The global sports card business market is rising quickly. Reaching $12,621.10 million in 2022 was just a start. With an estimated compound annual growth rate (CAGR) of 7.8% from 2024 to 2030, the market could reach $23,084.64 million by 2030.
Whether you want to buy and sell cards on the side or open up your card shop, the sports card industry holds a lot of potential. This guide will help you learn how to start a sports card business. Topics include market research, competitive analysis, registering an EIN, opening a business bank account, and more.
1. Conduct Sports Card Market Research
Market research is essential to starting a sports trading card business. Market research offers insight into your target market, local market saturation, trends in sports memorabilia, and competitors in the sports trading card industry.
Some details you’ll learn through market research include:
- Vintage cards from the early 20th century are the most valuable, like a mint 1952 Mickey Mantle card.
- Modern rookie cards of star players can also command high prices, a LeBron James 2003 rookie recently went for $1.8 million.
- Limited edition inserts and autographed cards are also in demand.
- The average sports card sells for around $15, but prices range widely based on scarcity, condition, and player popularity according to cardboardconnection.com.
- The pandemic drove increased interest as people spent more time at home and found nostalgia in collecting.
- Prices surged with more demand – one index that tracks card values rose 68% in 2020.
- Experts think the generational shift as millennials and Gen Z start collecting bodes well for long-term growth.
- The community aspect is also huge, with conventions, card shows, breaks (group openings), forums, and YouTube channels building energy.
- Social media allows collectors to show off prized cards and watch viral unboxing videos.
Key advantages are low overhead costs compared to other retail businesses and the ability to scale online sales. One can also provide services like grading, authenticating, and restoring vintage cards. The social community provides opportunities for in-person sales.
2. Analyze the Competition
For those looking to open a physical sports card shop, research competitors in your geographic area. Drive to each location and evaluate product selection, prices, store layout, customer service, and more.
Some ways to analyze local competitors in sports cards include:
- Talk to the owners to learn about their biggest challenges.
- Search online directories like Yelp for customer reviews. This allows you to identify opportunities to differentiate your shop.
- Analyzing online competition is also key. Search for terms your customers would use like “buy basketball cards” and see who ranks highest in results.
- Visit their sites to review product range, prices, shipping options, website design, and ease of use. Sign up for email lists to evaluate promotions and specials.
- Check social media follower counts and engagement.
- Join sports card forums and Facebook groups to get a pulse on community perceptions of the major online retailers.
- You can gain insights into what customers like and dislike about the shopping experience.
- Evaluate the full customer journey. Does the site make purchasing seamless? How do they handle returns or issues?
Evaluating competitors in this way allows you to recognize areas where you can better serve customers. Offering lower prices only gets you so far. Winning comes from building a brand people passionately relate to and providing amazing service.
3. Costs to Start a Sports Card Business
Starting a sports card trading business requires startup and ongoing costs. Let’s break down these costs to better understand what it takes to start your own sports card business online or in person.
Starting a sports card business does not require a huge upfront investment, especially if you begin operating online. Initial costs will include any licensing fees, equipment, and product inventory.
- For licensing, most states require a general business license which runs $50-$100. Some also need a sales tax license ($10-$20).
- Operating online simplifies things, but those wanting a physical store must comply with zoning permits and other local requirements that could cost a few hundred dollars.
- Initial equipment like a computer, printer, and office supplies will be around $500-$1,000 depending on quality.
- Those buying large collections may need archival storage supplies like card sleeves ($100) and storage boxes ($5 each).
- A point-of-sale system for in-store sales runs $500-$2,500 for hardware and software.
- Starting inventory is flexible depending on your focus.
- Building a diverse starter collection of 1,000 common cards could cost $1,000-$2,000.
- Those dealing in rare cards can start smaller, like $5,000 worth of inventory.
- Well-graded vintage cards are where higher startup costs come in, like $25,000 for a high-end foundation.
Other potential startup costs for a physical store include:
- Lease deposit 1-2 months rent ($1,000-$4,000)
- Store build-out/renovations ($5,000-$30,000)
- Store signage – $300
- Security system – $500
- Insurance – $1,000/year
- Initial advertising/marketing – $500-$2,000+
- Rent – $1,000-$5,000
- Employee wages if any – $12/hour
- Inventory purchases – $500-$5,000
- Bookkeeping fees if outsourcing – $150-$500
- Office Supplies – $50-$200
- Internet and phone service – $150
- Electric, gas, water – $200-$500
- Insurance $100-$300
- Credit card processing fees – 2-4% of sales
- Advertising/marketing budget – $100-$500
Annual costs can include:
- Local business license renewal – $25-$100
- State sales tax permit – $10-$20
- Accountant fees potentially $1,000-$5,000
- Store maintenance – $500
- Security system monitoring – $500
- Insurance renewal – $1,000
- Store signage updates – $200
Profit margins vary in the sports card business from 10%-1,000%+ depending on your strategy. By keeping overhead low, reinvesting wisely, and providing great service, one can steadily build a brand and inventory value.
4. Form a Legal Business Entity
When starting a sports card business, one of the first legal steps is choosing a business structure. The four main options each have pros and cons to weigh.
A sole proprietorship is the simplest, with no formal business registration needed. You and the business are one entity. While easy to set up, there is unlimited personal liability. Any legal issue or business debt impacts your assets. Income is also reported on your tax return. This works for an individual starting small but poses risks as the business grows.
Forming a general partnership shares ownership and management between partners. You still get pass-through taxation and avoid double taxation. However, each partner is jointly liable for debts and legal issues. Disagreements can also create problems. This works if you fully trust your partner(s), but control and liability should be considered.
Limited Liability Company (LLC)
An LLC (limited liability company) provides personal liability protection like a corporation without double taxation. Only your investment in the business is at risk. The operating agreement details each member’s rights and responsibilities. LLCs also allow pass-through taxation.
Overall an LLC separates your personal and business assets while allowing partnership-like flexibility. This is likely the best choice for a sports card business as it provides liability protection as you scale up inventory and expand staff.
A corporation creates a legal entity that is completely separate from its owners. “C corps” issue stock and pay their taxes. Owners are shielded from liability and only their investment is at risk. The downside is double taxation on profits.
“S corps” allow pass-through taxation but have strict ownership rules. Incorporating brings more record-keeping and regulations as well. This structure works if seeking outside investors or an IPO someday. However, an LLC provides liability protection without the extra corporation complexity.
5. Register Your Business For Taxes
One key legal step for any business is obtaining an Employer Identification Number (EIN) from the IRS. This number identifies your business for tax purposes and is required even if you have no employees. An EIN is free and easy to get online.
Go to IRS.gov and search “apply for an EIN”. This takes you to the online application. Click “Apply Online Now” and follow the steps:
- Choose the reason as “Started a new business”
- Select “Sole Proprietor” or your business structure
- Enter basic info like name and address
- Submit the form to instantly receive your EIN
Print or screenshot the EIN assignment for your records. You’ll need this number to open a bank account, apply for licenses, hire employees, and file taxes for your business.
Many states also require a sales tax ID if selling retail. For example, California requires a seller’s permit. Some states let you apply when registering your business. If not, search “[your state] sales tax permit” to locate the department website and apply for your ID.
Fees range from $0 to $20 depending on the state. This ID number allows you to collect and remit sales tax. Most states let you handle this online each month.
Don’t be intimidated by these registrations. Obtaining an EIN and sales tax ID is quick and easy. Having these set up makes you a legitimate business in the eyes of banks, suppliers, and the government. Taking these steps early allows everything else to fall smoothly into place.
6. Setup Your Accounting
Proper accounting is crucial when starting a sports card business. Good record-keeping helps maximize profits and minimizes tax headaches. The right software and professional support provide peace of mind your finances are handled correctly.
Using accounting software like QuickBooks streamlines everything. It integrates with bank accounts to automatically import income and expenses. You can create invoices, track inventory, and run financial reports with a few clicks. QuickBooks makes basic bookkeeping easy so you can focus on growing your business.
Hire an Accountant
Hiring an accountant, even part-time, is wise especially when starting. They can set up your QuickBooks with the right structure and teach you best practices. Accountants offer bookkeeping services like reconciling accounts, preparing financial statements, and guiding tax strategy. Come tax season, they’ll ensure filing is seamless.
Open a Business Bank Account
Keeping business and personal finances completely separate is also key. Open a dedicated business checking account and credit card. Never come in funds or pay personal expenses from business accounts. Tracking income and expenses is far simpler when separated. It also reduces tax mistakes and audit risk.
Apply for a Business Credit Card
Applying for a business credit card is straightforward when you have your EIN. Issuers like Capital One Spark evaluate your credit, time in business, and estimated revenue. This establishes your business credit profile. Ideal for building credit and earning rewards on purchases.
7. Obtain Licenses and Permits
When starting a sports card business, proper licensing is crucial to operate legally and avoid issues. Federal license requirements can be found through the U.S. Small Business Administration. The SBA also offers a local search tool for state requirements.
- Business License – Most states require a general business license to legally operate. Fees are usually $50-$100 annually.
- Zoning Permit – For those wanting a physical storefront, a zoning permit ensures your location and type of business meet local regulations. Fees range from $100-$500.
- Sales Tax Permit – If selling products retail, a sales tax permit or seller’s license allows you to collect and remit state sales tax each month.
- State Tax ID – In some states, a tax ID number used for sales tax is also your business ID for state tax purposes. It identifies your business for filing and paying all applicable state taxes.
- Fictitious Name Filing – If using a “DBA” fictitious business name like “Bob’s Sports Cards”, register this name with your state and/or county to make it official.
- Food Vendor License – In the event your shop sells packaged snacks, drinks, etc., a retail food license is required in most states to meet health codes and allow for inspections. Fees vary.
Ensure all needed licenses and permits are secured before opening doors or selling online. Being properly registered and compliant with federal, state, and local regulations keeps your sports card business operating smoothly while avoiding penalties. Check requirements annually for renewal.
8. Get Business Insurance
Business insurance is highly recommended to protect any sports card venture. Without coverage, a single incident could destroy everything you’ve built.
Imagine a fire breaks out and destroys your store and inventory. Or a visitor slips and falls, suffering serious injuries. They decide to sue your LLC for negligence. In both cases, costs could quickly escalate to bankrupt your company without insurance to cover damages, legal fees, and settlements.
Other scenarios like theft, supplier issues, or natural disasters could also cripple your business without protections in place. Business insurance reduces these risks so problems that arise don’t become catastrophic.
General liability insurance covering up to $1 million in damages starts around $30/month. Product liability protects against claims from selling faulty merchandise. Commercial property coverage replaces stolen or damaged inventory.
Insurers will request more info to generate a precise quote based on risk factors. Expect approval and proof of insurance in under a week after paying your first premium.
Having appropriate business insurance gives you peace of mind that your sports card venture is protected against the unknown. Don’t wait until after disaster strikes to secure coverage.
9. Create an Office Space
Having a dedicated office space can be beneficial for certain sports card ventures. An office allows you to handle administrative tasks, store inventory securely, and meet with clients if doing local dealings. Options range from working at home to leasing commercial space.
A home office works well when starting online with lower inventory. Dedicated space for packaging orders, managing listings, and general administration. Costs are just furniture and supplies since you avoid paying rent elsewhere. The downsides are a lack of professional appearance and distractions from home life.
Coworking spaces like WeWork provide affordable office access starting at around $300/month. You get a desk in a shared environment with business amenities like meeting rooms, lounges, and coffee. Limited storage may require keeping bulk inventory offsite. Coworking offers networking opportunities and flexibility as you scale.
Those doing frequent local sales may want a small retail space. Expect lease rates from $1,000-$3,000/month depending on location and size. Having a storefront allows buy/sell transactions onsite and provides space to market your brand. But higher costs cut into profits.
For larger operations, a commercial office space offers room for staff, extensive inventory storage, and shipping areas. Leases average $2-$6 per square foot monthly. These spaces project professionalism for large clients. However significant inventory should still be kept in a warehouse for security and insurance reasons.
10. Source Your Equipment
The core materials needed for a sports card venture are inventory to buy/sell and basic office supplies. Sourcing equipment ranges from purchasing new to buying used.
When first starting, aim to acquire inventory well below market value. Search Craigslist and Facebook Marketplace for entire collections people are selling locally. Estate sales can also yield boxes of cards from collectors who passed away. Go to events like garage sales and flea markets to negotiate deals.
Buy Used Supplies
For office equipment, buy used initially through Craigslist,eBay, and OfferUp. Search for a quality used desk, computer, printer, phone, point of sale system, and other basics. Buying used saves thousands over purchasing everything brand new.
Once established, expand the inventory by buying large collections on eBay and attending sports card conventions. Develop relationships with distributors to access wholesale pricing on new sealed products like packs and boxes. This requires a state resale certificate.
Renting equipment is an option, but doesn’t make as much sense for a sports card business. You want to build up your owned assets over time vs continually renting.
The exception would be a retail space if you open a physical store. Short-term leases provide flexibility before committing to a long-term spot. Consider a temporary month-to-month rental to test locations.
11. Establish Your Brand Assets
Developing a strong brand is key for any sports card venture to stand out. Your brand identity stems from the logo, name, design language, and reputation you build.
Get a Business Phone Number
Start by purchasing a dedicated business phone line through a provider like RingCentral. Choose a professional number local to your customers. This goes on all branding materials to project credibility.
Design a Logo
Creating a logo and visual assets is next. A logo encapsulates your brand identity. Consider an emblem incorporating a focal sport, team name, location, year founded, or quirky mascot. Services like Looka make professional logo design simple and affordable.
Complement your logo with brand colors, fonts, and image styles to be used across packaging, promotions, websites, and more. Aligning visuals strengthens recognition. Apply brand elements widely for consistency.
Print Business Cards
Business cards from Vistaprint make introducing yourself simple. Include your logo, tagline, contact info, social media, and any certifications that build trust. Cards enable networking and help get your name out. Always have some handy-for-chance meetings and interactions.
Custom signage and décor from Vistaprint can brand your store if going the retail route. Quality signage builds awareness and draws foot traffic. Consider neon accents and life-size player cutouts to decorate your space.
Buy a Domain Name
Securing a domain name for your website and email is also vital. Use Namecheap and aim for YourNameCards.com or YourCitySportsCards.com. If taken, get creative with prefixes, suffixes, or abbreviations. Make it short, simple, and easily memorable.
Design a Website
Building a professional website establishes your online presence. Use DIY builders like Wix for drag-and-drop simplicity or hire a skilled designer on Fiverr for a custom site. Showcase inventory, policies, credentials, and brand story. Make contacting and buying easy.
12. Join Associations and Groups
Joining local sports card associations, clubs, and Facebook groups can provide invaluable connections as you start. These communities give access to trade secrets, potential partners, and new opportunities.
Search for associations in your city or region that bring collectors together. For example, the Oregon Sports Collector Association hosts Meetups, auctions, and networking events. Join the mailing list for news of gatherings and conferences.
Attending collectible conventions like the National Sports Collectors Convention is also a must. Here you can browse vendor booths, find inventory, and connect with fellow enthusiasts from around the world. Use sites like Meetup to find similar events near you.
Facebook groups enable connecting with other collectors online. The Baseball Cards Collectors & Hobbyists Buy/Sell/Trade has over 9,000 members actively buying, selling, and discussing. Offer to buy collections from local members or postcards for sale yourself.
13. How to Market a Sports Card Business
Implementing an effective marketing strategy is essential for any sports card business to gain visibility and attract new customers. While referral marketing should be your priority, blending digital and traditional tactics will drive growth.
Start by incentivizing existing patrons to refer friends and family. Offer 10% off their next purchase for every new customer they bring your way. Building on word-of-mouth referrals from satisfied collectors enables organic growth.
Digital marketing opens up larger audiences online. Useful tactics include:
- Start a business Facebook page to share inventory, and promotions, and engage with followers. Run paid ads to boost key posts.
- Create YouTube pack opening videos and tutorials on collecting. Optimizing SEO helps drive organic views over time.
- Claim and update key local business listings on Google, Facebook, Yelp, and elsewhere to boost visibility.
- Run Google Shopping ads to showcase products on searches for player names, teams, and card types.
- Start an email newsletter with collecting tips and new arrival alerts. Offer discounts for signing up.
- Write blog posts on collecting advice and promote each piece on social media.
- Partner with influencers on unboxing videos and sponsored posts to access their collector audience.
Some traditional marketing can also assist:
- Print flyers with current promotions and inventory need to be handed out at conventions and events.
- Take out ads in collecting magazines to target that niche.
- Sponsor local youth sports teams and include your logo on uniforms to raise local awareness.
- Run radio ads on sports talk stations before major events like the World Series or NBA playoffs.
- Rent banners at card shows and hobby shops frequented by collectors.
The most effective marketing combines digital initiatives scaled through ads with real-world relationships and word-of-mouth referrals. Meet collectors where they are online and offline while delivering value.
14. Focus on the Customer
Providing exceptional customer service is crucial for any sports card business to drive referrals and repeat sales. Given the passion collectors have, going above and beyond cements loyalty.
Some ways to improve focus as a sports card business owner include:
- Respond quickly to inquiries and ship orders the same or the next day. Set up an online knowledge base with collecting tips and resources so customers can self-serve information.
- Offer perks like free plastic card sleeves on purchases over $50. Include a handwritten thank you note with online orders. These small touches make a difference.
- Be ultra-responsive in handling any issues that arise. Misprints happen, and packages get lost. Resolve problems ASAP, even if at a small cost to you. A customer taken care of is a lifelong brand advocate.
- Most importantly, demonstrate your expertise and care for the hobby. Get to know frequent patrons and what players and teams they collect.
- Suggest cards you think they’ll appreciate. Curate special care packages for birthdays or big life events.
- This level of service earns five-star reviews, word-of-mouth recommendations, and repeat business. One happy customer can tell dozens of fellow collectors about their experience.
Striving to build personal connections and create a top-notch experience cements your reputation. Customer service is the ultimate marketing strategy for a sports card venture.