The Positives and Negatives

So I originally wrote this as a long email reply to a potential client looking to do a large investment in sealed Pokemon product. I felt like it is a pretty decent guide to someone looking to invest in Pokemon product for the first time and I wanted to share it here as well.

Here is the main question I received. User will remain anonymous:

Thanks for the link to your site— the price drop really helps. I’m just starting to invest in Pokémon long-term (I mentioned that I just bought my 1st sealed box from my friend at a LCS this past Monday). I don’t want to miss out on this great Japanese 151 set, and that’s why I was hoping to get 1 more sealed case. Anyway, it would be hard financially, but do you think this Japanese 151 set would be worth investing “heavily” in? Meaning, would you recommend that I pool most of my free resources to buy 3 more sealed cases (for a total of 4, assuming that you have 3 to sell)? Or am I just getting too eager from the get-go and should wait for a different Japanese set? I’m fine waiting 5-10 years before reselling (assuming that my house doesn’t burn down ). I also get nervous, like I mentioned, that I’ll get “stuck” with these sealed boxes down the road if people doesn’t believe they’re “legitimate” or whatever since I won’t have a receipt from Japan or some sort of paper trail.

Here is my response:

Hey thanks for reaching out! I have a lot of info regarding your inquiries that I can shed some light on. This email may end up being a bit lengthy but hopefully it will help you make an informed decision. I also just want to preface that anything I say here is only based on my personal perspective and you should always make your own decision based on your own research and what you believe is best for you.

With that being said let's start with investing in Pokemon as a whole and what I believe to be the positives and negatives.

Positives

• Sometimes amazing margins and profits to be made

• Owning a physical product vs a stock/crypto that can be manipulated (like the gamestop or sheeba coin fiasco)

• More fun than the stock market/crypto market

• Biggest IP in the world with a consistent history of massive profits

• Building your own collection for a discount (if you're interested in that)

Negatives

• Liquidity is based on the ability to sell the product and ship it vs the stock market/crypto market which allows you to just click a button and you have your money in seconds

• Space to store the product

• Higher risk (robbery, fire, difficulty to liquidate, market crashes, etc.)

• Putting all your eggs in one basket vs being able to diversify your investment between multiple different companies/sectors (effectively lowering risk)

Okay with those positives and negatives, I'd like to elaborate on a few of your questions. As far as "heavily" investing in Pokemon 151, it's difficult for me to give you a straight answer because I'm not sure of your particular situation. For me I've never had any issues liquidating a product on eBay. Yes there are fees but outside of that as long as you don't have a terrible rating from selling fake products (which you don't), you won't have any trouble selling the case. If you're planning on holding for 5-10 years you're almost guaranteed to make a profit, even with eBays fees. Now obviously nothing is guaranteed, but from my perspective this product Pokemon 151 is an amazing investment and will have potentially similar gains to what happened with Eevee Heroes in the past (check the price history of the cards and sealed boxes from that set). 

Now here's the big question. Will this product outpace the potential returns you could get on your money if you invested in the stock market/crypto? Let's say you invested in Apple or diversified and invested in some growth stocks along with S&P/your choice of ETF. Would Pokemon beat some of the safer stock market bets? Probably yes. Would it beat some of the more risky investments in lets say, Tesla, NVDA, etc? I think with the right product, potentially, but nothing is for certain and once again we come back to the idea of liquidity.

It's very easy to liquidate stocks and crypto, whereas it takes a lot more time and energy before getting a return on your money from Pokemon. Let's face it, time and energy is arguably the most valuable asset in the world. So you have to ask yourself, is it worth it for me? Do you enjoy making listings online and talking to potential clients? Do you enjoy preparing shipments and everything else that comes with selling Pokemon products? For me the answer to those questions is yes, I was looking to make this a business because I saw a lot of opportunity in it and I love trading cards (Pokemon, Magic, Weiss, etc.) but for you it might be a different story.

Now obviously I'm not saying you have to make this a business but if you're looking to heavily invest in a product and you want the full profit margin returns, it might take a bit of work on your end. Now you could always sell to a card shop (which will know right away whether or not your case is authentic), but then you're not getting the full return on your investment because they probably won't want to give you market price. You can also always open the case and sell the individual boxes, but that's a lot more work as well and sometimes the sealed cases sell more than the total price of the boxes inside. 

I will say though, these are all hypothetical ideas and even as a very small eBay seller, I've never had any issues selling my cases on eBay. People know that if they receive a fake or tampered product, they can just contact eBay for a return. So it's actually very difficult to sell fraudulent products on eBay because as soon as you start getting those return requests or your seller rating goes down, either no one will buy from you or eBay will shut you down. And of course now I'm selling on my website a lot more than eBay because I hate the fees. I also have a small trusted customer base that buys from me knowing they get a better price and a high quality product.

Also as far as your concerns about legitimacy, I think that ties in to the previous point. It's very hard to fake these products and tamper without any evidence, don't believe all the negativity out there about resealed products. I've been buying and selling stuff for many years and I have yet to have any issues with this sort of thing, even when buying from small sellers. I can of course provide you with wire transfer documentation but in all honesty no one will ask you for something like that haha (well at least I've never had that question asked). But if it helps you that's no problem for me at all!

So I think if you already have investments in place in both the stock market, crypto market or another secondary market, and would like to expand to Pokemon, that's a great idea!! If Pokemon is something you want to invest primarily in, here are some tips that I think can help you out.

1. Diversify your product

Now I personally believe A LOT in Pokemon 151. I own 10 sealed cases and nearly 100 loose boxes and replenish my stock whenever I sell some. I just think it has MASSIVE potential. I know this first tip is about diversity though, so I will say I also have cases of Eevee Heroes, VMAX Climax, VSTAR Universe, and several other sets. My entry point into those sets was a good price, but now (besides VSTAR Universe, which I'll get to in a second) the prices are too high and the returns are not as high as something like Pokemon 151 or VSTAR Universe. Both of those sets sell for around $2000-2100 a case, which I think can easily come close to double the price by the same time next year once they're out of print (speculation of course). Especially VSTAR, this last print run was probably the last one and so it's an amazing time to buy into that set. It's also harder to liquidate a case that costs $7500 (like Eevee Heroes) so I most likely would be better off opening it and selling the individual boxes or finding a card shop that wants a case.

In addition to all of the above information, the price of English Pokemon cards is at rock bottom for sealed products. You can get sealed booster boxes at distributor price! That's insane and the investment potential is HUGE there. If you take a look at Sword and Shield era booster box prices for English sets, many of the boxes have increased in price by as much as 50% in just ONE YEAR.

So as you can see you have a lot of potential options as far as investing in these products, and as I stated above, "don't put all your eggs in one basket!" That goes for investing in general as well as investing in Pokemon. But if you see Pokemon 151 as an amazing product with potential for profit and very liquid because it's highly sought after, then I wouldn't fault you for going all in. I just wanted to make sure to give you all the options at your disposal.

2. Dollar cost averaging

I'm not sure if you're familiar with this term but if not I would recommend reading into it a bit here. It definitely applies in Pokemon investing as well as Crypto and Stocks. It's a great strategy with little downside. 

In Pokemon there are many times when a set is in print that it will fluctuate in price. Pokemon 151 has already fluctuated many times and I've managed to get boxes at different price points with my average being pretty low compared to other sellers I know. I do this by simply paying attention to the market and making sure to be up to date on reprints. When supply is running low and demand is still high, the price will go up. So that's a great time to try to sell as much as you can before the next reprint where the demand will be met and supply will resurge, driving the price down lower (and then you buy more). If you ever want to know about reprints you can contact me, my Japanese suppliers keep me up to date on that kind of stuff but there's also a lot of information you can find readily on social media platforms from other sellers/content creators (IG, TikTok, etc.).

Right now Pokemon 151 is at a pretty good price overall and has stabilized compared to the original volatility we saw when the set first dropped. I think buying in now is a good idea, but don't get FOMO and think you'll never get at this price again, if you're patient, another big reprint could come later this year to satisfy the continued demand and the price could drop. So patience is always a good idea with anything in life. I would recommend buying maybe a case or two now and then waiting for the next (and most likely final) reprint to buy more if you're still looking for more. VSTAR on the other hand will probably not go down in price again so if that's a potential product you're interested in I would recommend buying some in the next couple months as prices will begin to rise.

3. Don't FOMO

I've made the mistake of FOMOing into products without researching enough but thankfully I haven't really been burned too badly. I think this point will basically serve as a conclusion to this whole write up I did (sorry that it's insanely long!! haha). Basically, do your research, make an educated decision, and you'll come out with profits.

Thanks for reading

-Kuba