Scarcity is Everything

I was shocked to realize I didn’t understand this concept: scarcity.

All this time, I thought it was just another word for rarity. In fact: I used “scarcity” and “rarity” interchangeably in much of my writing.

But, not only do these words have different meanings: understanding them is essential to understanding collectibles markets.

Here’s what I’ve learned (and, if you already know this; bear with me):

Rarity is defined by how few copies of an item were originally produced or are remaining in existence today. (Rarity relates to the actual, objective quantity available.)

Scarcity, meanwhile, is defined by how difficult an item is to acquire, because demand exceeds the available supply. (Scarcity is a function of both an items rarity and its demand.)

In pop culture collectibles markets like Pokémon, scarcity is everything.

Scarcity is the reason the latest chase card from a hot new set is so expensive after prerelease: nearly everyone in the market wants to add the card to their collection, but the fewest examples have been found to supply the market. (Demand is high and supply is low.)

It’s the reason sealed Pokémon booster boxes appreciate in value after they go out of print: nostalgia for the aging set grows (more demand), while at the same time, less and less of the product remains unopened (low supply).

And, it’s the reason cards like a 1st Edition Base Set Charizard in PSA 10 condition can fetch hundreds of thousands of dollars: an iconic card that nearly everyone would love to own, with a pop report that shows a mere 124 PSA 10 graded examples. Talk about scarce!

In the end, the price of any collectible is driven by its scarcity. NOT just its rarity.

This is important because the mantra of “older, rarer, minter, better” simply doesn’t hold up when you understand scarcity. This perspective on the “fundamentals” of a trading cards potential value represents nothing more than its rarity.

And although a truly rare, and therefore difficult to acquire card, can become extremely valuable…

There are many rare cards that simply have no demand (and therefore no true scarcity), resulting in surprisingly low prices.

All while everyone’s favorite Moonbreon, now with more than 24,000 PSA graded examples (and more than 17,000 of them earning a PSA 10 grade), achieves as value of more than $2,800 USD in a PSA 10.

The Moonbreon is scarce due to incredible demand.

But, this also means that scarcity is prone to fluctuation: demand fickle, and bound to change as cultural and historical trends evolve over time.

For now, Umbreon has emerged as one of the top (if not THE top) chase Pokémon. But this cultural bias could change, and the resulting drop in demand would bring prices down with it.

This is why it’s so important to understand the difference between rarity and scarcity, and why I’m shocked it took me this long.

As usual,

Thank you so much for reading the TCG Buyers Club newsletter. My name’s Grey, I buy cardboard, and I’m on a mission to make collecting and investing in Pokémon simple.

Cheers 🍻