Every Offer Needs a Market

“I’ll give you 30 bucks for all of it,” Charlie says as she drops the spare car parts on uncle Hank’s desk. “30?!” Hank protests. “I can get twice that much for the coil alone.” But Charlie’s counteroffer is pretty convincing: “From who? I’m the only one that comes in here.”

If you’ve ever tried to sell a rare item, you might have encountered this dynamic: Every offer needs a market. You can look up your grandma’s rare china and see that there are only a few sets of that particular tableware left in the world — but if nobody wants to buy them, that rarity is worth very little.

After I started collecting Pokémon cards again, I discovered several cool, old, limited edition boxes. Far from their original retail price of $20, some of these rare sets now sell for $100, $500, even $1,000 and more.

However, since they are so scarce and expensive, not many people want to buy them. So even if there are only ten boxes for sale, as long as there’s only one buyer, that’s still a 10x overhang in supply vs. demand. If you track listings for some of these boxes on eBay, you might see only one, maybe two selling in any given month.

As a result, whoever wants to move some of these boxes will have to compromise on one of two things: the timeline or the price. You can wait until a buyer coughs up the number you’re technically entitled to given the data, or you can speed up the process by lowering your ask. Especially if you’re trying to sell multiple items at once, you might have no choice but to do the latter. That’s why, as a buyer, it’s always worth asking for a deal.

If you’re used to buying and selling major stocks or common household items on Craigslist, you’ll never encounter this problem. There’s always plenty of both supply and demand. But if you one day find yourself holding an illiquid cryptocurrency or NFT no one wants, or struggling to sell what you believe is a cool collectible, remember that scarcity does not create value on its own. Every offer needs a market.

As a collector and investor, make sure you enjoy what you own. And as a customer, never forget that while monopolies can dictate prices, so can you if you’re the only one in the store.