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Essay on The Sports Card And Memorabilia Market
| Date: |
02-18-01 1:31pm |
| Subject: |
Miscellaneous |
| Word Count: |
821 |
| Page Count: |
3.28 |
The sports card and memorabilia market
The sports card and memorabilia market is as lucrative as ever in our culture today. The number of sports card and memorabilia stores, however, has never recovered since the backlash of the late 1980’s and early 1990’s. My business plan is to open ED’S SPORTS CARD & MEMORABILIA WORLD in a small (400 square foot) location in Islip, New York. The store-front will cost $400 per month.
The sports card market has a year-round appeal but also has fluctuations by month. The height of business is found in November and December (holiday time) as well as in March and April (when the baseball season gets underway). An advantage to this business is the extremely low amount of advertising money needed. By accessing the Internet (through a $2500 computer and $20 per month America OnLine service), a card and memorabilia store can have virtually all the advertising they can put on-line at no extra cost. A webpage (through a provider like GeoCities or Angelfire) is free and posting in Usenet groups or on AOL’s "Card Collector’s Corner" is also free. All you have to pay is the monthly service charge.
An advantage of using the Internet for this business is the profit margin. It is not uncommon to find cards on the Internet selling for 10% to 40% of it’s actual value (i.e. a $100 card can be found for $10 to $40), or "pre-order" buys on upcoming products to be way below the market price (i.e. a $67 pre-order on a box that will sell for $110 wholesale). This enables the business owner to turn over inventory at a price that the consumer finds reasonable (under it’s "value") and the businessman finds profitable.
Start-up costs are pretty low for this business also. I figured that I can start a business for under $8,000 and maintain it for about $1,500 a month. This includes showcases, the previously mentioned computer, inventory, rent, advertising, supplies, and utilities. The average daily expense for maintaining the store is under $50 a day. What I have not figured into the amount to start-up this business is a sign outside the store. Many baseball card shop owners have told me that their sign was free! This was done by contacting one of the major card companies (Topps, Fleer, Upper Deck, or Pinnacle) and placing their corporate logo on the sign.
I have been ivolved in this industry as a collector since 1985. I have been a part-time dealer since 1995. An average month as a part-time dealer (8 card shows and on-line transactions throughout the month), results in about $2,000 worth of sales and $420 worth of expenses (8 card shows times $50 per show, plus $20 for America OnLine). If my store doubled this pace (which would be still be slow for a full-time card store), it would take a little over four months to break even and it would make over $23,000 in profit in it’s first year. The chart attached shows how this was figured.
This business may not seem very profitable according to the figures I have provided, but these are low-end estimates. Many companies like L.J. Sands, Co. provide baseball card portfolios (like stock portfolios) for high-dollar investors. This involves finding cards of Hall of Fame caliber players that are undervalued and waiting for them to rise in value. A good example of this today is Ken Griffey Jr of the Seattle Mariners. His rookie card (1989 Upper Deck, card number 1) is valued at $70.00, in the past four years it has never been valued under $65.00, but as of April 25th he has 13 homeruns and is on pace to break Roger Maris’ single-season record (61 in 1961). If this happens, the Griffey Jr card will soar to a new value. This will not be unprecedented. When Jose Canseco became the first player to hit 40 homeruns and steal 40 stolen bases in one season, his 1986 Donruss rookie card soared from $7 to $150, currently the card is available at $12. Two years ago, whe!
n Cal Ripken Jr broke Lou Gehrig’s "Ironman" streak of 2,130 consecutive games his rookie card (1982 Topps Traded) went from $150 to $300. It has since cooled down to $250. A lot of money stands to be made by investing in Griffey’s cards now (when I can find them at $48 on the Internet) and selling them when and if he breaks Maris’ record. Should he fail to accomplish that (as he has in the few times he has flirted with the record, mainly because of injuries) the card is still a good investment at $48.
MONTH EXPENSES (YTD) SALES (YTD) PROFIT (YTD)
June 1997 $8,920 $4,000 -$4,920
July 1997 $11,240 $8,000 -$3,240
August 1997 $12,560 $12,000 -$560
September 1997 $13,880 $16,000 +$2,120
October 1997 $15,200 $20,000 +$4,800
November 1997 $16,620 $24,000 +$7,380
December 1997 $18,040 $28,000 +$9,960
January 1998 $19,360 $32,000 +$12,640
February 1998 $20,680 $36,000 +$15,320
March 1998 $22,100 $40,000 +$17,900
April 1998 $23,520 $44,000 +$20,480
May 1998 $24,840 $48,000 +$23,160
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