What type of investment do you guess it would take to get a QUALITY card shop going? Details inside

1980scollector · January 16, 2011 7:11AM

The location is middle TN(Nashville)-

They want to have MORE than cards if at possible but cards is their expertise. (coins, video games?, any ideas to bring KIDS in the doors?)

You assume the owner has the knowledge/trustworthy and willing to work 40+ hours per week.

The owner is friendly and easy to get along with and loves kids/hobby etc.

The owner is capable of using ebay etc. to sell online as well.

Is it possible to be succesful at a brick and mortar card shop?

What do you think the investment would need to be to run a profitable business that brings in $35,000 a year to the owner?

Our guess-

$15,000(lease, showcases, shelving, sign, cash register, CC machine, start up costs etc.)

$12,000 first year for part time employee(s)

$10,000 advertising/promotion of the business over the first two years of business(woould this be better spent on inventory or a better location(800 extra per month first year?)

$35,000 salary for first year

$50,000 cash value not retail value(inventory including wax, memorabilia, etc.)

First year just build client base and take NO CASH/PRODUCT out of business.

=$122,000

Do you believe it can be done properly and succesful long term.

Dpeck100 · January 16, 2011 7:16AM

I don't think it is worth the risk to open any business with the hope of making $35,000 as your primary source of income.

It may very well be possible with the numbers you outlined but with that small of income you are better to do online only.

If the net income had the potential to be greater then $100,000 or $150,000 it may be worth the financial risk and time invested but not for 35k.

MULLINS5 · January 16, 2011 7:20AM

Most places want a contract signed for the lease, which makes those numbers you have a bit off. Considering you may have to put your name on a 3-5 year one -- puts you 40,000-100,000+ in the hole before you even open the door.

1980scollector · January 16, 2011 7:24AM

<< I don't think it is worth the risk to open any business with the hope of making $35,000 as your primary source of income.

It may very well be possible with the numbers you outlined but with that small of income you are better to do online only.

If the net income had the potential to be greater then $100,000 or $150,000 it may be worth the financial risk and time invested but not for 35k. >>

Would it matter if thye made over $125,00 a year from other areas( job of spouse, property manage about 30 rentals, part time realtor) and this was a dream to have a shop that made the hobby better in middle Tennessee?

HeritageAddict · January 16, 2011 7:29AM

I think in this economy you would be able to find enough landlords willing to do a one year lease. You also need to figure in utilities and insurance, not to mention figure in some loss for shoplifting. You will make your money when you buy, which may mean you need to take in everything from video games to cards, basically anything you can flip online for a profit. It won't be an easy task, very time consuming, and I certainly wouldn't consider hiring any part time help initially....if you want it to work you would need to put the hours in yourself.

Dpeck100 · January 16, 2011 7:37AM

If the 35k desired income is not the primary source of income which it appears to not be then perhaps it is.

If there is an over whelming desire to have a brick and morter store and you feel confident you can at least break even then give it a try.

With the decent amount of other income you have this gives you staying power and cash flow in the event your cost and profit targets are off.

There are regions in the country where a brick and morter store may do better and I know nothing about the potential demand in Tenn.

I personaly would not risk the financial investment and work 40 hours for 35k but it appears your motives reach beyone profit potential and are more lifestyle driven.

I think I would ramp up your online sales first and get a following, which you may already have done to help with the risk of finding many new walk in customers. I also would make sure you offer Magic cards and other non sport items to appeal to the masses.

Good luck either way.

1980scollector · January 16, 2011 7:41AM

<< If the 35k desired income is not the primary source of income which it appears to not be then perhaps it is.

If there is an over whelming desire to have a brick and morter store and you feel confident you can at least break even then give it a try.

With the decent amount of other income you have this gives you staying power and cash flow in the event your cost and profit targets are off.

There are regions in the country where a brick and morter store may do better and I know nothing about the potential demand in Tenn.

I personaly would not risk the financial investment and work 40 hours for 35k but it appears your motives reach beyone profit potential and are more lifestyle driven.

I think I would ramp up your online sales first and get a following, which you may already have done to help with the risk of finding many new walk in customers. I also would make sure you offer Magic cards and other non sport items to appeal to the masses.

Good luck either way. >>

great idea on the online sales being set up first to build a following-

thenavarro · January 16, 2011 8:23AM

<< Our guess-

$15,000(lease, showcases, shelving, sign, cash register, CC machine, start up costs etc.)

$12,000 first year for part time employee(s)

$10,000 advertising/promotion of the business over the first two years of business(woould this be better spent on inventory or a better location(800 extra per month first year?)

$35,000 salary for first year

$50,000 cash value not retail value(inventory including wax, memorabilia, etc.)

First year just build client base and take NO CASH/PRODUCT out of business.

=$122,000

Do you believe it can be done properly and succesful long term. >>

I think your figures might be substantially off in some areas:

On the startup costs of $15,000, if your property is going to be leased in a decent area with a decent size footprint, your lease itself is likely to exceed $15,000. You will also need liability insurance, property insurance, depending on your laws unemployment/workers comp insurance, employee fidelity bonds. You are going to have to pay fees for your merchant banking services as you are unlikely to do enough volume to have those waived. Heat, water, AC, etc. You will have to pay the employer match of taxes on your payroll so those automatically go up 7.65% for federal plus any state matches you have to make. I don't think $10,000 is going to do a whole heck of a lot of advertising for you over a 2 year period. You will be at a disadvantage in competing with online sellers, as most of your walk ins will have to pay sales tax, so you will need to discount your product from comparable online sales. You will probably need to have some promotions budget to bring in crowds (not just advertising). You are severely underestimating the costs of the buildout of your store. If you can't afford to pay cash or won't pay cash for the above, then you will need a line of credit which you are going to have to pay interest expense on. You will need to keep decent books and file all the proper forms and applicable taxes so if you can't do that yourself, you need to budget that in.

Also, $50,000 of inventory is not going to go too far.

Mike

scotgreb · January 16, 2011 8:24AM

Unless the owner's primary purpose is to create a lifestyle that transcends income then I think it's a very risky proposition -- unless he could leverage / monetize the "bricks and mortar" in a unique way. Otherwise, I believe the overhead would be too much to overcome.

There is a shop in my area (Balt/Wash) that does very well -- not (primarily) with cards but with autographs. He has built a great reputation with the many local sports teams: Redskins, Wizards, Caps, Ravens, Os by facilitating public / private signings -- many in his shop that draw in customers to cross sell. I also expect that the margins on autos are much higher. I believe you would need a similar niche to make it viable economically.

My 2c . . .

Scott

Edited for grammar and logic

jimrad · January 16, 2011 8:33AM

As a former owner of my own business(17 years distributing auto parts) I agree with Mike thenavarro, there will be lots of hidden costs you aren't expecting, and figure to put in AT LEAST 60+ hours a week or don't even think about it. Good luck

Dpeck100 · January 16, 2011 8:36AM

Mike you make some excellent points. I think there are two real issues at hand.

Number one, you need to understand the cost of running a business and how to manage the books as Mike outlined. Number two is the ability of online sellers with extremely low overhead and in most cases no tax levied to beat you on price. The card business is very price sensitive.

The example of the store with a large auto presence makes a great deal of sense. There may be some excellent margins on auto's and this is a great niche to cross sell.

The other huge variable is the performance of key rookie and early in their career athlete's. When Strasburg mania hit card shops were blowing through wax and were selling them way above their early order costs helping drive much higher profit margins and bring customers into their stores. You need a fresh crop of hot stars to drive your pack sales and you must turn your invetory relatively quickly.

These are huge hurdles to overcome.

1980scollector · January 16, 2011 8:39AM

<< 

<< Our guess-

$15,000(lease, showcases, shelving, sign, cash register, CC machine, start up costs etc.)

$12,000 first year for part time employee(s)

$10,000 advertising/promotion of the business over the first two years of business(woould this be better spent on inventory or a better location(800 extra per month first year?)

$35,000 salary for first year

$50,000 cash value not retail value(inventory including wax, memorabilia, etc.)

First year just build client base and take NO CASH/PRODUCT out of business.

=$122,000

Do you believe it can be done properly and succesful long term. >>

I think your figures might be substantially off in some areas:

On the startup costs of $15,000, if your property is going to be leased in a decent area with a decent size footprint, your lease itself is likely to exceed $15,000. You will also need liability insurance, property insurance, depending on your laws unemployment/workers comp insurance, employee fidelity bonds. You are going to have to pay fees for your merchant banking services as you are unlikely to do enough volume to have those waived. Heat, water, AC, etc. You will have to pay the employer match of taxes on your payroll so those automatically go up 7.65% for federal plus any state matches you have to make. I don't think $10,000 is going to do a whole heck of a lot of advertising for you over a 2 year period. You will be at a disadvantage in competing with online sellers, as most of your walk ins will have to pay sales tax, so you will need to discount your product from comparable online sales. You will probably need to have some promotions budget to bring in crowds (not just advertising). You are severely underestimating the costs of the buildout of your store. If you can't afford to pay cash or won't pay cash for the above, then you will need a line of credit which you are going to have to pay interest expense on. You will need to keep decent books and file all the proper forms and applicable taxes so if you can't do that yourself, you need to budget that in.

Also, $50,000 of inventory is not going to go too far.

Mike >>

What do you think would be the magic number to give you a good chance of success?

Thanks and really appreciate your advice and all others as well.

Dpeck100 · January 16, 2011 8:43AM

One other point that needs to be made.

If you are going to be a succesful card dealer, it is like being a drug dealer, don't use the product.

If you have a real interest in building your own collection it will not work. The best dealers move product and don't get emotional. Some of your best items to make money on if kept will hurt your business in a big way.

Dave at wcsports is one of the best card dealers online. He runs the business all online and is not concerned with building a large personal collection. I think this is the best model if you want to make a living at cards.

cadets68 · January 16, 2011 8:47AM

There ways to make it with a brick and mortar store. But that store must be combined with the internet and possibly shows.

That leaves me to question the 40 hours a week statement.

I have opened and still own a retail business (not cards). I do not work in the business and I still spend 10-20 hours a week.

Employees are expensive and they steal from you, keep them to a minimum.

The line seems to be low
$15,000(lease, showcases, shelving, sign, cash register, CC machine, start up costs etc.)

A triple net lease for 1000 square feet will probably be more than $1000 a month. If you can find some used equipment and a non lighted sign. Then maybe you will be close the $15k. Keep in mind that phone and utilities cost more for business than they do for personal.

What type of inventory will you stock?

I would only do a limited amount of wax that you can turn over quickly. Pretty much new stuff. Then you also will have to sell it cheap to compete with the online retailers. If you can get a core group of wax buyers and flip wax to them, you can make a few bucks.

Consider using some of your showcases for consignment. This helps you reduce inventory costs and still generate some income.

Offer to do group submissions. This way you can keep people coming in. Many collectors would grade cards but are unsure or do not have enough "good" cards to make it economical. You can get a few extra dollars here from these people.

Sell cards on the internet. Do the leg work for your customers, sell their cards for a piece of the sale price. Another way to make a couple extra bucks.

I managed a store for a few years during the late 80's and early 90's. It was easier then.

But sell things your customers want. Be the guy who stocks the supplies people want. Supplies are a nice profit center.

I would not put a ton of money into inventory, do not go and stock t-shirts and clothes. People do not buy that stuff at hobby stores. Maybe some limited things if the Titans win the Super Bowl, but nothing that ties up your capital.

There is nothing worse than walking into a card shop and having the owner be crabby, seems like it happens all too often.

I have tried to be a collector and a dealer at the same time. I found it to be impossible. You may have a different experience. But think this through before you open a store. Things will be different.

Turning over your inventory is the name a the game in retail.

Good Luck

Shawn

MULLINS5 · January 16, 2011 8:48AM

<< 

<< 

<< Our guess-

$15,000(lease, showcases, shelving, sign, cash register, CC machine, start up costs etc.)

$12,000 first year for part time employee(s)

$10,000 advertising/promotion of the business over the first two years of business(woould this be better spent on inventory or a better location(800 extra per month first year?)

$35,000 salary for first year

$50,000 cash value not retail value(inventory including wax, memorabilia, etc.)

First year just build client base and take NO CASH/PRODUCT out of business.

=$122,000

Do you believe it can be done properly and succesful long term. >>

I think your figures might be substantially off in some areas:

On the startup costs of $15,000, if your property is going to be leased in a decent area with a decent size footprint, your lease itself is likely to exceed $15,000. You will also need liability insurance, property insurance, depending on your laws unemployment/workers comp insurance, employee fidelity bonds. You are going to have to pay fees for your merchant banking services as you are unlikely to do enough volume to have those waived. Heat, water, AC, etc. You will have to pay the employer match of taxes on your payroll so those automatically go up 7.65% for federal plus any state matches you have to make. I don't think $10,000 is going to do a whole heck of a lot of advertising for you over a 2 year period. You will be at a disadvantage in competing with online sellers, as most of your walk ins will have to pay sales tax, so you will need to discount your product from comparable online sales. You will probably need to have some promotions budget to bring in crowds (not just advertising). You are severely underestimating the costs of the buildout of your store. If you can't afford to pay cash or won't pay cash for the above, then you will need a line of credit which you are going to have to pay interest expense on. You will need to keep decent books and file all the proper forms and applicable taxes so if you can't do that yourself, you need to budget that in.

Also, $50,000 of inventory is not going to go too far.

Mike >>

What do you think would be the magic number to give you a good chance of success?

Thanks and really appreciate your advice and all others as well. >>

Unlimited funds.

Beck6 · January 16, 2011 9:25AM

Where would your on-going inventory come from? It seems that most successful shops buy alot and use the bricks and mortar as a place to actually buy. Money is made selling online after they pick through the "gems" If you had a high traffic spot in an older neighborhood that would help, but you would need to have cash for purchases it seems.

diamondman · January 16, 2011 3:16PM

the biggest and to me the most important thing when opening a store is location location location, when I opened my store in 1987 , I was in between the junior high school & the high school and it worked out great.

definitely carry Magic cards, and any other hot product that comes down the line and try not to run out of the hot product. (even POGS or beanie babies)
plan on working 50-80 hours a week.
sexist & politically not correct, but if hiring part time hire a young pretty girl + they are more dependable as far as part time goes. jmho
get an alarm system immediately.
put up a video camera , even if it is a fake one will help deter shoplifting.
only put the cheap packs of cards out that the public can reach that way you don't lose high dollar packs to the sticky finger crowd.
try to get into just a 1 year lease to begin with.
try to have fun, have weekly or biweekly give a way drawings, to build a mailing list, so you can send a monthly newsletter of new products & even pre-sell products. pre-sells are always a winner, you make a profit on the product even if the product tanks and goes below factory cost the minute it becomes live.
after opening try and get direct with Topps & any other sport card manufacturers. (most want pics of your store inside & out).

buy cheap sell high. lock the door when a customer walks in and don't let them leave until they spent all their money.
+ the customer is always right even when you know their Not.

TheCARDKid · January 16, 2011 4:49PM

I think drawings, prizes are underrated. There must be something that kids and teens want in TN. Maybe they have 20% of the money for it, or 30%. But something desirable that they can't afford on their own.

-Excel at something. Almost every business I see....whether the local pizza parlor, dry cleaning, laundry, pest control, etc....they all do about the same thing as everyone else. None of them really excel at anything. Look at ebay sellers who impress you or who you buy from. Try to borrow what they do.

This weekend I was watching dozens of GI Joe auctions on ebay (night_vipers_joes). Very trust worthy seller. Very conserative. He's built up a pretty big following in a niche. People that throw something in a display case....then wonder why 50% of businesses go out of business in 3 or 4 years. Its not hard to figure out.

-I would have a different strategy for kids, age 8-15. Maybe throw in 20% more free. Have special discounts. Something that gives them more bang for the buck. If 3 out of 10 in the future remember that when they get more money, it'll pay back many fold. Most businesses (in general) are too greedy towards kids. Any wonder they complain that kids don't spend enough?

KbKards · January 17, 2011 1:56AM

The critical requirement for a card shop is obtaining inventory that money can be made on. If $35,000 a year is all they're looking to net, and they have the talent to obtain inventory, then it can most easily be obtained by not opening up a store. The large cost of opening a store, and constant expense of maintaining a store, forces owners to come up with a lot more inventory than they'll be capable of getting. Having no physical store expenses draining funds, and being able to sit at home behind a keyboard, means maximum money from sales can go right back into inventory and generating $35,000 a year.

WinPitcher · January 17, 2011 2:51AM

The one good thing about having a store is the items that come through the door.

Items that you can purchase for 50 cents on the dollar. You then can be called a slimy dealer.

IMO to open a store today one should have a decent inventory already, contacts to buy all the new stuff

that comes out and a decent location that has a lot of foot traffic. Rents, utilities, taxes, fees are gonna kill ya.

Plus you better make it to as many shows as you can. Me? I'd rather pay Ebay/PP the 10%

If you own a building where you can collect rent from upstairs tenants you might find it feasible.

fkw · January 17, 2011 5:36AM

You would first need to invest in a Time Machine, then set it for 1981. Fill the store with a variety of products including mucho supplies and card related books, magazines, and hobby papers. Not to mention a few expensive glass cases for display, and a couple large safes in back...

The reason Card Shops are basically extinct now and forever is the INTERNET. With the Internet you can sell to the Whole World 24/7/365. You can set up a great website for very little $$, with no overhead (no employees, rent, utilities, insurance, etc.)
work in your underwear, or while drinking a beer watching a ball game is a bonus too

I knew of a couple NY Area Shop Owners who dumped their shop ca.2000 when eBay took off, now they live in Florida, work anytime/anywhere they want.... ie. on the beach with a Laptop, and make 5X more $$ with far less stress.

With a Card Shop, you might be lucky to sell to a 50 mile radius..... but you will need to keep your eyes peeled for the 5 finger discount crowd, or the 2AM tweeker smash grab and run.

Bottom line, Card Shops are done......... same with the Video Store or Record Store.

wallst32 · January 17, 2011 6:05AM

Doesn't matter how much money you throw at it; B&M card shops have been failing left and right for the past 15-20 years. The main reasons are decling interest in collecting, unable to continuosly stock/replace in demand items, and with the overhead costs you cannot compete with larger dealers or internet dealers.
If you had unlimited resources you could acquire enough inventory to match some of the larger dealers and advertise the heck out of your business; but that's not realistic thinking. It's tough to catch someone with a first mover advantage; just look at Microsoft Bing and Google as a large corporate example.
If you are looking at this from a purely financial perspective, it's not a good choice. If you are looking at it as having fun and able to withstand a certain amout of loss than go for it.

thedutymon · January 17, 2011 6:45AM

Afternoon,

I did it with Comics for years, and..........I don't believe in this day and age without a considerable On Line Footprint that it is in any way viable. This next suggestion may be not everybody's cup of tea, but I can tell you from personal experience that this will Make Money by the Butt load.

Have a downstairs/seperate section with Porn...................Laugh if you like, but when I had my Comic shop the Porn in the sectioned off section outsold the Comics/Cards/T-Shirts/Misc...............5 to 1!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

YeeHah

Neil

Toro · January 17, 2011 7:10AM

lol, just dont allow smoking in your store and keep it somewhat organized. There's a "card" shop that, to my surprise is still open, but I'm sure that most of their money is made from the adult section that is sectioned off from the rest of the store by a bed sheet. haha, if you do it, listen to the above advice and keep it in a separate room. Upstairs or downstairs. Personally, I wouldn't do an adult it as its a different business and crown that you're catering too.

NickM · January 17, 2011 7:28AM

If you're going to do it, specialize in things that people are less likely to buy online. Large framed pieces, supplies, displays (e.g., ball cubes), books and magazines, anything with glass, etc. all can have substantial advantages for a B&M store.

Nick

thunderdan · January 17, 2011 7:39AM

Many on here believe Levi @ 707 makes gobs of money and is very rich. Why not ask him the secret to his business model.

ROCKDJRW · January 17, 2011 7:48AM

Didn't the internet kill people buying porn also?

sbfinley · January 17, 2011 9:35AM

I live in near Nashville, Hendersonville, and have considered doing the same for a few years now. Really the only competition in the region is "Cards are Fun" and last I heard they moved so I'm not even sure they are still open. But, the cost of the business and the capital needed just to open the doors are the not the biggest deterrents. Many people in the area are apathetic to cards and children now care more video games than anything else.

On the upside, there are several deep pocket collectors in the area. I know one guy in particular who drops several thousand dollars a month on modern for him and his son. He gets most of his product online, but if you can reel in a couple of big fish of the like you might to offset your costs easily.

Stone193 · January 17, 2011 9:53AM

There was a store for sale near my house and was listed in ebay - I can't remember what he was asking?

A good location? A lot of foot traffic and visibility for drivers by - and adequate parking....

Not gonna be cheap - even 1000 sq. ft. - in a great location is gonna be 2 to 3K per month.

The bank is gonna want a business plan with projections.

What about inventory? And selling new wax - not gonna be cheap.

Advertising? Internal and external marketing - one nice thing is that coupon advertising is not too bad - but ya gotta have a good "hook" to bring'm in. Part of the advertising would involve promotions....ya gotta have some good ones - like bring in your report card - if ya get all B's ya get this - A's ya get that....

Hidden costs - everything and anything one can think of - some places the renter is responsible for their own plumbing and air.

Opening - the C of O - certificate of occupancy - before ya get to open your doors ya have to have it fully inspected - and they "always" find something wrong.

Setting up the books - gonna need a bookkeeper - gonna be a proprietorship? Then you take on ALL of the liability - and if someone cracks their skull on your premises - they can go after the insurance and then your car!

Oh - yes - insurance - lots of it - not cheap.

The signage? A good sign is not cheap - quite a few thousand if lighted...

Setting up the store - even used display counters are gonna add up fast - along with all the other stuff ya need to display items in the store...
.
And - cards will not be enough - ya gotta have stuff like jerseys, hats, sports related items like cups, etc. - more inventory.

Gonna need some saturday promotions - like getting someone to come and do some signings - if there's a minor league BB team nearby? Would be great.

Help? No one will work for less than 8 bucks per anymore - and if you're not careful? They'll either steal ya blind or give away the store...

Keep in mind that no one will care as much as you do about your business - workers - as a rule - collect a paycheck and are happy doing that.

If this hasn't slowed one down? Then they're ready to start on the road to success!

And, BTW - I'm just getting started - there's loads more in the world of business! I'm glad I'm close to full retirement!

vtbub · January 17, 2011 11:38AM

<< 

What do you think the investment would need to be to run a profitable business that brings in $35,000 a year to the owner?

Our guess-

$15,000(lease, showcases, shelving, sign, cash register, CC machine, start up costs etc.)

$12,000 first year for part time employee(s)

$10,000 advertising/promotion of the business over the first two years of business(woould this be better spent on inventory or a better location(800 extra per month first year?)

$35,000 salary for first year

$50,000 cash value not retail value(inventory including wax, memorabilia, etc.)

First year just build client base and take NO CASH/PRODUCT out of business.

=$122,000

Do you believe it can be done properly and succesful long term. >>

No, not even close to that price.

I work at a sports store and if we just sold cards, we would have closed years ago. There's just no money in the card market unless you have sme high dollar loyal customers that are willing to plop down big bucks for wax on a regular basis. I'm talking a thousand a pop once every other week.

Let's get one thing straight, you aren't going to profit $35,000 that first year. You will be lucky to make minimum wage, if that, as for every dollar you get in sales, sixty cents of that will be the cost of the product. The markup on cards is really, really bad. My store sells jersey's, tee shirts, stickers, garbage cans, and the rest. Our worst margin is on new wax product. Things run really hot or cold. You can get great after release prices on some things, like Topps Chrome baseball this year. No demand after the initial huge print run as Strausberg got hurt. The other side was this years Bowman Jumbo boxes, at one point we were asking $700 a box and it was costing us over $550 to get it. We had a couple customers who bought, then came Strausberg's injury and the market came back to earth while we had four boxes of the stuff tied up.

You an have a nice full case of auto's, jersey cards, rookie cards, vintage cards, and the like and appreciate them for a long time as they'll stay and never sell for the book prices on the cards them selves. Dollar boxes do well as sometimes you get a good deal and most times, you are glad to get rid of product. Supplies do bring a good margin, if you find customers who want the albums and the sheets.

Lets not forget that you will have a sales tax while Dave and Adam do not. They charge for shipping and buy in bulk numbers so big that your head will spin. Topps allots your store a certain amount. We get a case of regular hobby boxes, for Series 1 that 12 36 count boxes with 10 cards per pack. A case of Jumbos, 10 packs of 50 cards per box. Sell out of that? Depends on what other dealers will sell to you for. That is if you can get direct vendor deals with Topps, Upper Deck, and Pannini. By the way chances are you will be restricted from selling that product online so they can protect their bigger volume accounts. We tried a web store and could not do any Upper Deck online, it was part of the vendor agreement.

So, lets figure 25,000 minimum for rent. You will need a business phone, internet, electricity, storage, water, vacuum, credit card machine, register, shelving, permits, whatever renevations the town/city and landlord want before you can open. That's another $5,000 right there if you are lucky. So, $30,000 before you have one sale. Inventory? After you get vendor agreements with the card companies and whomever else, you have to purchase a minimum order. How much depends on the vendor as they don't ship one box at a time. There are dealers that will do that, but that swings like the stock market. If we know something will sell, we'll pay market price anywhere from well below original cost for a dud issue to $550 for that box of Bowman Jumbos. In my four years there, it was the first time I was told not to unseal a box, we sold them whole.

Employees? Hehe. When you start doing $500 a day, you can afford employees on margins that small. They cost money, salary and taxes and what limited benefits are required. First six months, you are the employee, hope you have saved your living expenses or are married to someone who has a paying job because that store isn't giving you a $35,000 salary in year one.

So, with inventory, you are down $80-100,000 total before you open your doors. That includes the expenses of rent and such and your legal fees and whatever else pipped up along the way such as new painting or carpets or heat or whatever. Hopefully, some of that can be financed, but it still needs to be paid back with interest and for just cards, that makes the margin tighter.

You open. My boss refuses to pay for advertising. It sounds stupid, but I understand why. It doesn't work. We did a Val-pak coupon buy for our city. 20,000 pieces for our store, I think for 20% off tee shirts, we got all of three redeemed. Study the market and try to get as much bang for your little buck as you can, but spend very little at first as you really need a good return to pay for advertising. Facebook and Twitter are your friends, use them.

If you go a year and clear just one dollar, you have made it past 90% of other business do their first yeat year. Also remember that 3% of everything you sell with a credit card goes directly to the bank as fees and for god sakes, never take a check. $150 is a hefty fee fora bounced check and that's the going business rate.

Honestly, start small. Do flea markets and such. Save the profits and see where you are in a year. We survive because of tee shirts and jersey's, not because of cards. We cater to tourists and to out-of-market sports fans as up here the chain stores only sell Boston teams. The Yankees, Cowboys, Canadiens and Steelers make us a ton of money, but on stickers and jersey's, not on cards.

How much money can you afford to lose? That's how much money you have to start a business from scratch.

WinPitcher · January 17, 2011 12:40PM

<< for god sakes, never take a check. $150 is a hefty fee fora bounced check and that's the going business rate. >>

Great post but you lost me on this one.

vtbub · January 17, 2011 1:08PM

<< 

<< for god sakes, never take a check. $150 is a hefty fee fora bounced check and that's the going business rate. >>

Great post but you lost me on this one. >>

Rate we pay for a returned check if the bank refuses to cash it.

KbKards · January 18, 2011 12:23AM

I'd open a bank then and offer free checking.

CDsNuts · January 18, 2011 12:49AM

$150k would probably get the doors open and keep them open for a year, but it wouldn't go much further. Realistically you're probably looking in the $250k-$300k total investment to start a thriving card business, and even then you would need to rely heavily on internet sales. In fact, the goal of the store front should be to turn a minimal profit while the internet becomes your primary income. The benefit of the storefront is you get people in selling their collections, so if you can buy one or two a year that you make a killing on it's worth the trouble.

Things that weren't considered in the original post:

- You're gonna need cash on hand to buy, probably 50k or so would be wise. There's a reason that stores like BBCE and the guys from Pawn Stars make a living, and it's because they have buying power no matter how big the thing that walks in their shop is. Speaking monetarily, buying collections is the biggest (and possibly only) benefit of having a sportscard storefront.

- You're gonna need to be able to weather 2-3 years of not being profitable, so having $100k in the bank is a necessity. That 50k inventory you're talking about won't turn over in a full year, or maybe even 2.

- You're going to need to be more educated. Need to know vintage AND modern inside and out, grading practices, role playing games, etc.... If a collection of Magic The Gathering or Garbage Pail Kids walked in his door would he know what to pay for it? What about a stack of Sports Illustrated's or a collection of ticket stubs? Or a World Series Ring?

- Autographs- An absolute must in this day an age for retail. The only successful card shops in my area rely heavily on autos and in person signings as 70-80% of their business. People are far more apt to buy a Tom Brady auto'd jersey for their brother for Xmas than they are a Brady RC that they know nothing about.

Simply put, opening a card shop that will last is more of an undertaking than people make it out to be, which is why there are so few out there these days.

smtjoy · January 18, 2011 2:46AM

Agree with pretty much with FKW and CDNuts post.

I do not think you could pull it off with only 50k in inventory. It looks like you need to make at least 60k the first year and with only 50k in inventory even if you had unreal margin like 50%you still would need to fully turn over your inventory 2.25 times in a year. Try to do this on ebay first its very hard. I flipped over 10k this year on ebay and was happy with my 30% margin but that still means I only made 3k profit, you would need 20 times that much, ouch.

If I was you I would start by building up your inventory online as some have said, start buying lots from the auction houses and ebay and see how much profit you can flip them for, pour your profits into buying more cards and building up a customer following. You might even offer a consignment service online to attract more people and make more cash for inventory. Once I had my online business built up enough and a large inventory (100k+ with 50k reserves to buy) then I would consider opening to a store.

I have to say I would not open a store, I just think you can do tons better online without the overhead and risk. But if thats something that would make you happy and a life goal you have always had then I can understand the desire to do so, in which case go for it.

storm888 · January 18, 2011 4:04AM

I think almost everybody should own their own biznez
and work for themselves; at least part time.

I never purposely discourage folks from "trying things."

BUT, as outlined by the OP, there is NO chance for the
"plan" to succeed.

..........

Depression economies make MANY millionaires, but few
come out of new retailing enterprises.

"Be the landlord, not the tenant," is an old truism AND it
has - in my lifetime - never been more true than it is today.

Paying rent is the fatal flaw in the card shop endeavor.

.....................

"Never buy yourself a job."

Capital is the MOST valuable component in ANY biznez effort.
Once you have spent yours on a scheme to "work 40-hours
and collect $35K a year in salary," you will have lost both the
money and the job.

ALL of my profitable retailing efforts have involved 70-hours+
AND more headaches and WORK than $35K could possibly
compensate for.

.........................

If you wanna "spread the joy of cards" in Nashville, find a
vacant, freestanding, single-story building; the bigger the
better. Pitch the owner/agent with a SHARED RENT scheme,
until you find one that understands the concept AND is not
worried about making mortgage payments on the property.

Once you control the building, run ads to attract folks that
wanna sell their collectibles and other items in a "flea mart"
atmosphere. The rent they pay for their tiny spaces will more
than cover your expenses AND you can open one or more
spaces in the project to sell your own merch.

The most successful such projects have, historically, only
operated on Fri/Sat/Sun; I suppose that a 7-day deal would
work, but the time involved in managing it would require
lots of help and reduce your own ability to work your own
card biznez.

As the "depression" gets worse, more and more folks will
wanna try their hands at selling their stuff to a public that
will be looking for "good deals." Going with this flow - NOT
bucking it - will lead to profits.

.............

On a smaller scale, you can "spread the joy of cards" by
using Craig'sList for large amounts of merch AND you can
run "Buying Cards" ads in all kinds of local places.

(Nashville is not an easy place to set-up temporary spots
for buying collectibles. The cops and the pols are ALL mobbed
up with existing buyers and there are substantial roadblocks
to outsiders/newcomers. These can largely be subverted by
operating a "flea mart," but there will still be some regs to
deal with. Including "local boys" in your tenant mix - at low
or free rents - will often keep the cop-trouble to a minimum.)

......................

EBAY and PayPal is the safe/sure way to go for selling collectibles.

Buying canned meat, beans, rice, and a few metals will likely be
a MUCH better expenditure of capital resources than trying to
open a B&M retail card shop.

............

Stone193 · January 18, 2011 10:01AM

When my dad wanted to be a good auctioneer - he went to work for practically free with the best in the business - for his particular field.

My point - if I really wanted to open a shop - I'd go to work for the biggest and best shop in the city - even if I had to move - learn the trade from sweeping out the shop, cleaning the toilets to buying and selling/grading/biz in and outs etc.

Keep my eyes open 24/7 - learn everything I can - take notes - be acquainted with contacts - and then move on.

What type of investment do you guess it would take to get a QUALITY card shop going? Details inside

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