This is an example of a one month profit and loss summary for my $10,000 card shop. Gross sales were $1,500 for one month. Averaged $50 in sales per day and was open for 30 days during the month. You may think $50 a day is low…… don’t open a sports card store if you think you can pull in hundreds per day in sales.
I break down this profit & loss statement line by line below.
Line 6: Gross Sales $1,500. In this example I had sales of $50.00 a day, and worked 30 days in the month. Here is a breakdown of what my $1,500 in sales might have looked like.
Sold $5.00 worth of single cards per day. There is a huge 500% markup on single cards. If I buy a card for .01 cent I charge .05 cents for it.
Sold 10 Beckett Magazines during the month at $5.00 each. I bought the Magazines for $2.50 and sold them for $5.00.
I sold $20 worth of unopened packs per day for a total of $600 for the month. I marked up my packs by 100%, while that is unrealistic for most shops, I bought mostly low-end, closeout packs with my initial inventory.
As with the unopened wax, I sold $20 worth of WinCraft items per day and marked them up 100%.
Sold $3.33 worth of sports card supplies per day. The markup is decent for supplies, if I bought soft sleeves for .33 cents a pack I sold them for $1.00.
Line 7: COMC Income $100.
Most people open a card store and have some sort of income coming in from sales of cards online. This can be from eBay, COMC, or some other source. In this example I will use COMC. As shown below, I’ve sold quite a few cards and can afford to take $100 a month off the table to help supplement the start up of my card store.
Make sure before you open a sports card store you have at least $100 profit coming in from some other source like eBay or COMC.
Line 21: Advertising – $0. If you don’t spend anything on advertising, you better be hustling on Craigslist, Facebook, Twitter, and Instagram. Probably in that order as well.
Line 22: Business License Fee – $10. There is an annual fee of $120 for my counties Business License so I broke it down per month.
Line 23: COMC Cash Out Fee – $20. There is a 20% cash out fee on COMC when I withdraw my $100 per month.
Line 24: Credit Card Processing Fee – $11. I’ve signed up with Square, and estimated $400 of my sales came from a debit/credit card. Square charges 2.75% which is where the $11.00 comes from. This total can fluctuate month-to-month depending on how much your debit/credit card sales were.
Line 25: Electricity – $0. In the example I gave when opening my card shop, electricity was included in the rent. This may not be the case if you open a store. Be sure to account for this and possibly other utilities like trash or common areas.
Line 26: Insurance – $0. Your landlord may require you to carry an insurance policy on your inventory value. You may also just want it for piece of mind. This could cost you around $25 a month or more depending on how much inventory you have.
Line 27: Internet –$55. I have a mobile hotspot I pay $55 a month for, and it also doubles as the internet at my home.
Line 28: Office Supplies – $20. You’ll be surprised how much stuff you’ll need, the dollar store should become your best friend.
Line 29: Postage & Shipping – $20.
Line 30: Rent – $400. The example for this came from a property I found for my $10,000 card shop.
Line 31: Sales Tax – $142.20. This is based on the California sales tax rate of 9.0% and my $1,500 in sales. Be sure to check with your state and county to know your tax rate.
Line 32: Telephone – $65. I am using Google Voice and saving money combining both my personal and business phone.
Line 33: Turbo Tax – $12.08. This is what I use to do my taxes and I find it easy to use. You may choose something else. The total cost for Turbo Tax is $144.96, but I split that out into a monthly cost so I can keep track of it on my profit/loss.
Total Income: $1,600
Total Expenses: $1,443.28
Profit Margin: 9.7%
A profit margin of around 10% is very typical of most sports card shops. One of the reasons why card stores have gone out of business is because they simply can’t generate enough revenue. There just isn’t enough people spending money on sports cards in your city to stay in business.
In this example, I would have worked for 30 days, and made a grand total of $156.72. I couldn’t live off that. I’m going to have to come up with some other ways to generate revenue.
Get a State Business License
This is actually remarkably easy. I was able to get my California business license in about an hour and it cost about $30. In some cases you can even get your business license online.
Here is a great resource for a state by state guide to the permits and licenses you’ll need to get for doing business in your state. If you open a brick and mortar store, you might have to:
Amazon Kindle Book can show you everything you need to know about getting a business license in your state.
How to get a Federal Tax ID number:
You are going to need a Federal Tax ID number when you do your taxes. The process of getting a Federal ID number is fairly easy and is best done online.
Apply for your Federal Tax ID here.
Once you have your ID number, you get one immediately by applying online, you will be able to use it to:
Some states require you to have a Federal Tax ID number in order to open a business license within their state. Check your local state regulations to see what is required for you.
1) Decide the Legal Structure to Your Business
This sounds daunting but it’s actually fairly easy. Most people opening a sports card store will fall under sole proprietorship or partnership. Here are various structures you can set up your business under:
This is all about taxes. If you set up your business as a sole proprietorship you will report your personal and business income taxes using one form. If you set your business up under an LLC your taxes became more complicated.
Some states require you to file legal partnership papers if your structure is a partnership agreement.
See this page for more information on legal structures.
My recommendation: unless you have more then two people in your business, or have been apart of an LLC before, go with a sole proprietorship or partnership. Your taxes shouldn’t be that complicated to figure out on your own using one of those options.
Once you begin to have success and make money, you can always change over to an LLC for tax purposes or to add additional owners to your business.