Looping the Hen

New Economy II: Ebay, Part 1, the Value Add

I have a couple more New Economy posts to do. This one will focus very narrowly on just one example of how it is possible to make a killing doing what you love. To be honest, just thinking about what this person (actually, there are a few) is doing on Ebay and how much money he is making for a tiny bit of work makes me almost sick to my stomach.

You won’t need to know anything about gaming other than what I mention here; this is more about how ‘value-adding’ can mean the difference between making pennies or dollars. As an example of value-adding, I will use my brother Todd. For example, say he has a copy of Windows he can sell for $99. That is his cost, and is what he will charge his customer, if his customer will pay him $50 to install it on a PC. The $50 is what I call a ‘value-add’ the customer gets because he doesn’t want to deal with installing the software himself. It is good solid money, and breaks down to a good hourly wage.

On Ebay, I often see people in my hobby selling D&D figures for a tiny markup. They make a very low hourly wage, if one counts the additional time spent packaging, making labels, listing the item, etc. I would bet many of them see only the ‘I bought it for $1.00 and sold it for $2.00, I have made $1.00 profit .’ They don’t take into account that it took them 15 minutes of their time, between listing and getting it out the door. If they can only do only 4 of them per hour, they are making a grand total of $4.00/hour. Woopteedoo! As I showed in my last post in this series, time can be a hugely valuable commodity.

While searching through various game listings, I came across a bunch that left me, well, dumbfounded and awestruck. For example, take a look at this one. These are being sold for a game called Heroscape; however, they are actually DDM figures (the game I play). When sold as figures for my game, they run around $2.00 for the three shown. He made $26.00. Not bad, considering he bought them for $.66 each (and in bulk they cost even less). (Really, go take a look at the links, I'll wait for you to get back.)

So what was the value-add and how much time did it take him to achieve? Just guessing, he had to rebase the 3 figures. He does a ton of these, so he probably has a system to it, either through painting the original base or rebasing with actual Heroscape bases (comparing to my own bases, I would guess he is rebasing). I would say that runs 10 minutes. Printing a glossy stat card to go with it as shown probably costs another $.50 and 2 minutes. Then the packaging and shipping costs the same as any the figure in the other example, or 15 minutes.

So let’s add it up. For a total investment of $2.50 and 27 minutes, he is making $26.00. That is over $55.00/hour. Seems like a better way to spend one’s time than shlucking it out for pennies, oui?

I didn’t take into account a couple of things, but that is because I think they wash. It took him time to design the stat card for the new game. However, it is obvious this seller is a gamer himself, so I will assume he uses these types of figures in his own games, and would have done it regardless of being able to sell it. Even if he didn’t and it cost him 2 or 3 hours to design it, if he makes 2 or 3 of these sales at these prices, he is still making around $45 or $50/hour. At home. By playing games.

Sure, there are some variables and risk at work here, but one has that in any business. The game could stop selling. Other people could start competing. Heck, I’ve thought of lifting his entire ad, printing out the stat cards, rebasing some of my own figures, and doing this myself. However, no need to make enemies needlessly when I might be able to enlist his aid in doing the same thing he is, but the other way around. In any case, he'd never need be out more than $75 in materials, which is pocket change to people who hang around Ebay. Where else can you literally run a business making $80,000 a year with an exacto knife, some glue and a big pile of little people? (Yes, I know realistically there might not be a market for that many custom figurines, but you get the idea)

So I am going to try taking common Heroscape (or any other game in that genre) figures and making them into custom creatures in my game. No one is doing it as far as I know, so there’s no competition to start. If I can get 15 or 20 unique models going like he did before I even start to try to sell them, I can get a good jump on the competition that will definitely spring up, as based on the number of listings there are far more people playing my game than are playing Heroscape. There are a ton of places on the web where I can download the stat card; a little work in a photo-editing tool and I should be able to create decent replicas pretty easily.

The question is, does the market exist on my side like it does on his? I don’t rightly know, but I would guess there is a portion of the market that likes having something no one else does. Collecting is a huge part of this hobby. And for me, so is playing with them. So if nothing else, if my gaming group accepts the figures as playable, I can use them regardless.

(Rodney, if you’re interesting in helping me design some cool figs for this, let me know! I have a Mage Knight figure set on the way, I am going to see if I can find some common ones to try this on.)