Business Finances - What Does it Cost to Sell a Card?

Since I've been doing a lot of money management with my business lately, I figure this might be a good time to talk about it.

Recently, I put a hold on future episodes of Doom Ninja Podcast. This was mainly due to the investment of time and money being much higher than the yield. There was no yield, actually. Since my time is becoming more sparse trying to build my online store with new listings, filling daily orders, and purchasing shipping supplies, it seemed like the correct option.

The decision to stop doing episodes of the podcast saves me $31 and ~16-20 hours of my time per month.

On to the card stuff.

Since I've been filling orders through, I have created a spreadsheet that tracks all of the sales and profit margins. Things went very well in the beginning, yielding better than expected margins. This was later balanced out by low ticket sales with negative yield. (yes, that's a real thing that happens).

Here's the breakdown of a low value card sale for those interested:
Cost to purchase a card - 40% of TCG's lowest listing or market price
Cost to ship a card (single card, low cost, no insurance or tracking) - $0.63 (envelope, paper, ink for printer, penny sleeve, toploader, tape, stamp)
TCGPlayer's cut - 8%
Paypal/Credit Card Fee (here's where the money really gets lost on small orders) - 2.5% + $0.30
Labor - 3 minutes @$10.00/hr (price, pull, package, ship) - $.0.50

The breakdown for a higher end order (over $40) is as follows:
Cost to purchase a card - 40-60% of TCG's lowest listing or market price
Cost to ship a card (bubble mailer, insurance, and tracking) - ~$5.00 (envelope, paper, ink for printer, penny sleeve, toploader, tape, postage w/insurance and tracking)
TCGPlayer's cut - 8%
Paypal/Credit Card Fee (not as bad on larger ticket items) - 2.5% + $0.30
Labor - 3 minutes @$10.00/hr (price, pull, package, ship) - $0.50

An example of sales:
I fill an order for $1.50.
I paid 40% for the card ($0.60).
Shipping is $.63.
TCG takes 8% ($0.12).
Paypal takes 2.5% + $0.30 ($0.04 + $0.30! = $0.34)
Labor - $0.50
Profit? = -$0.69 (46% loss)

A $5.00 order would profit $1.04
Item cost - $2.00
Shipping cost - $0.63
Fees (I don't consider it a real cost on profitable sales since it's only collected on a sale) - $0.83
Labor - $0.50
So I pay $2.63 and I make +$1.04 (~40% profit)

A $20 order with no tracking profits $8.97
Paid $9.13
Made +$8.97
Profit = 98% Woo Hoo!

A $20 order with tracking is more like $6.70 (59% profit)
A $40 order profits $14.50 (73% if purchased at 50% of market value)

The profits are good when the orders are $5 and above and great when the orders are for high ticket items; That's why I usually offer a slightly higher percentage for more expensive cards. Even with good margins, it takes lots of orders to make a decent amount of money. Taking into consideration that not all cards purchased will sell in a timely manner or even sometimes at all, the margins are probably a few percent less. 

People can usually make a larger profit on cards by selling them to a store than if they sold them on their own (especially for trade-ins). If you compare what is paid to what is made, you can see that the customer usually gets just as much or more money quicker and easier than the stores. 

Something to consider the next time you're thinking about selling some cards. :)

If you're interested in more in depth financials like this, let me know. I enjoy number crunching and seeing what is actually happening with my investments and what may happen with potential future investments.

Until next time.