Card Interest Down? Not at the National.

[raulus]

Originally Posted by theshowandme

That’s ~40% profit margin

That is incredible at scale

Not so sure that it’s really this rich.

This analysis ignores the cost to ship back and forth from the grader. Also ignores selling costs, and the cost of capital or time value of money while your cash is tied up waiting for the piece to get graded, and then waiting for it to sell once it’s graded. Throw in some overhead for salaries to pay your people to manage all this stuff, a little rent to store everything and have a site for your people to work, some insurance to cover your operations, and it gets a lot more tight.

On a good day it’s more like a 15-20% profit margin. On a bad day it could be less than 10%. Still not nothing. But probably not nearly as fat as it might seem at first blush.

Of course, if the market is rising, particularly if it’s rising aggressively, then the time spent waiting for grading and for the piece to sell works to make the math a whole lot better. But as much as it pains us to admit it, cardboard doesn’t always go up, and go up bigly.

[Exhibitman]

That video is crazy. Looks like the 2022 Burbank show, which was so packed they weren’t letting dealers back inside.

Modern card speculation is the poor man’s meme stock.

[theshowandme]

Originally Posted by Exhibitman

That video is crazy. Looks like the 2022 Burbank show, which was so packed they weren’t letting dealers back inside.

Modern card speculation is the poor man’s meme stock.

I was with several people and we kept saying how crazy it was

Cards were moving and a lot of cash was being exchanged

And just imagine the original plan was for that thing to run 3-4 more times during the week!

[notfast]

I love those $5-20 cards that sell for $50 after sending to sgc.

Helps cover cost of the cards I want to keep.

[jimtigers65]

I was very surprised to see the amount of people going through ten cent monster boxes at the National.

[Exhibitman]

Don, it looks really good from the outside but the numbers are not that good in reality, assuming one operates above-board--not cheating on income taxes, reporting sales for sales taxes, etc. Cost of inventory, cost of sales, sales taxes, and income taxes all take quite a bite out of my gross profit. I know a lot of dealers who are "doing great!" but have only a vague grasp of their actual net profit. I also would not assume appreciation of inventory beyond the rate of inflation. Overall trends can be deceiving. Lots of "-" signs over the last year. Sitting on inventory that is declining in value really sucks; I try to cash out my run of the mill purchases quickly so I don't get stuck.

Jim, I totally get the dime box stuff. Hell, my setups at most shows are entirely picker boxes, though my floor is a buck. I think that most collectors want to collect, and if they are a bit strapped, they can still have fun for a few bucks at a cheap pickers' table.

[Leon]

After selling my collection the first time, I don't worry about the value (though I still have quite a bit in it, relatively speaking) of it like I used to.
A few good purchases can make up for a lot of not-so-good ones. Card interest is up but many commodity type cards, even of Cobb and Ruth, are down.

Originally Posted by Exhibitman

Don, it looks really good from the outside but the numbers are not that good in reality, assuming one operates above-board--not cheating on income taxes, reporting sales for sales taxes, etc. Cost of inventory, cost of sales, sales taxes, and income taxes all take quite a bite out of my gross profit. I know a lot of dealers who are "doing great!" but have only a vague grasp of their actual net profit. I also would not assume appreciation of inventory beyond the rate of inflation. Overall trends can be deceiving. Lots of "-" signs over the last year. Sitting on inventory that is declining in value really sucks; I try to cash out my run of the mill purchases quickly so I don't get stuck.

Jim, I totally get the dime box stuff. Hell, my setups at most shows are entirely picker boxes, though my floor is a buck. I think that most collectors want to collect, and if they are a bit strapped, they can still have fun for a few bucks at a cheap pickers' table.

[HOF_Forever]

Originally Posted by Exhibitman

Don, it looks really good from the outside but the numbers are not that good in reality, assuming one operates above-board--not cheating on income taxes, reporting sales for sales taxes, etc. Cost of inventory, cost of sales, sales taxes, and income taxes all take quite a bite out of my gross profit. I know a lot of dealers who are "doing great!" but have only a vague grasp of their actual net profit. I also would not assume appreciation of inventory beyond the rate of inflation. Overall trends can be deceiving. Lots of "-" signs over the last year. Sitting on inventory that is declining in value really sucks; I try to cash out my run of the mill purchases quickly so I don't get stuck.

Jim, I totally get the dime box stuff. Hell, my setups at most shows are entirely picker boxes, though my floor is a buck. I think that most collectors want to collect, and if they are a bit strapped, they can still have fun for a few bucks at a cheap pickers' table.

I've often wondered how many dealers accurately track things like COGS, net sales, expenses, and inventory to get a truly accurate financial picture. Anecdotally I'd guess the number is pretty low but I've never been on that side of the table.

[theshowandme]

Originally Posted by raulus

Not so sure that it’s really this rich.

This analysis ignores the cost to ship back and forth from the grader. Also ignores selling costs, and the cost of capital or time value of money while your cash is tied up waiting for the piece to get graded, and then waiting for it to sell once it’s graded. Throw in some overhead for salaries to pay your people to manage all this stuff, a little rent to store everything and have a site for your people to work, some insurance to cover your operations, and it gets a lot more tight.

On a good day it’s more like a 15-20% profit margin. On a bad day it could be less than 10%. Still not nothing. But probably not nearly as fat as it might seem at first blush.

Of course, if the market is rising, particularly if it’s rising aggressively, then the time spent waiting for grading and for the piece to sell works to make the math a whole lot better. But as much as it pains us to admit it, cardboard doesn’t always go up, and go up bigly.

I’ll concede the points about opportunity cost of sitting inventory and playing the waiting game

That is real risk for any business owner.

That said, I know several people operating this way and they are churning inventory a number of ways: card shows, Facebook, Instagram, Discord, Twitter, and last case scenario, 7 day eBay auctions.

Shipping adds little to the per unit cost basis if you are sending 50-100 cards at a time for example. Or if you are dropping off at card shows where you only pay for shipping on the way back.

If you are getting 15-25% return on your $ while doing this on the side, it can be very fruitful