Time to once again open up the cyber mailbag.
Last month, I wrote about ways for card store owners to adapt to the times. As a hobby, the innovation we all seek is sometimes within ourselves as we look for ways to expand to the wider audience of general sports fans.
Since card store owners tend to be entrepreneurs, reader Doug Duker is thinking about various ways shops could combine with and possibly add value to other existing businesses. There does seem to be a lot of merit to this, from the book stores he mentions to coin stores or record stores or anything which appeals to a collector’s mindset.
Citing an example outside the hobby to start, he wrote about a driving range in Ohio that had a pro shop, a miniature golf course and a Dairy Queen all on the same property. We’ll let him explain the rest:
Dad brings kids, they play miniature golf while he hits balls and then they all eat ice cream. What do card shops have in that vein? Lots of driving ranges fail, so do putt-putt courses, pro shops don’t make it, and even Dairy Queens have to shutter the windows. But this one thrived. One stop shopping.
I would add that WalMart wasn’t in the grocery business not that long ago. They decided if they were spending big bucks on rent, advertising, utilities, etc. that they could do better, get more bucks per square foot, with more to offer. Now they are number one in the grocery business. They (also) offer cards. Note that they are at the checkout counter. Note also they are at eye level for the 8 year old. Impulse items.
A further point on this theme is found at the intersections of interstates with state roads in not so densely populated areas. You’ll find the gas station is teamed up with a couple of food franchises. Again, an attempt to capture more of the consumer’s dollars per stop.
Retail businesses run on margin and throughput. Grocery stores traditionally have the thinnest margin but turn their inventory 52 times a year. Nonetheless they can’t run two for one sales if they have 10% margins. It’s a fool’s errand for a dealer to think he can operate on a 10% margin, turn his inventory once a year, and stay in business. Not to mention what to do with last year’s product. Note also the food franchises that team up with the gas station operate on a 67% gross margin (food cost). All the rest goes to labor and overhead with some left over for profit.
If cards are an impulse item for WalMart , who can the dealer team up with to get out of the designated destination trap? Beverages, cigarettes, and groceries come to mind (convenience store staples) Maybe they could find an older gas station to team up with. Used book stores aren’t in the same vein but misery does love company so maybe that would work. It’s not my place to tell them exactly what to do and how to do it. I’m just offering an opinion on what the smart money is doing elsewhere. Note further that food franchises pay a premium to be in a WalMart store.
Point to all this rant is that wishing the industry were different isn’t going to cut it. The smart money adapts to its environment.
Doug, I think we’ve touched on this but years ago, when I lived in New Jersey and the hobby was flying, card stores were located in all sorts of ventures. We know about coin shops that often carry cards but I also remember “stationery stores”, pizza parlors and even laundromats including a card area. There’s a shop in Omaha that’s designed to feel like a sports bar.
I do agree with you, that for many retailers, there is probably some cost benefit to reduce their space to sell items and work out a deal to sell space to a card store. The partnership would have to make sense of course, and not all of them worked. Researching area demographics would be very important. Selling memorabilia rather than cards would be something to consider. The used book store is a good idea and there are others, like barber shops/salons.
I remember walking in Red Bank, New Jersey about 1991 and thinking the downtown area would have been a pretty good place for a card store. It was very artsy at the time with lots of places selling items to people passing by on the street. Collectibles of all kinds do sell and aligning with other stores selling them in the same area would seem to be a good idea.
Dallas proper may not have a great downtown but some suburbs like Plano are trying to grow a small, but very nice downtown area and might be a neat place to have a place to hang out. I’d rather spend a few hundred dollars a month for a more limited space and build a clientele then several thousand right off the bat for a full store.
Limited space also helps to prevent that “we’ve got to stock everything” dilemma.
And I do want to touch on a few other issues which came up in the spirited Facebook discussion we had about the previous article.
Yes, the parsimonious couple which had the husband refuse to pay the $1 admission at one of our recent shows is a true story. I keep track of all people who enter the room and had a separate notation for them. I keep track of paying customers, kids who enter who do not get charged admission and created a notation for them.
The same person who was skeptical of that example believes shop owners weren’t behind the eight ball on box prices because online dealers faced shipping costs.
I checked three major on-line retailers. One offers free shipping with a minimum $99 order, one is at a $150 and one is at $199. So let’s say you order two Bowman Draft boxes at $50 per. Your order qualifies for free shipping and for $100, you’ve got two full boxes delivered. If you pay the local store price of $74 plus 8 percent sales tax that comes out to approximately $80 for just one box. It’s common now and we do feel empathy towards store owners because that type of comparison shopping puts them in a bad place.
Of course, there are a lot of benefits from buying at a shop and one we didn’t touch on earlier is that many of them offer to help with card company issues. I know Triple Cards keeps several small boxes of all the redemptions he handles for his clients and when a collector feels they have a problem he can go to bat for them.
One of a local shop’s clients was upset since his bonus ball from the Tri-Star Yankee signed baseball issue was Shane Spencer. Now, I promptly waxed poetic about Shane Spencer and his role in the magical 1998 season and how thrilled I would be with that signed baseball. His customer did not share my opinion and when he contacted Tri Star just to explain the circumstance, Tri-Star, to their credit and without being asked for anything, found a way to help assuage his client’s feelings.
But more importantly, if 90 percent of collectors have something go wrong, they might not know who to go to or spend the energy a card store owner would to try and help.