The other night my wife informed me that on Saturday I would be going to Nick’s Sports Cards. While that actually means I’m picking up food at the deli, I’m allowed to build in some time to drop in to Nick’s, which is located next door. Sometimes we talk about yesterday, sometimes we talk about today and sometimes I’m smart enough to listen to what Nick and Debbie have to say about the card business.
Our latest discussion centered around the shopping season and even through for the sports card market the holiday rush no longer is what it used to be, it’s going to be an interesting few weeks at stores around North America. Both Nick and Debbie were explaining to me just how difficult this hobby season is going to be because Topps is scheduled to release about a dozen products in December—six of them baseball– and that does not count anything Panini, Upper Deck or other manufacturers are doing.
There are always more items to buy but as the years have evolved, Nick and Debbie have begun to try to move products out faster. Similar to a big company like Dell, the goal has been to not stock inventory for sales, but to stock just enough inventory so when it sells there is room for the next item, which is always around the corner.
And that is a major difference from 25 years ago when they first opened their store. Back in 1989 (and for most of the 1980’s), the first Topps baseball cases for the upcoming season would hit the distributor at the tail end of the year. You ordered enough not only to sell, but to stock for the months to come, when the price on the previous year’s cards often went up–not down.
I think Debbie said their cost for those boxes in 1989 was about $12 and they sold a lot of them, usually at around $16 each. While that markup may seem miniscule, the sheer volume of the cases being ordered—and sold– made up for the small return. Because the packs were marked at 50 cents each, there was a minimal mark-up one could make. Debbie told me the first couple of years they were in business they ordered 20 cases while I remember Wayne Grove at 1st Base telling me he used to order 50 cases.
Yes, the world was sure different 25 years ago when New Year’s Day meant a cornucopia of important college football games and sorting baseball cards for a season that wouldn’t begin for three more months. And by the way, I thought there was something special about being able to watch the best college teams in the country using the “eye” test. Today, while the “eye” test is still important, for the first time we have a playoff and the season is expanding to the middle of January. And now, tell me with the length of the season, the time commitment and the big money involved, how do you justify not paying those players something?
For sports card retailers, this month should be a time to consolidate what they have and then make their holiday sales as they prepare for the next year. Instead, Nick told me that with the flood of products, many stores have cash flow issues in just trying to sell through what they ordered.
We have talked in our recent box reviews how sorry we feel for the store owners when the boxes they are trying to sell may be available from the big online retailers at levels below what they paid direct. That sets up this very difficult double-header. While everyone in business is worried about return on capital, for Nick and many other hobby people the far more important issue is the return of capital.
If collectors are confused by the type and number of products arriving during holiday seasons, many will vote with their pocket books and buy less and, in many cases, cheaper items. There are always exceptions as when I received an email from another local shop, Triple Cards, who indicated they had sold out of their $300+ Topps Dynasty allotment. But then there are the products such as Topps Update and Topps Chrome Football which are already on Nick’s discount tables and they will keep lowering the prices until they have sold out so they get some return of capital to order the newest products.
There are, however, some beacons of hope in hobby products especially if it is something new and original. I noticed Nick had been advertising and had in a
nice prime position the Elemetal Honus Wagner card/silver ingot at $64.99. Elemetal is a hobby related issue that Dave Slipeka, one of my former Beckett comrades, is involved in. I casually asked him how the sales were and he said they had been surprisingly strong and he loved the concept so much that he is tempted to keep one each of the five-player set for himself. Many were skeptical but the product is nearly sold out.
“It’s been an amazing lesson in not listening to the nos but serving the yeses,” he told me. “Those willing to try something new made quick, easy money.”
The next player in the set, and this is scheduled for distribution by the end of 2014, is Cy Young. While I personally doubted the whole concept as a good sell through, it was good to see positive reactions from a local store on a product that’s different from the endless supply of boxes.
As always, I learn a lot from going into Nick’s and they welcome me as a visitor even if I don’t buy anything. This time I did purchase some needed supplies but the education from coming in their store is priceless. And hopefully, during next year’s holiday season, there will be fewer new releases so the stores can enjoy the business without worrying about whether they can make enough money to keep up with the manufacturers.