When I decided it was time to ditch the 9-5 world to launch my data analytics business, I had a great partner, some savings, a marketable skill set and a wicked urge to leave the office-life behind. I also encountered the same problem millions of entrepreneurs around the world face: startup costs.
I wanted to reserve most of my savings for living expenses in case things didn’t pan out, so I needed a way to generate a lot of income quickly. I could always freelance with my data skills, but business development would take time I didn’t have. Instead, I decided to look at examples of people who funded their careers in unconventional ways: Jay Z sold crack. Quentin Tarantino worked in the adult film industry. Kevin Smith sold his entire comic book collection to fund Clerks.
I took what Kevin Smith did one step further and became a rare comic book dealer. I’ve been a massive comic book geek my whole life and have accumulated an encyclopedic knowledge of comic book lore. If I applied data analytics to the comic book market, surely I could find dozens of opportunities for arbitrage!
I did -- and wound up with almost $9,000 to fund my startup. Here’s a peek inside my strategy.
People collect comics for pleasure, but most of us also maintain a faint hope that our collections will one day be worth a ton of money. The odds against this are colossal. Today, comic books are printed in runs of 50,000 to 100,000 based on demand. Headline-grabbing sales like Action Comics #1 for $2.1 million are the exception, not the rule. Unfortunately, an old comic isn’t necessarily a valuable one.
It’s challenging, but it’s crucial to separate the fanboy from the business. Sure, that complete run of mid-1990’s Spider-Man titles would complete your collection -- but will it sell? (Answer: No).
Knowing this, I developed a target market and inventory. I made a list of comics that were consistently selling on eBay and in stores significantly above book-value, the list price in the Overstreet Comics Price Guide, which is used as a benchmark to determine a comic’s approximate market value. Comics that were selling above book-value were typically related to upcoming movies and first appearances of characters in movies. I hunted for these key issues and began buying collections in bulk.
As you study the market, build relationships with other collectors and dealers through your local comic shop, Craigslist and flea markets. When you’re ready to buy, most dealers and collectors will be happy to negotiate bulk discounts, especially if you plan to buy from them often.
I started small, buying key issues from 1970s to 1990s that were under $150. Instead of cherrypicking specific issues from larger collections, I’d buy the entire collection based on economies of scale.
The more common comics I sold at conventions for $0.50 to $1. I had never sold at a comic book convention before, but another dealer, Jason of Jason Hamlin Comics, showed me how to attractively price comics to move. Selling at conventions has lower margins, about 70%.
However, I found much higher margins on eBay because of the global market, especially for valuable comics. In a mediocre 900-comic collection I bought for $300 (about $0.33 per comic), I’d usually have 10 comics I could sell for $40 to $80 each on eBay. For example, when I flipped my first collection, I made $450 from 10 comics on eBay and I sold the rest at conventions for about $0.70 each. I walked away with over $1,000 after paying eBay and convention fees -- not bad for a few hours of work and a $300 outlay!
After three full-collection flips that earned me $8,000 in two months, I decided moving common comics was more trouble than it was worth and focused exclusively on selling high-premium issues online. My best purchases (and sales) included:
Here’s where my data analytics background really came in handy. To keep track of my buyers, I developed a rudimentary Customer Relationship Management (CRM) system in Excel. I segmented them by geography, purchase price/average margin, and comic characters. Whenever someone made a purchase, their name went into my system.
Whenever I listed a comic that fit their interest profile, I sent them a personalized message informing them of the new listing. This small action drastically increased the bidding activity on my listings, driving up sales prices, and my margins skyrocketed. I started at about a 70% profit margin, but by the time I stopped dealing, I was averaging a 321% profit margin.
This isn’t to say you should spam your previous buyers with mass emails of your new listings. Don’t be that guy. Instead, if you have something new that you’re sure a previous buyer would like, shoot him a personalized email letting him know that you’ve acquired some new comics he might be interested in. Even if he doesn’t win the auction, he may incite a bidding war that benefits your bottom line.
Once I liquidated my massive inventory of 3,200 comic books, I had done over $17,000 in sales with a final profit of $8,986 to fund my startup -- and a great story.
Your Turn: Would you buy and sell comic books to earn money?
Carl Forrest is the cofounder of DataSetGo. He enjoys solving problems and salteñas. Especially salteñas.