MaxMan101 Sports Cards

How We’re Using Our Profits to Build and Sustain Our Sports Card Business

In the world of sports card selling, maintaining a healthy profit margin and reinvesting wisely are key to growing a sustainable business. We’re transparent about our strategies and how we utilize the profits we generate to strengthen our operations and future plans. Here’s an inside look at how we’re using our profits to not only build inventory but also plan for long-term growth and flexibility.

1. Our Profit Target

First, we set clear expectations for every sale: we aim for at least 20% profit on each item sold. This benchmark ensures that each transaction contributes positively to our growth and overall financial health. This margin isn’t just an arbitrary number; it’s a safeguard that ensures we can have a positive cash flow, invest in our business, and take advantage of future opportunities.

2. Reinvesting in Inventory

A large part of our strategy involves reinvesting the cost of the card itself into more inventory. This cycle of reinvestment helps us maintain a robust selection of sports cards while growing our offerings. Building a well-rounded inventory allows us to attract more buyers and respond to shifts in market demand. We went from a few hundred singles worth $400-$500 to an inventory valued around $9K in less than a year.

3. How We Allocate Our Profits

We have a structured approach for using our actual profits. Here’s how we break it down:

• 10% for Max’s Car Fund: We take 10% off the top and allocate it to Max’s car fund. It’s important for us to use some of our profits to work toward personal goals, adding a motivating factor to the business. He is 11 and putting this money into a mutual fund will be great long term.
• 20% for Administrative Costs: This portion covers essential expenses such as website hosting, subscription fees, marketing efforts, and any other necessary overheads that keep our operations running smoothly. We are pretty small, so this is roughly $30 per month currently.
• 40% Reinvested into New Inventory: To keep growing and stay competitive, 40% of our profits go straight back into acquiring more sports cards. This strategy helps us expand our collection and keep our offerings fresh and attractive to buyers.
• 30% for the Opportunity Fund: The remaining profits are funneled into an opportunity fund. This flexible pool is essential for unexpected purchases, grading card submissions, and acquiring equipment like label printers. It allows us to seize opportunities as they arise, whether it’s an unplanned purchase of high-value cards or investing in tools to streamline operations.
• You could easily tweak these numbers to match your particular strategy. Currently, we do not need any of this money to “survive” off of, so we can afford to dump it all right back into the business. When Max is ready to make this a source of income, the plan is to pay him set salary of 15% of the average monthly profits for the previous year and then a commission on top of that. The rest would go back into the business.

4. The Bigger Picture: Building for the Future

Our current focus is on building a substantial, fully paid-for inventory. Once we achieve this milestone, our strategy will shift. We plan to reduce the emphasis on inventory reinvestment and increase contributions to the opportunity fund. This will enable us to explore other avenues for growth, such as diversifying product offerings or investing in enhanced marketing strategies. Over the fall and winter, we have been clearing out the bank account buying wax for the spring and summer selling season. We have spent $6,056 to acquire boxes and packs from 2017 to 2024 with a current retail value over $9K.

Why This Strategy Works

This method allows us to balance sustainability with growth. By ensuring that a significant portion of our profits goes into reinvesting and covering operational costs, we maintain a steady foundation. The opportunity fund, meanwhile, gives us the flexibility to act quickly when valuable or strategic options present themselves. The challenge for us is that Max is in middle school and sells primarily over the summer. I only help out to keep him legal and do not sell…although I might in the future. Therefore, we are like squirrels stocking up for when we need it.

If you were to use a similar strategy to sell year round, this is a great method to build inventory as you are selling. I have ran projections to show we would have triple the cashflow at this moment in time. We went from $400 in inventory to $7,393 in revenue in 7 months and most of that was over the summer. You could easily build this into something much bigger as long as you focus on the profit margin of what you are selling and carefully focusing on where-and how-you are using the money you bring in.