Tradecraft: Purchases of Opportunity

Once you've been in the biz for a while and you have a reasonable cash reserve, or even an unreasonable one but access to money from credit or whatever, you eventually get approached to make large-scale buys that may or may not be directly in line with your daily processes.  And you throw out the ratio table and it's up to you as a dealer to assess exactly what kind of money you can make from this merch, and how quickly, and how much that's going to affect operations until you've recouped.

I don't mean just a large collection of whatever you deal in.  While you should absolutely "summarize" your offer on such an instance, buying at ratio is still fundamentally correct and you're actually playing with a third rail if you diverge too far from it.  This is the stuff you allocate your resources expecting to buy with regular frequency, and approximately 100% of it needs to ingest directly to inventory through your daily processes.  For DSG, this means Magic: the Gathering singles, board games, movies, and most video games.

No, when I refer to a Purchase of Opportunity, I mean when you get approached to buy something that isn't regular merch but is within your sphere of expertise, for value, and part of why you throw out the ratio sheet is that usually you only field these offers from someone who you need to take care of.  Long-time friends, closing competitors, peers who made even bigger buys that they need to split with allies, local celebrities cleaning out their closets, that sort of thing.

In fact, a good friend of mine who is in the security business, used to deal in sports memorabilia by dint of an endless string of referrals from the local athletes and other movers and shakers who he'd serve in his primary business.  They would strike up a rapport, and he'd make it known he was a collector and always willing to buy.  The next time that athlete was doing some decluttering, my friend would suddenly find himself with a stack of goods that included actual memorabilia (game-worn uniforms and autographed game balls and related merch) and just "stuff rich people have extras of" like last-generation computers and home theater hardware.  He once got an arcade game for some nominal amount, a couple hundred dollars and the labor to haul it away from the athlete's estate, got it home and opened it up, to find less than 100 plays on the coin audit meter.  The baller had bought it for Christmas for his kids, they played it a few times, and then it went into the garage and sat untouched for a decade.  Arcade collectors call these units "HUO," for "Home Use Only," and they are excitedly sought.

We won't all get vintage jackpots for the price of a truck drive, but we have to be ready for even the modest pickups.  I had a small win when I acquired a great Sony WEGA CRT for retro video games for the price of hauling it away from a good friend's father's house.  They needed it gone, Goodwill literally won't take CRTs anymore, and I'm still in good enough health to lift things (for now).  They tossed in half a dozen boxes of old movies.  At the end of the day I'd have passed on that if it were a merch offer because I didn't have a great prospect of resale for those items, but since I knew I could literally use it as a gameplay TV until I figured out a business purpose, I was happy to haul.

I recently had a very archetypical Purchase of Opportunity, and that's what made me think to write this article. A couple weeks back, a long-time friend who had already sold me some great rare Nintendo material years ago from his previous career in marketing, offered me a literal (pickup) truckload of the remainder of his collection.  He had gone to the effort of finding me eBay pricing on all the goods already, and I took a look at the spreads and the kind of merch involved and realized that reselling conventionally would be within acceptable risk parameters.  I could really do well if I was willing to take my time, and in the meanwhile I could split the buy with some peers as a hedge to cover it fast.  I offered what would have been a clear overpayment if it had been a stranger bringing me the goods, but I knew this guy didn't deal in junk -- if it was in his collection, it was the real stuff, and if he said it worked, it did.  He was delighted with the number, and money changed hands.

I have been carefully processing the entire batch, and sure enough, it fell within expectations.  Some of the merch went right to main inventory within normal processes... need a couple dozen Game Boy Advances and Wii systems?  I'll always want that stock.  Some of it is flat-out promotional marketing memorabilia, much like from the earlier buy.  I'm mixing that up between keeping for DSG and splitting it up into bundles to sell to my peers for their own purposes.  Some of it is just spare parts and such that I will, for the most part, just use in the workshop.  A small few things weren't especially useful in one way or another, and I build that expectation into the buy.  I'll either give them away or whatever.  And some of the collection is the highly sought goods that are just for stores -- or for serious collectors -- kiosk hardware, rack and fixture, specialized merch, signage, and so on.  I have real work to do in recouping my purchase in a timely fashion, but I would make this deal ten times out of ten even though it was for a non-trivial amount of cash.

I'll end this article with a little captioned photo gallery of some of the collection, but I want to leave you with this thought as today's tradecraft lesson.  I don't know where the next collection like this is going to come from, or even what kind of merch it's going to be.  I can tell you that if it's a known-serious collector or especially an industry source whose merch is going to be the real deal, I will be engaging in what amounts to fairly critical research on short notice to find a number that's low enough I can still make a profit, but high enough that the seller knows I am taking him or her seriously.  Finding that number and being confident in it means drawing on all the information-gathering practice I've had, plus all my previous dealing experience in comparables, and being professional enough in the interaction to radiate credibility.  You know how sometimes people say someone comes off as a used-car salesman shady type?  They failed that test.  Learn your craft and hope you get a Purchase of Opportunity to try again.

Check out all this great stuff:

These are some of the top goods in the buy, a handful of actual complete kiosks in working order.  Some are full floor-length with weights, some are countertops, there are scads of security mounts and cables and chains and fasteners, and it's all 100% authentic.  I'm offsetting a very small amount of this to peers and keeping the rest for DSG locations, present and future.

One of the kiosks, in fact, is still factory-sealed!  This essentially never happens.  Some store had to have cancelled a merchandising order or closed unexpectedly or who knows what all.  Since DSG is going to use its kiosks for public play, we're fine with the used ones and that made this an ideal candidate for resale.

I shouldn't get so excited about little fixtures like this but the buy had a whole bunch of these still new in the carton, and they look outstanding!  They fit CIB games from GB, GBC, GBA, DS, and 3DS, as well as all DVD-cased system games (Gamecube, Wii, Wii U).  Honestly I'm having a hard time deciding whether or at what price to sell the "extras" because I could very easily use every single one of these at DSG, and yet I know some peers will want these racks.

You'd be surprised at how much CIB accessories sometimes go for at market value.  This is not the absurdly rare and valuable Gamecube Component Cable, but for accept-no-compromise Wii collectors, streamers, speedrunners, and purists, nothing but an OEM RVL-011 will do.  It helps that Nintendo's own first-party hardware is so consistently high-quality.

New hardware but not in a retail SKU package?  That's factory-certified product, and any chance to sell a 13-year-old console (this is a RVL-101 black Wii) brand new at a premium to the collectors who demand it, is not to be passed up.

The collection contained a truly frightening number of display-only DS units, sought both by collectors and case-modders.  I don't actually think my peers need many of these, so most of them will be trickled out on the collector market.  This is good value that is going to take me forever to harvest.

The frame came from the craft shop near the mall, but the signage was a fixture-fill panel made of hard paperstock.  These things are large, vivid, and look phenomenal on the wall.  Fortunately for my peers, I do have extras and they are going to get access to them.

More top-notch marketing signage.

The collection contained "kiosk DS" units from various generations and release versions.  The common thing about these is that they don't work at all when unplugged from AC power.  There's a battery in there, in fact there has to be for it to work, and it does charge the battery.  (I have discovered these things in testing).  But if you pull the plug, insta-shutdown.  No doubt this was to discourage theft and vandalism.  One example above, another below:

So there are enough of these, and enough security hardware including bolts, brackets, cables, chains, fasteners, and so on, that I am going to be able to build working kiosks for DSGs present and future and still have a bunch of spares to sell to peers and on eBay and so on.  I even have some like the aqua 3DS in the photo above that were left over after I ran out of brackets for that specific model, and yet it's a working system that I can use to test games, accessories, and so forth, freeing up my existing test unit for regular sale in inventory.  The meat of the collection is definitely the stacks of consoles and handhelds I've been processing.

There are even Wii U kiosk units that, similarly, have security-wired controllers and special circuitry so that they will not work as a conventional retail unit would, but are tailored exactly to be ideal in a store setting.  The photo above shows the special Wii U on top and a regular Wii U on the bottom for the purpose of comparison.  I expect to have roughly one spare Wii U kiosk kit after keeping what DSG needs, and finding it complete doesn't come cheap, so I'll look for market value on that regardless of the buyer.

That's not even all of it!  But if I keep sitting here typing, I'm not selling, and I need most of this stuff sold, so I'm going to get right back to it.  May your Purchases of Opportunity be as great!