How do dealers buy their cases?

Crusader765

Something I've always wondered. I assume dealers make at least a small profit on retail sealed boxes. But where do they order cases from and what savings do they get? Strictly from the card companies? Because on ebay for instance, cases often sell for more than if you won auctions for individual boxes at a decent close. A site like

http://www.charmcitycards.com

sells cases for often better prices than ebay if you take into account their free shipping.

Any common Joe can start a card business just by looking for good deals on single cards on ebay, and then selling them for typical retail card shop prices closer to the book value. You can sort of do this with retail sealed boxes too, but not cases it seems.

Gemmy10

I have heard that Wholesale is often 1/2 Retail. So if a Dealer is selling a case for $500 he probably paid $250, more if he didn't go direct with the card company.

Stone193

<< <i>I have heard that Wholesale is often 1/2 Retail. So if a Dealer is selling a case for $500 he probably paid $250, more if he didn't go direct with the card company. >>


Gemmy
I don't think dealers can sell product at that rate - the profit margin is lower than that I believe.

your friend
Mike

easttexascardsandgames

The profit margin was not that much about 10 years ago.

helionaut

In many retail sectors, markup is 40-100% wholesale cost. Obviously, it depends on what exactly the item is. A car dealer selling a car for $25,000 sticker probably paid $17-18K, and might deal down to $21-22K or less. A comic book dealer might pay $1.00-1.25 for new books with a cover price of $2.50. Card dealers buy cases directly from the manufacturer in most cases. They have direct accounts. There are also wholesale distributors who are in business to sell to card dealers. They buy large quantities from the manufacturer and then resell with some markup in between wholesale and retail. This also allows dealers to get cases at less than retail price without "going direct" which requires some minimum orders, I believe. This was a big complaint some years ago, and I am not sure if it's gone away. You couldn't just go to Upper Deck and only order 20 cases of SP Authentic Football and nothing else. They had a pyramid plan where for every 5 cases of, say, Collector's Choice you ordered, you could order 3 cases of regular Upper Deck. For every 6 cases of that, you could order 1 case of SP. I have to think something similar is still in place, otherwise no one would order a lot of the stuff that gets put out. With cards and Ebay, a lot of times you see dealers blowing out cheap stuff that they were sort of forced to buy just to recoup costs and move on. Or else they are in the cycle of cash-deprivation until the real big product comes out. This is one reason why pre-sell prices are usually relatively low. Card makers want some amount of the money up front, maybe 50% or more, and it has to be in as much as 90 days before the product comes out. With an expensive product like SP, dealers might have to front $400 or more per case that they won't get back for months. Since most dealers are undercapitalized, they have to pre-sell what they order so they can pay for it in the first place. The burden of waiting 3 months for your cards is shifted to you, and hopefully the dealer hasn't skedaddled with your money in the meantime (as has happened twice to me, though I did recover it). A lot of times the pre-sell cycle guys just get so far behind that they can't pay for their orders so you either dont' get the product or you don't get anything including a refund.

The question for any would-be businessman is getting a reliable supply of good stuff to sell. I met a guy a couple weeks ago who told me the story of a friend of his. This friend was a guitarist and was tired of paying $6 or so for a set of strings. There are all kinds of brands of guitar strings, but it turns out that there are only 5 or 6 actual manufacturers. He struck a deal to buy strings of all gauges in bulk, and then sold them in bulk. Guitarists could buy from his website for about 15% the cost of the music store. With a profit of just a few cents per string, but selling a couple hundred strings at a time, and a good website, it wasn't long before he was raking in the dough. Then he sold the company for millions. Now most music stores sell strings with deals like "Buy 1 set get 5 sets free" so the profit margin is gone there. With cards, the direct route has already been mined out, if it ever really existed in the market as it does today. I imagine up through the 70s you could go to Topps and ask to buy a case of cards, or at least a candy distributor or something. Now, as they aren't just cheap little pieces of paper for kids, ordering direct for the consumer/weekend warrior dealer is impossible. It would be sweet, but etopps the thepit is as close as we're likely to get for a while. Even if you make a friend of the Target manager, you wouldn't be likely to get a case at any kind of sufficient discount. Maybe if you marry him.

ctsoxfan

<< <i>In many retail sectors, markup is 40-100% wholesale cost. Obviously, it depends on what exactly the item is. A car dealer selling a car for $25,000 sticker probably paid $17-18K, and might deal down to $21-22K or less. >>



I liked your post Helio - but you are way off base on this example. The markup on an auto in that price range is, in most cases, far less than you imply.