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Greetings again from the front line of the hobby!

Stopping to take a breath from a crazy couple of months to share some results and insights about our shops. Let's dig in.

We held a soft opening for our second shop on June 9 in Valparaiso, IN, then opened for regular hours beginning June 10. Our official grand opening event is scheduled for Saturday, July 9 and we're still waiting on some fixtures, etc, but we'll be ready.

Initial reaction and support from the community has been overwhelming to say the least. The shop has been busy daily, and we don't even have our sign up yet!

With no sales history in Valparaiso to compare, our initial goal is to double our total sales in each of the first 3 months. We knew we'd cannibalize sales from the New Buffalo shop since it's only about 45 minutes away, so we needed to look at the overall picture.

Prior to opening in Valparaiso, we'd been selling in the shop, on our site, at shows, on ebay, ISO Commerce and myslabs.

When we opened the second shop, we decided to pause selling on all 3rd party platforms and focus solely on our shop, shows and website sales.

So, how did that impact our numbers?

Well, for the entire month of June, we increased our total sales by 97% over last year. Keep in mind, the Valpo shop missed the entire 1st week of sales since we didn't open until June 9. All things considered, we couldn't be more pleased with those results, because.....

...during the same time period, we had 0 sales on 3rd party platforms, which means 0 fees. We did have shipping fees from transactions on our own site.

The key takeaway here is all the additional overhead (not including start-up costs) was less than the fees and shipping costs we've been paying when we sell on 3rd party sites. Beyond that, the new overhead represents a much smaller % to sales than those 3rd party fees and shipping costs.

A second shop also benefits our strategic partners by exposing them to a second customer base on a regular basis. Another spot to host athlete signings, another shop where they can meet collectors and market their shows and social channels.

If it's not clear by now, I'll spell it out. Our strategy is to focus on in-person sales and service and deliver a fantastic hobby experience to everyone we meet.

We'll accomplish that by continuing to focus on superior customer service, fair pricing, excellent selection, and a well maintained, safe & fun shopping environment.

Moving forward, we'll also be much more selective about how we utilize 3rd party selling platforms, which items we'll sell and how we price them.

Speaking of which, did you hear about Topps new Direct Store Agreements?

Topps/Fanatics put some new policies in place regarding how their direct account shops will need to sell and price their products going forward. Apparently, it created quite an uproar, so there was a subsequent conference call to clarify some of the points.

Overall, this doesn't impact us much at all. Here are some of the key points, and my thoughts on them.

1. Topps is going to allow shops to do breaks, but they want to ensure product is still available in the shops as well. We don't do breaks and don't plan to. No impact.

2.Creating a Topps section in our stores will also be easy. We're nearly doing that now. Piece of cake.

3. No selling B2B for 30 days on average. Topps may change that timeframe for certain products, and they will make sure everyone knows. No problem.....except......Not all shops are Topps MVP Direct accounts. Therefore, they aren't subject to these same policies. This needs to be cleaned up in one of two ways. Topps needs to make sure shops that are still being supplied by distributors abide by these same policies, or eliminate the two remaining 3rd party distributors asap.

4. Unilateral Pricing or Minimum Advertised Pricing will be implemented. This is an excellent idea, and is used by other card makers currently. This stabilizes fair pricing and prevents a race to the bottom and the dumping of product by certain sellers just to create cash flow. So, I'm all for it.....except......Again, shops that get all their Topps products from distributors can still price new products however they want. This has to be cleaned up as I said above or unilateral pricing will not be effective.

5. Sharing of data. We have a state of the art POS, Inventory Management and CRM system in place at both shops. We already capture sales data by category and brand. Sharing that data with Topps will allow them to see what's working and what's not in the shops they sell to. Their stated goal is to drive traffic into our shops and this will help them do that. We can tell them about sales by category, sports, box/pack configuration, time of day, day of the week, etc. The data already exists, so we'll put it to even better use. In fact, here's some interesting data from our first month of sales at the Valpo shop:

Sales by category ranking for June 9 - June 30

1. Soccer boxes and packs (Immaculate Soccer release put this category over the top)

2. Football boxes and packs

3. Singles (This is especially encouraging, given the price drop across this category in the last year)

4. Baseball boxes and packs. (The lack of new releases in the past 6 weeks hurt this category)

5. Basketball boxes and packs

6. Supplies

7. Hockey boxes and packs

8. Memorabilia (this category is always much stronger during months when we host athlete signings)

9. Toys (hot wheels, funko pops)

I promised to take a look at margins in an upcoming article, but I thought this month's shop opening and the impact that had on our business was more interesting. I hope you enjoyed it. I'll talk about margins next month.

See ya soon!


Rex Gotcher

-- Head Coach The Sports Card Shop219-615-9206


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