In my last article, I wrote about how the comics you purchase can help you keep your costs down to increase your Return on Investment. This article will focus on some costs you may not have even considered that could affect your bottom line. Let’s talk about hidden comic costs.
Basic Non-Book Costs
Bags, Boards, and Boxes (Oh my!!!)
Comic books are fragile collectibles. Bags, backer boards, and comic boxes protect comics from harm. These defense costs are very minimal to most collectors, but they can add up in the long run. The better your level of protection, the higher your expenses. This, in return, lowers your ROI.
There are different types of comic book bags beyond the sizes. These materials determine the protection level. Polypropylene, polyethylene, or Mylar are the main types of comic book bags. Polypropylene is the cheapest you can buy, but I argue it is the worst for protecting comic books. On the other end of the spectrum is Mylar. Libraries and governmental institutions require the highest level of protection for their documents. They use Mylar to protect their documents. These bags are the best for your collection but cost a lot more.
What the investor has to do is determine the right protection to maintain a healthy ROI when selling their books. I let the cost of the book and its long-term potential determine the protection I use. Bags are the first line of defense. You must choose the right level of protection for each of your books. Boards and boxes also can vary in price based upon the protection level provided.
Check your books annually. Boxes deteriorate over time. Stacking boxes is a problem. Improperly sealed books can also start to smell like mildew because of moisture in the environment. You may find signs of rodent damage. It is best if you catch the damage as soon as you can.
Get out the Microscope
A basic cost for many comic book investors is grading fees. Grading takes away the mystery of the condition of the book. A graded book is easier to sell than a non-graded book. CGC, CBCS, and PGX charge money for their grading services. The fees you pay vary based upon the company you use and the books you seek graded. Rarely is that fee factored into the cost of your books. Do not make that mistake.
Books that will get a lower grade or are non-keys should not be graded. I have seen these books sell for less than the fee paid to have them graded. You have to be smart with what books you get graded.
Burning Down the House
Insurance is a must for ALL collectors. Homeowners insure their homes against loss. What happens if your comic books are lost when you lose your house?
Many of our readers have collections that can exceed tens of thousands of dollars or more. The out-of-pocket cost to replace those books may exceed the ability to replace these books for many if they have no insurance.
The most basic thing you can do is to get insurance on your books. Prices have exploded for some books. If you do not get these books re-appraised the insurance company will only pay you for the last appraisal. Ultimate Fallout #4 in 2018 would cost you about $250 for a 9.8 and yet now that book has an FMV of $2,450 on August 30, 2021.
As your books rapidly increase in value or you add an expensive book, please get them re-appraised for insurance purposes. If you do not, you will get from your insurance company a check for $250. Today that would only allow you to buy maybe a 6.5 copy!
Storage War Fees
Comic books take up space. Space costs money. I am amazed that an investor would never take into account storage space as a cost. If you rent a storage unit then this cost is easily identified. If you rent an apartment and need to add a room for your books you can again see that cost every month. Homeowners seem to never add that cost as an expense because they take storage in their homes for granted. That is, until a spouse or a child needs that space.
Many investors and collectors will have their collections evolve as they do. I once bought a collection from a store that I found out had belonged to another attorney. He was downsizing his collection to a smaller number of older books. Years later I ended up doing the same because space became much more valuable in my home.
Every collector should factor in their space as a cost because this can influence the books you choose to invest in. A smaller collection takes up less space and, thus, is much easier to protect. This will allow you to keep your storage costs down.
Many collectors like to save costs for storage by placing their slabbed books on a wall. The slabs do not protect the books from UV damage. Even if a book is graded a 9.8, a sun-damaged book will not see the returns a non-damaged book will obtain. Sellers know this. I have heard of one seller who would use a picture of a slabbed book and then deliver to people another slabbed book with sun damage. He would argue that each book received the same grade so there was nothing wrong with this conduct. Books with the same grade may have a different FMV, and sun damage is one reason for these differences.
Pallets may keep your books off the ground. An inch may be the difference in a flood. That small investment can sometimes save you in the long run.
Costs Even Ignored by Experts
Punching the Clock
How much time have you spent reading this article? Time is money. An attorney will bill for time to conduct research for a case. A home builder needs to conduct prep work before they begin to build a house. It is ironic that comic book investors rarely factor in the time they spend on buying, researching, and selling their books. Many sellers factor in the cost of the booth at conventions or auction fees, but rarely do they add the time they spend working that booth or auction. An employee may cost you $15 to work that booth but most investors are apparently willing to work for free. Do not be that person.
The size of your collection can impact the time you invest in it. If you do not want to factor in your time, you should downsize your collection slightly to offset this cost.
Recently on an internet comic book board, a hobbyist told of a store that invested very little time in their books. They had a policy, though, that before you purchased a book as priced they reserved the right to review the book to see if the price should be adjusted.
The owner did not want you to buy a hot book in the dollar bin for well below the FMV. They eliminated the time expense for their workers so they wanted the buyers to do the work for them for free. Sounds bad? Well, that is what you are doing if you do not factor in your time in your costs.
The Other Costs
Many investors love going to their local comic store and find hidden gems in the dollar bins. Others like buying books at comic cons. This costs gas and the price of tickets. I keep track of my incidentals to let me know how much a book truly cost.
I once was told by a fan that a comic con special he received cost him nothing. He would receive only pure profit from the sale of the item. The individual did not include in his costs the price of the plane ticket, hotel expense, and the price of that comic con ticket. He still argued the exclusive was free. He did get a priceless experience, but that does not mean the exclusive was free. Try to keep a list of your expenses with each book your purchase and sell. You might be amazed at how little profit you are truly making on your books.
Keeping track of your expenses can help you identify sources and methods to maximize your ROI. Buying books in bulk has led many investors to find hidden gem keys and high-grade books. They then flip the others quickly to keep their storage fees down. Sometimes, the price that they bought the whole collection for is less than the selling price for the remaining books just days after their initial purchase.
Many costs are incurred in our hobby. You must understand them to determine how your books are performing. First, you must properly identify your costs. Once you have identified these costs you can look at possible ways to reduce or eliminate them. A proper ROI analysis requires you to know these numbers.