Do you want to know how much money you can make selling sports memorabilia? If YES, here are 7 factors that determine the profit margin for sports memorabilia shops. Whenever any entrepreneur wants to start a new business, one of the first questions that they usually ask is how profitable the business is.

This narrative also applies to entrepreneurs who are looking towards opening a business that involves selling sports memorabilia. They would want to know how much they are likely going to make daily, weekly, monthly and annually from the business and of course, the profit margin they should be expecting.

There is no one-mold-fits-all when it comes to how much a sports memorabilia shop is expected to make. There are some factors that we are going to look into before giving an estimate of how much an average sports memorabilia shop can make yearly and these factors are;

7 Factors That Determine How Much Money You Can Make Selling Sports Memorabilia

1. The Size of the Shop

Under normal circumstances, one cannot conveniently state the amount a sports memorabilia shop is expected to make if you do not know the size of the shop. As a matter of fact, the amount a small roadside or mobile sports memorabilia shop is expected to make annually will be far different from the amount a standard sports memorabilia shop franchise with several outlets will make annually even if they operate in same location.

Of course, the amount invested in a small roadside shop is different from the amount invested in a large shop hence the amount they will both make will be far different. One the average, the approximate cost of starting a used sports memorabilia shop depends on what the owner has in mind and their financial capacity.

2. The Location of the Shop

When it comes to setting up a new business, location plays a major role which is why feasibility studies and market survey are essential before settling for a location. Usually, if your sports memorabilia shop is located in an area with good human and vehicular traffic, an area in the hub of sporting activities and you have quality sports memorabilia from different brands, you may not have to struggle to get people to visit your shop and make purchase.

Please note that the amount a sports memorabilia shop that is located in a low traffic area will make yearly will be lower when compared to a shop that is located in a high – traffic area in a cosmopolitan city.

So, if you want to make it big with your sports memorabilia business, then you must be ready to rent a store in a high traffic area, a location with the right demography of people with the lifestyle and purchasing power. Please note that you are going to be paying more to rent a store in a high – traffic area in the hub of sporting facilities like a stadium.

3. The Types and Brands of Sports Memorabilia Retailed in the Shop

Another important factor that will determine how much a sports memorabilia shop is expected to make is the types and brand of sports memorabilia that are retailed in the shop. Ideally, world class sports memorabilia stores retail jerseys, pants, caps, helmets, gloves, shoes, or even sunglasses.

Game Used can also refer to bats, balls, turf, flags, automobile racing, the metal from the cars, the tires, drivers and crew uniforms, etc are popular collectables used by a player. You will agree that some of these sports memorabilia cost several thousands of dollars and some are even in the million – dollar range and the profit markups from such are usually very high because of the investment and risk involved in trading them.

4. The Management Style of the Sports Memorabilia Retail Shop

Another key factor that will determine the amount a sports memorabilia shop is expected to make yearly is the management style of the shop. Trust me, the results you will get when you have a good manager will be far greater than what an average or bad manager will get; definitely their results will be obvious and different. Even if you give the managers same conditions to work and same products to retail.

5. The Business Model of the Sports Memorabilia Retail Shop

There are different business models that a sports memorabilia retail shop can adopt and these business models offer different results. For example, the amount a sports memorabilia retail shop that also runs an online store will make yearly will be different from the amount a strictly brick and mortal sports shop will make yearly.

The amount a sports memorabilia retail shop that also sells and operates franchise will make yearly will be far different from the amount a strictly one location walk-in shop will make. This goes to show that the amount a sports memorabilia retail shop will make yearly is dependent on the business model of the shop.

6. The Advertising and Marketing Strategies Adopted by the Sports Memorabilia Shop

Another key factor that will determine the amount a sports memorabilia retail shop can make yearly is the advertising and marketing strategies adopted by the shop. Trust me, there are several advertising and marketing strategies that can help a business increase their earnings, but you may be expected to spend more.

But the results you will make will far outweigh the amount you spent on advertising and marketing. Of course, you don’t expect a sports memorabilia retail shop that is engaging in aggressive advertising and marketing to make same amount yearly with a sports memorabilia shop that is passive with its advertising and marketing.

7. The Number of Years the Business is in Existence

In business, the number of years you are in existence will go a long way to determine the amount you will make especially if the business is properly managed. This is because you would have over the years win loyal customers, customers who are going to be spending fortunes buying a from you.

For example in your first fiscal year (FY1) you might make two hundred and fifty thousand dollars ($250,000), in your second fiscal year (FY2) you might make seven hundred and fifty thousand dollars ($750,000) and in your third fiscal year (FY3) you might make one million, five hundred thousand dollars ($1,500,000). Interestingly, most businesses including sports memorabilia retail shops usually breakeven from the third year of operations.

Usually, a small – scale but standard sports memorabilia retail shop that is located in a high – prone human and vehicular traffic location in a cosmopolitan city in the United States of America will make on the average several hundreds of thousands of dollars annually, all things being equal.

Estimated Profit Margin for a Sports Memorabilia Retail Shop

The profit margin for sports memorabilia can vary a great deal and it could be up to 98 percent. Individual items can be valued in millions of dollars. For example, a T206 Honus Wagner baseball card was sold for $2.8 million in 2007.

For example, the most expensive piece of sports memorabilia ever sold, a New York Yankees baseball jersey worn by Babe Ruth during the 1920 season, sold for $4,415,658 in 2012. In 2016, the ten most valuable sports cards and memorabilia sold for a record-setting combined $12,186,294.

Have it in mind that currently, the typical sport memorabilia shop is only making 42 to 47 percent gross profit margin after all the over heads and operational cost have been deducted. If you make 50 percent you are amongst the average earners in the industry.

In essence, the profit margin from a sports memorabilia shop is between 42 to 47 percent and it includes all the factors involved in getting the products to the shelf.

Solomon. O'Chucks