
But look at some of the anti-SCG sentiment this thread has illicited. Already people are accusing SCG of manipulating prices, about controlling the market.
But I'm saying that SCG merely exhibits classical price leadership behavior by virtue of it's position in the market.
I'm saying in any market that tend to be concentrated, the dominant firm (D) tends to exhibit price leadership because:
a) when D raise prices, other market participatnts feel like they can raise their prices to follow because they can increase profitability without losing market share.
b) when D lowers prices, other market participants have to lower prices.
Ex. Why buy from the guy on ebay when SCG is charging the same thing? The latter won't rip you off.
Sounds like a ripple on a standing concept.
In barometric firm price leadership, the most reliable firm emerges as the best barometer of market conditions, or the firm could be the one with the lowest costs of production, leading other firms to follow suit. Although this firm might not be dominating the industry, its prices are believed to reflect market conditions which are the most satisfactory, as the firm would most likely be a good forecaster of economic changes.
SCG, as many other online stores have done over the years, had to build their business from the ground up. Each business starts out with some amount of initial money to invest and then through hard work and building a reputation as a solid business, are able to turn around their profits to help grow the business.
10 years ago, it was primarily ebay and brick and mortar stores, with only a smattering of online stores to note. Over the last 10 years, these numbers have grown astronomically, due to the ability to profitably run a gaming business (whether focused on mtg or not) if the business is run correctly. One such success story among them is SCG. They recognized that through having superior levels of inventory, superior customer service, and providing something more to the magic the gathering industry, that they could take their business and the game of magic in its own way, to the next level.
As much as ebay will always be the cornerstone market for magic the gathering singles especially (now also helped by tcgplayer as another large marketplace for singles, especially now that its open for the public to sell on as well). Online stores also have their own solid part of the market that they have managed to carve out. Of those online stores, SCG is the largest, most popular, and tends to have greater market influence than the rest.
This market influence comes in part with being the largest of the online stores, from running their legacy/other open tournaments each weekend around the US, and from them having the highest levels of customer service available and the best stocks of singles available. Their efforts to make their customers happy, are what keeps people coming back, and what allows them to pay a little more in order to keep cards in stock, while also charging a little more than other places in order to keep their margins intact. As a result of this market influence, many brick and mortar stores, and many individuals will often use SCG as a de-facto Scry price guide when dealing with buying/selling/trading of cards.
There have been many instances over the years of people going after SCG, believing that they are abusing their position in the market to manipulate prices. I personally, given what hard evidence I have available to me on the issue (and believing in innocent until proven guilty), believe that most of the moves SCG has made over the years through mirrored buy/sell price adjustments, are often due to very real higher demand from their view points, or simply their own belief that a card may very well be undervalued at the time.
I'm reminded of the situation with the zendikar fetchlands that occurred about a year ago was it? Demand for them had been on the rise, even I, at my brick and mortar store, with no online sales of those cards to note, had noticed a sizeable uptick in demand for them. Had I not had such a large stock of them myself from when people had sold off their rotating standard stock from zendikar block, I would have likely run out entirely before SCG took the actions they did. What SCG did in response to this increase in demand and their dwindling stock at the old prices, was to raise their buy price to $20 for Scalding Tarn and Misty Rainforest. And raise their sell price to around $30 I believe it was at the time. They then proceeded to buy out much of the NM stock available of the cards that fell below that buy price. Regular market demand, and many panicked buyers later, and more supply got bought out (not by SCG though) that helped raise the price to $25 or so, even on ebay.
For SCG, and many online stores (and even brick and mortar store sellers like myself at the time), running out of stock was simply not an option. It can be easy enough to leave the price well enough alone for a while, when one has plenty of stock available, but eventually, when stock gets low, one has to look ahead and decide what steps may need to be taken in order to keep enough stock flowing in, in order to avoid running out of the card. This often means raising the buy price to entice more people to sell to you, while raising the sell price in order to keep your margins intact (which are very important to being able to keep the doors open, as those profits help pay all of the overhead that a business has to cover beyond any product costs.)
There have been many instances over the last year or two of cards being bought out online. Some amount of this can likely be attributed to SCG, but a large amount of it often has nothing to do with them, but rather some of the many speculators out on the market that are looking to buy out the supply in hopes of artificially propping up the price so they can make a quick or sometimes more longer-term profit on their endeavors.
While I myself, don't make it a habit of speculating much in general, I do occasionally speculate some, most often on a smaller scale, sometimes on a larger one if I believe a card really is undervalued. To those suggesting that SCG just pulls inventory to show that they have sold out so they can then relist later at a higher price. I'm sure this may be true to some extent. I know many online stores, that after spotting a card starting to sell out of places, yanked their inventory before someone could buy them out as well, in hopes of waiting for the buying spree to end, so they can see where the price will settle at afterward. There are also plenty of instances when someone will buy out SCG's available stock of a card, sometimes in conjunction with buying out that product everywhere, or perhaps as part of a smaller buyout.
I personally, have done this in the past. Sometimes its simply part of a need to keep a card in stock at the shop I sell at (and having done $150,000 in sales, and over $250,000 in trading last year alone, just at the shop, not counting online sales) I can often gauge fluctuations in demand via just looking at my own sales trends and looking at why people are buying up the cards. Sometimes its some amount of my own speculation, intuition, otherwise, that genuinely doesn't believe that that $5 card should only be a $5 card. Part of the reason why SCG can often get hit first in many such buyouts, is because, unlike some online stores (who's names I wont get into here) SCG will always deliver what they sell. Whatever I have ordered from them over the years, no matter what it was, I ALWAYS got it, and always received it in the condition I was expecting, and always in a timely and hassle-free manner.
Sometimes its not just one person buying out the market for a card either. Sometimes someone may initiate such a buyout, causing supply to suddenly drop a bit, and price to tick up slightly, which can then trigger the senses of other speculators to come in and buy out the rest, if they believe too that the card is a good target for being bought out at the current price. Sometimes a store like SCG is simply reacting to buyouts from others to get the cards back in stock, or to make sure their stock is large enough to cover a new surge in demand. I know personally, its never fun getting caught with your pants down on a sudden increase. I've gotten nailed there myself, even with as much time as I spent trying to keep up with card pricing and trends, I still miss things. Thusly I'm then forced to go online and pay whatever the market is selling the cards at, at the time, in order to get the cards back in stock as quickly as possible, because my customers expected me to have everything available for them to purchase, when they needed it. Sometimes that means selling out of a card at $2, and then having to go online and pay $4 each for the card, and tentatively listing it at $5 in hopes that people will be able/willing to pay that for the card when they are looking for it. Sometimes that means paying market price of $4, and selling it at $4, and taking the small loss that will come from that simply to make sure they can fully build that deck they are looking to build, without worrying about missing cards.
Inevitably, SCG does have influence over the secondary market prices, as the leading online store of the industry, they get a lot of attention from a lot of people. But control the market? Nah, they don't. They can certainly raise their buy prices and put a floor under the value of a card due in part to having the resources to be able to handle a sudden flood of selling into them of that card. But inevitably though, unless the market is willing to pay that much for the card, it may not work out so well for them in the end. Not all speculation pans out, not even when SCG is doing it. In the end, a site like Ebay is going to be the greatest predictor of actual market value of a card, as it can show, via completed listings information, what people are actually willing to pay for the cards. That's why I personally always tend to go off of ebay valuations for cards, because I can see people actually having paid that amount for the cards recently, and thusly can feel fairly confident that if I price my own cards in that range, that I too will be able to sell my cards reasonably quickly without much hassle.
Whew, that was a long post. For those that actually bother to read my not-so-little wall of text, I hope that some of my insights will prove helpful to the discussion :).
SCG has articles directly on their website talking about how they bought up markets (Fetchlands, Wastelands), yet this is a taboo topic?