As part of our continuing series on how to open a trading card shop, we spent some time with Lloyd Kee and Steve Snyder from GTS Distribution. Take a listen as they provide some tips on how to be successful in this industry as a shop owner and about how GTS Distribution can help a new shop.
Marcel Bilak owns Legacy Sports Cards in Las Vegas, NV and he works through GTS Distribution. Marcel was a sports fan, who became a collector, who then moved on to open an eBay store and then set up at shows. In 2007 he took all his experience and opened up his shop in 2007 and they have been going strong ever since. I asked Marcel to share some follow up questions we had:
Question: Why is planning so important before opening your store?
Marcel at Legacy Sports: “I realized that if I wanted to open to a hobby shop that I would need a loan. The only way to obtain a loan is with a business plan. At first I almost had someone write it for me, but then realized that I would only be short changing myself. I ended up going to my local SBA branch and they helped me write my own plan.
“It took me six months to write the plan. I had never written one before and I learned that there wasn’t a financial institution in the country that was going to lend me money unless I did this right. In writing the plan I became very aware of all the sacrifices that I would need to make in my life and the limited amount of financial profit I would immediately realize in opening a new business.
“Armed with all the facts along with six months of planning and researching, I almost decided to not open my store. Reality set in with regard to how much time was needed to succeed and how disproportionate it was to the initial income. I made a calculated decision to move forward and I was well prepared to apply for a loan from any financial institute. Starting a new business can be scary, but if you take the time to prepare you know what you are getting into.”
Question: They say location is important, what are things a new shop owner should look at in terms of location?
Marcel at Legacy Sports: “After I secured funding it took me eight months to find the right location. Since I had business plan I knew exactly the amount of rent I could pay for the first year and I would not budge from what I had set in my plan. My business plan was my guide to success and I was going to follow it precisely. So with that in mind I looked for a location in my preferred neighborhood, but only in my budget according to my business plan. It took a lot of time to find the right place, but it was well worth it. I choose a location with frontage to a major street that is across the street from a park where little league games are played and it is next to a sports bar.”
Question: How do you find good employees?
Marcel at Legacy Sports: “I strongly believe that you are only as good as the people you surround yourself with. Finding good employees in this business is very difficult. I was scouting talent all the way back when I was writing my business plan. The two things I was looking for were honesty and knowledge. I always go with trust before brains or ability.
“It took a long time to convince them all to come on board at my shop and it was costly, but I moved forward with idea that they were an investment that would yield profit in the future. They did and I know have the best card guys in all of Nevada working for me.”
Question: Why is it a good idea to bring players in for an in-store appearance?
Marcel at Legacy Sports: “I think it is a good idea because your customers really love to meet their favorite players in person. It also creates a lot of mainstream buzz for your shop and you should always reach out to local media when you have a signing going on to help advertise it.
“In-store autograph signings will get customers to sign up on your email list and stop by to see who is coming next. I recommended sticking to Hall-of-Famers or current stars as they have a big draw. Make sure to ask your customers who they would like to see and then get working on making it happen.”
Question: With so many different products, it is hard to decide which new products you want to carry. How do you decide which products along with the quantity that you bring into the store?
Marcel at Legacy Sports: “Here it becomes very important to know your customer. Every product solicitation that comes by desk is reviewed by my entire staff. We all decide together what we bring in and how much. We ask ourselves questions like, ‘Will this be a hot product?’ ‘Will set builders want this and therefore should we crack some of it and put it on the Beckett Marketplace?’ ‘Are the signatures on-card which our customers prefer?’ ‘Who are the key rookies who will help drive the product?’ ‘Do we have a particular customer or group of customers that have already inquired about the product?’ Questions like these lead to our final decisions for products.”
Question: Why do you feel it is worthwhile to partner with a distributor like GTS?
Marcel at Legacy Sports: “I believe GTS is the largest distributor of trading cards in the U.S. They do not have any secondary interests, meaning they only sell sealed boxes and supplies to retail. They do not crack product and or sell cards. I know when I buy from them that my product is clean and since they are the largest they can provide me with Wal-Mart-like prices. They consistently beat pricing across the board.
“Their customer service is outstanding and they have always helped get through the hard times. From the salespeople all the way up to the owner, they are a first class organization. They are a very personable company that really care about their clients. Additionally they are only a one-day ship point to Las Vegas and getting product on time is key to being successful in this industry. I started with them five years ago and that was one of the best decisions I’ve made in this business so far.”
Question: There are things that will come up that are not in your business plan that can really cripple a business. Describe a time where something unforeseen came up and how you handled it.
Marcel at Legacy Sports: “A few years ago we were held up at gun point. They took our entire inventory of vintage cards, most of our current cards and hobby boxes. The economy was down and we were already struggling. That was a huge blow!
“It took us 90 days for our insurance to pay us for the loss. GTS did everything they could to help me keep our shelves stocked in the meantime. No matter how much they helped, our store was still half empty and our card inventory was also extremely low. For about three consecutive months we were unable to meet our customer’s needs in an economy that was unforgiving. I almost gave up more than once, but my love for the hobby kept me going, along with my great staff. Hard times do not discriminate, but how you deal with them speaks volumes about your character. We persevered and are not going anywhere.”
For more information about GTS Distribution, please visit their website, their Facebook page or their Twitter page. For more information about Legacy Sports Cards, please visit their website, their Facebook page or their Twitter page.
Looking for more information on how to open up a trading card shop of your own? Check out other stories on how to open up a shop here:
The information provided in this story is for assistance only and is not intended to be and must not be taken alone as the basis for an investment decision. Opening a trading card store, like any other business, presents certain risks for the business owner. Each reader of this information should make such investigations as it deems necessary to arrive at an independent evaluation of an investment.