Under what, if any, circumstances, could a new dealer make a very good living?

Bosox1976

I've been asked by a recently unemployed collector friend - who has never even used ebay, nor really ever sold any of his collection - if I thought it possible to make an equivalent salary in the hobby (as a full-time dealer). He made about a hundred grand per year.

I told him that the buy side seemed like it would be harder and more time consuming than the sell side, and that IMHO a 10% profit margin was the best one could hope for, unless already sitting on an unending pile of gold.

Therefore, to buy on ebay and then flip/sell on ebay or at shows, $1,000,000 must be purchased wisely, remarketed, and sold at a 10% margin after fees/card show costs/advertising etc. per year to recompense him at an equivalent salary. Buying a million dollars of underpriced inventory seems like the difficult part, while the sales grind is likely just that - a grind - 20,000 auctions at about $50 each, or 10,000 at $100 etc.

Also, it would seem to be mathematically impossible to do 20,000 auctions (or so) plus buy, bookkeep, bank, and strategize in anything close to a 2000-hour workyear.

Bigger buys & sells would be the logical reaction, but even 1,000 $1,000 buys and sells is no easy task (2 per hour for an entire year??). Seems this is why the hobby/industry is so fragmented, and no 300 pound gorrillas have emerged.

mikeschmidt

I think it would be tough to routinely make six figures in this hobby. Especially if you are new to it from a dealer's perspective - you do not have a reputation, you do not have inroads to the market. You can flip a lot of things for more than 10% - especially if you can put time and energy into making it work. But it certainly would not be an easy business - especially if you consider the need/cost of attending shows, etc.

There are many available models for buying/selling - but, again, I don't think any are guaranteed winners.

A) Be an auctioneer. The first-rate auction circuit is pretty crowded. And the second-rate people/houses are pretty competitive rate-wise. Too much money chasing too few good cards right now.

Crack-and-sell. On new issues, you have to be very, very quick to make this work. On modern - you have to know your markets wisely, as well as have a pipeline where to buy stuff.

C) Buy and flip on ebay. Very tough to make significant margins. Unless you just accumulate inventory that happens to increase in value.

If he truly loves the hobby - perhaps he could do okay in it. But I think he should try it for a week or two first to see if he enjoys it. I love this hobby a lot - but if I started putting 60-80 hours a week into it, I would be fried on it pretty quickly, I think.

cameocards

You are on the right track, but it's the $10,000-$100000 deals that make that kind of $$$. He can buy and flip over and over. He can also buy and flip keeping the best stuff for his inventory. With a large enough bankroll, he can buy and sell off of a web page, but that takes a VERY large amount of $$$. It takes time to develop a network to the buy and sell work. [15 years and I'm still working toward it]. He needs a hefty bankroll and shrewdness. Oh, and one other thing, 2000 hours a year??!! I would consider that part time or semi retired. I have averaged about 90 hours a week for each of the last 30 years. 100+ hour work weeks are common. That is probably the biggest adjustment to make.

WC

Collecting as a hobby is fun - as a dealer - especially someone making the switch from "Collector" to "Dealer" would be difficult.

I think most Collectors (myselft included) underestimate the amount of knowledge that a dealer accumulates over time. The learning curve is pretty steep - and the lessons learned can be expensive. You have to know what to buy and at what price. Like most resale industries - your money is made on the purchase - not the sale - and it takes a keen eye (and a lot of luck) to beat the knowledgeable people out there that are doing this as a profession.

There is a lot of money to be made in High-Grade Vintage - 1960s and earlier - the the dollars quickly drop off when you start dealing with newer cards and lower grade stuff.



A good suggestion would be to try it out for a while - (selling and reselling) - as a hobby - then decide if this is the profession he wants to pursue.

This was an idea I flirted with about 3 years ago. I didn't have to replace 100k/yr - but I had a reasonable goal. I started with a decent personal collection of vintage baseball cards up through 1981. I quickly realized that I only had a few truly "valuable" cards - I definately had an owner's bias when grading my own cards - submitting to PSA can be humbling!

I have sold my collection - didn't make as much as I originally anticipated - but I'm still married - and my cost basis was next to nothing because I did most of my collecting/trading in the late 70's.

My dad still has a '55 topps baseball complete set (mid-grade) that he bought in 1980 for $300. That may be my last Baseball card project - but I'll have to wait....

WC

....one other thing.....read this - and other - PSA message boards....

I have learned a tremendous amount from a bunch of these guys - even though I rarely post.

Stingray

How much do you thinks someone like 4SC or DSL is pulling in a year? Not that they are a one person operation, but at the volume they are submitting and then putting it up on ebay is staggering. Just wondering.


Stingray

matrixbend247

buy a small car wash or a medium size laundry with the same million. hire a good manager, stop in the business every once in awhile and make at least double the money you would with dealing cards. save a couple of buck buy the second, third and fourth businesses, make a million a year. matrix

VMFA115

I am really curious about DSC's business plan; they have such a fixed, finite operation--eBay only with no side sales that I know of and always a source of top cards. From a purly business stand point it must be a very fixed cost operation right down to the very standardized UPS shipping system. I'm not sure it would be a business I would enjoy (too much business, not enough collecting) but a plan for profit it must be.
Dave C.

TheCARDKid

A large bankroll is a big advantage in this industry. If you were starting with $50,000 to $100,000, you could make more than 10%.

The number of card shops will continue to decrease in the future. You could go to the ones just hanging on and cut some very interesting deals. That could be a great niche.

Great businesses are built around solving a problem/relieving pain. What's the pain, the hassle, and the inconvenience that you can solve?

Unlike alot of businesses, you don't need alot of capital to get started. Try low dollar deals for awhile. Analyze the industry and see what the strengths and weaknesses are of the key players.

StarWarsFan2003

I know this is a very small picture of the enitire sports/non-sports card industry, but I have noticed that year in and year out, most money gains have been with Bowman Chrome and Bowman Chrome Draft Picks. Im a fairly active member on the Beckett boards, and they are simply insane about the product. Ive been privy to $50,000 case breaks on this stuff, or approx $100,000 for BC and BCDP. The largest amount of money is gained by the RC lots, and the larger the lots the better the end price. I'm not sure If any members here are familiar with Mr.Mem on Ebay, but following his example is a perfect way of succeeding in this industry on Ebay. Simple stuff, buy tons of rookie based new product, crack it, sort it in lots and sell. Mr.Mems auctions, as I have been buying from him for 2 years now, tends to sell for 15-40% more than what a small time, or casual Ebayer's exact same card would sell for. Find yourself a reliable distributor that you can buy in bulk from, and spend $25-$50 thousand on 4-6 specific products a year (i'm only talking about baseball, as that's all I collect), and that should give you about 10-20% profit margin, and that's without going to trade shows. If I had the $50,000 or so to start a business like this I would. You just need a good 6 months of selling on Ebay in this fashion, and trust me, you'll have a very loyal following. And a must , IMHO, is posting on message boards like this. You would be surprised the amount of money that can be made in doing MB deals, especially on new stuff, just by listing your case breaks. But, be forewarned, that you will be working 15-18 hour days, especially If your working alone.

eyebone

The recent devaluation of the American greenback versus its Canadian counterpart makes my suggestion more difficult to execute, but nonetheless......

Come to large Canadian card shows like the Toronto Sports Card Expo and hang out the "buying" shingle. Typically we Canucks simply see Beckett or SMR prices as being applicable in our currency (ie. a person sells a card to a "buyer" for $300 CDN--not $300 US--because CDN is our currency). Only the saavy seller, or the seller with top quality cards, looks for US $. Therefore, one could buy cards at a discounted rate when the exchange is factored in.

I have a friend who would generally spend 5-10K CDN at each semi-annual Toronto show--and he was not set-up at a "buying" booth, but simply a guy walking the floor and buying off dealers!! He would then flip the cards on ebay, consistently doubling his money. He figured that even if the cards sold on the bay for the same price as he purchased them that he would realize a 50% profit (this was back three and four years ago when the US dollar got you 1.50 to 1.60 CDN).

He is very knowledgeable and astute, so it was not uncommon for him to carry out the following example: buy a card from a weekend warrior for $500 CDN and then sell it on ebay for $700 US. Add in say a 50% rate of exchange on the currency difference and, voila, a nice profit of $550 CDN (or over 100%) on the card.

Admittedly this is difficult to pull off now that the exchange is about 1.15, but in the future this opportunity is likely to resurface.

I hope I have explained this clearly.

Eyebone

Bosox1976

Great stuff all - love the canadian currency arbitrage angle, Eyebone - even a 15% spread on the exchange rate is huge. Getting my amigo to read these boards is another good idea. We can always use more Red Sox guys here - whether gainfully employed or not.

As far as the 4SC angle goes - does anyone know how low PSA will go on pricing for Bulk Submissions or monster repeat customers?

eyebone

Mike:

BTW, I haven't had a chance to get that $ off this week--busy and all that--but I will shortly. Thanks and LMK when it arrives, if you remember. Merry Christmas.

David (eyebone)

CDC4

If you're going to do shows it is very tough as you would be put in a poor area for exposure. Which means you'll get the left overs of the small amount of quality stuff walking in. Shows are going to be tougher with more and more stuff making it to eBay instead. Also it's not cheap by the time you travel, spend money on hotel rooms, show fees and other expenses.

Auctions wouldn't be as hard in terms of listing such quantity. If you can find a local kid who is knowledgable about products you could get him to list auctions as an afternoon job. I've been told SimClassicSports does that on eBay.

It also depends on what your friend wants to sell. Vintage or modern. If he wants to sell wax or single cards.

But the barriers to entry are tough.

Fletch1750

I would be willing to bet most of the larger PSA dealers make well over 100K per year. The guys who play the crack out upgrade game make more than 10% on average