Este es el tercero:
Revealing my secret to profit for the first time...
Selling playing cards may appear simple—design a deck, have it printed, and sell it online—but the reality is much more complex. To create a successful deck and turn a profit, it's crucial to understand the business side of things. Unfortunately, I've seen far too many card enthusiasts and even established companies launch deck projects only to end up losing money. That, I would say, is never the desired outcome.
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In this email we’ll go over the different methods for selling decks, and at the end I’ll give you a very simple (yet seemingly never used) strategy to guarantee profit from your playing card project.
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METHOD 1: Retail Sales
Let's begin with the most obvious method for selling your deck: your own online shop - which remains the most popular option. While this process was much more challenging back in 2011, today it’s incredibly straightforward—you can set up an online store and have your products ready to sell in just one day. So, with that being said - there is no excuse not to have a sleek, modern, and well-organized website. User experience is key, and ensuring that customers can easily find what they’re looking for and check out smoothly is the first critical step. I would recommend using Shopify to set up your store - this is what we use for HOPC. They have inexpensive (and also free) templates you can install with just a few clicks so practically anyone can do it - and trust me, if I can do it then so can you.
Understanding Cost Per Deck
The first and most important step in selling your playing cards online is understanding your cost per deck. Each deck of cards will cost you a certain amount to produce at the factory - but this dollar amount that you pay will not tell the entire story. To keep the numbers simple, let’s say USPCC charges you $2.00 per deck - well $2.00 is not your entire cost. You need to then factor in other “hidden” costs. Did you hire a designer to design your deck? Do you have a fulfilment center that ships out your orders? How much does your website cost to run? Do you have employees? All these things will have to go into your cost per deck in order for you to fully understand how much money you’re actually making per deck. So let’s look at a scenario - you print 2,500 deck and paid $2/deck to USPCC. Your designer charged you $1,000 to design the deck. This $1,000 adds an additional $0.40 per deck ($1,000 divided by 2500 deck). Your warehouse charges you $1.00 to ship out each order - which, if you sell on average 4 decks per order will add $0.25 to your cost per deck. So a deck that initially cost you $2.00 to print now might cost you upwards of $3.00 - a 50% increase. Understanding what your real cost per deck is is going to be crucial for not only making profit but having a successful company.
Average Order Value
Next we need to dive in deeper into the numbers behind your online store. The key to any successful shop is to obviously sell more products in order to grow your business. This poses a very interesting problem when it comes to the playing card industry. The truth is that there are only so many customers available in this specific niche. At a certain point, you will stop growing in the number of customers you will have. This is where you will you need to focus on a different metric in order to continue to grow - the average order value. Average order value (AOV) is calculated simply by taking your total revenue and dividing it by the number of orders on your website. So if you launch a deck of cards, and you sell $5,000 worth of products throughout 100 orders then your AOV is $50. You need to know this number at all times. Your job is to get this average order amount up. So if your AOV is $50, your goal should be to get it to $75…then to $100…etc.
So how do we do that? Well, there are a few ways. The first idea is to offer bundle deals. You can buy 1 deck of cards for $15, but if you buy 6 decks then the price is $75 (only $12.50/deck). If you buy a brick of cards, or 12 decks, then the price might be $120 (only $10/deck). This will give your customers incentives to buy more decks, which increases your AOV, and this in turn will generate more profit. Remember, the number of orders will pretty much stay the same, however each order is increasing in dollars spent. The next idea is to have free gifts or tier prizes if a customer spends a certain amount on your site. For example - you can give away a limited or sold out deck if someone spends $75 on your site. This, again, will incentivize them to spend that extra amount to get the free deck. So if your AOV is $50, and we want to increase it to $75, then having a $75 tier prize is this is a great way of doing this. Be sure to understand your cost per deck as well as your AOV number to implement this effectively. I would use this strategy during the holidays in particular. My average order amount is around $75, so I would offer free tier prizes at $100, $150, and $200. This on average doubled my AOV. The last way to increase your customers order value would be to provide free shipping on all orders over a certain dollar amount. This one could be tricky - as shipping is very expensive, especially for multiple decks - however it can be a net benefit if done right. On HOPC we offer free shipping above $200. We won’t up-sell too many customers (who on average spend $75), but it definitely helps in increasing that ever-so important AOV number.
METHOD 2: Wholesale
When you wholesale your product, you sell them to other shops at a discount of 40% off the retail price. So if your deck of cards retails at $10.00, then you would sell them to other shops for $6.00. There are hundreds of different online card shops and magic stores all around the world. Your goal is to find the shops that sell playing cards and offer them your product. By broadening your reach, you will not only sell more decks of cards, but more importantly (especially in the beginning), you will get your deck in front of more customers. This is particularly important when trying to build a brand. You want your deck in front of as many eyes as possible. If your product is good, you’ll notice that shops actually contact you to buy your decks. You can expand this by finding more shops yourself. Do a search for playing cards and see what online shops sell decks. Remember, the world is a big place, so make sure you look for shops in different parts of the world. Almost every country in Europe has at least a few shops that sell playing cards. Same goes for Asia. With this network of shops, you can easily double the amount of decks you would normally sell by on your website, if not more.
METHOD 3: Distribution
The last way to sell your playing cards is through distributors. So what are distributors? Simply put, distributors distribute your product to shops. They buy your decks for 60% off and then sell those decks to shops for 40% off - making a profit of 20%. They act as a “middle man” in this regard. So instead of selling your deck to 100 different shops, and dealing with the logistics of all that, a distributor will come in and buy your deck in bulk and take care of the heavy lifting. The math would be as follows: if your deck of cards retails at $10.00, then you would sell it to Murphy’s for $4.00/deck. They would then sell the decks to shops at $6.00/deck. There are of course pro’s and con’s to this. The pro is that you are selling in bulk. Murphy’s might buy a few thousand decks. If your product is really great they might buy more. Also, you only have to deal with 1 company, rather than tens or hundreds. The con is, well, you’re selling it to them for 60% off. Knowing this, you can now see how important your “real” cost per deck actually is. If you are producing a deck of cards and your real cost is $3.00, and you’re selling the deck to a distributor for $4.00, then your profit is a mere $1.00 per deck. Even worse, if your real cost per deck exceeds the distribution dollar amount, then you might not make any profit at all - or even lose money on the deal.
HOW TO PROFIT
This brings me to my final point when navigating all this. How do we actually guarantee a profit when selling a deck of cards? Well the first idea is to pre-sell your deck before it’s produced. This way, you won’t have to worry about printing too many decks and not being able to sell them. If you take pre-orders, then you only print the amount that have been ordered. This, for the most part, will lead to profit. This is why a lot of people turn to Kickstarter to fund their projects. It solves two issues - using the money raised to fund the deck, and printing the correct amount of decks needed to profit. This strategy can work very well in the beginning, however this strategy can only go so far. As you grow and become more established, you’ll find there are more interesting ways to achieve the same results.
This is where “Purchase Order Guarantees” come in. A purchase order (P.O) is a document issued by a buyer to a seller indicating the buyer's intent to purchase specific products or services. Simply put, a P.O is an order placed for your product. So when you want to sell a deck of cards to a distributor, they will send you a P.O for a certain amount of decks. You then delivery the agreed upon amount to the distributor, and in turn invoice them for the product. The distributor will then pay the invoice at an agreed upon date after they receive the products. We can use this to our advantage by using the P.O to fund our deck project. This is essentially like pre-selling a deck without the hassle. So let’s say you want to print 2500 decks and that print run will cost you $6,000. Your goal is to get a P.O from a distributor for the (minimum) amount of $6,000. This will mean that you are selling just enough to the distributor for that money to pay for your print run. Any retail sales will be instant profit. Let’s do some quick math. If your deck will retail for $15, then the distributors price will be $6/deck (60% off $15, or $15 x 0.4 = $6). This means that you would need to sell them 1,000 decks to reach that $6,000 mark. Once you get this P.O, you can focus on your retail strategy to sell as many decks as you can on your website - all of which will be profit.
In tomorrow’s email, we’ll go over methods of getting customers to your website - including a very simple strategy that can be used to calculate and predict how much money you can make with each deck release.
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