I had a great adventure in collectibles that I have just wrapped up. Today I want to share my findings in the collectible card market and where I believe things are going for the industry and myself.
After starting a business in the collectible card industry (Pokemon focused), I’ve made interesting observations. I’ll categorize them into scarcity, trade secrets, and business development.
Table of Contents
Scarcity
For those unfamiliar with the Pokemon card market, it is currently dominated by scarcity. Pokemon card packs are made in a low enough quantity where the massive franchise is relying on resale to distribute product to their fans. A card pack that may typically be $1-2 is now up to $15, showing an incredible 7.5-15x value multiplier.
The Dynamic of Perceived Value
While the pieces of cardboard art (Pokemon cards) don’t necessarily hold innate value, many of them sell at incredible prices with valuable cards often exceeding $100 and occasionally tapping into the millions. This brings the interesting question… what is value? While it can simply be the amount anyone is willing to pay for an item, that also implies something more sinister. As we see social media influencing ideas to a greater and greater extent, proper advertising can lead bad actors to market manipulation.
Consider a card worth 50 cents. If enough people organize to buy the supply at $1 while holding additional inventory and promoting how awesome the product is, the mean will trend upward, allowing them to offload the remaining inventory at 2x the implied value and causing buyers to ‘overpay’. Overpay is in quotes as the implied value is $1, but it is only that high due to the manipulation. Factor in that many of the buyers in the area are young, and a dangerous market emerges.
Trade Secrets
In running my new business I ran into a familiar foe; corruption and collusion. As I’ve seen in previous work, highly successful players in the area are using unethical and often illegal practices to generate profits. Without anyone to hold them accountable, these groups dominate and make it extremely challenging for legitimate competitors to stay afloat. I’ve yet to come to a solution here. Should those going into business research competitors to the point of litigation? Likely not, the time and funds required are generally not available to small business ventures.
As I began looking for ways to be competitive, I quickly noticed myself exploring methods that would accomplish my goal. That and getting in contact with a Pokemon Company representative (who confirmed demand would begin to be met in 2026 -> my inventory value drops significantly), I decided to close up shop. But what was the business?
Business Development
Below I will describe the unique business I developed and include to document our approach. If you are not interested in the concept, focus on the key takeaways:
- Community is key
- Super users are great, but you need consistent growth.
- Don’t overcomplicate things. Limit your offerings.
- Self-accountability and passion key in entrepreneurship.
Grailsy
The concept behind Grailsy was to remove the mistrust and scammy nature of many resale-based markets. As mentioned, Pokemon cards heavily rely on resale to to the limited availability. That means if you want a specific Pikachu card, you needed to find someone in the world that has it, is reliable, can prove the condition, is offering a reasonable price, and fulfills the transaction. It is not uncommon for cards to never arrive, arrive in poor condition, or be fake. So, here is what we did:
Develop a platform where the platform holds all inventory, reviews conditions, and fulfills transactions. This means that folks can reliably receive their items from an uninvolved and unbiased party. This also means that sellers have to send their items in before a sale occurs to verify them. Because of that, we often focused on selling our own inventory.
The platform
Below you will see a video featuring some of the platform’s functionality including:
Key Features
Custom shop system
- This has a featured items section, utilized a site-wide currency (coins), and provided links to additional information on all items for sale. Possibly my favorite feature is the ability to tilt your cards around as featured in the video.
- A pre-loaded inventory would show here for immediate search term and sorting results without the need for loading. Values can be sorted in coins or USD.
Shop page to purchase coins
- You choose the quantity!
- You can also subscribe for our monthly item drop where everyone wins something.
- This information was passed through to a secure stripe checkout via Stripe APIs.
Trade system
- Trade items and coins with other users
Collection Viewer
- View your own or another user’s collection
- This included a way to ship items to yourself, sell them, or trade them.
- You could also view items that were shipped to someone previously (e.g. I had a Pikachu but shipped it 1 month ago, I can still see that I previously owned it)
Supplemental Features
Backer-system
- This was a way to crowdfund the platform. Donors were given a tradable and sellable token in their inventory that provided lifetime benefits.
Site-wide activity log
- A currency/balance and trade counter
- Mystery Packs
- Mystery packs are becoming more and more popular. I added functionality to support this trend and allowed backers to create one pack. Then, 10% of revenue from those purchased mystery packs would be given to the backer.
- Minigames
- Everyone likes a good minigame! We added a few simple games (similar to rock paper scissors) and then slightly more complex games. These were more popular than anticipated and allowed folks to earn free coins.
- Leaderboard
- I developed a custom leaderboard that showed the top 3 users in each category and the current user’s value. Metric examples are ‘games played’, ‘items purchased’, and ‘collection value’
- Voting
- I wanted the platform to be ran by the users, so I made a voting system so backers and subscribers could decide what gets developed next.
- Events
- Our live events were the main driver of new users. These were generally unique games that were free to join and everyone wins. Smaller items were won throughout the game and a larger prize was distributed at the end.
- Back-end
- Behind the scenes I had a custom database that tracked all actions and allowed for easy month-to-month accounting.
This was the first time I…
- Utilized payment APIs
- Developed a temp database for instantaneous shop loads
- Scheduled Cron jobs for periodic clean-up actions
- Advertised on social media to the extent I did (including live streamed events)
- And probably many other things I am now forgetting
My Future
With this venture behind me, I can reflect and realize how much work I was putting in on top of my full time job. Despite how tired I was, this was enjoyable work and I always got it done. I knew I needed to continue to pursue entrepreneurship if I wanted to be happy and that is what I did. I am in the process of acquiring a health diagnostics business that I believe will allow me to refocus on staying healthy while chasing my entrepreneurial desires.
Due to the government shutdown, the paperwork for the acquisition cannot move forward. I am taking the time to learn more about physiology and practice what I learn. I have seen great results so far and am excited to begin working at my shop. This shutdown is showing signs of an extended resolution time-frame, so I have decided to pick up a part-time gig while I wait. I want to challenge myself and learn to bartend despite never having alcohol. Updates on that, health findings, and the new business may trickle in over the next few months…