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Teenvestors often start their businesses because they have hobbies they want to explore or creative talents they want to share with other people. Quite often, these young entrepreneurs don't even think about the money they might make with these hobbies or talents. But at some point, they realize that they can indeed turn their interests into profit.

The article below was written by David Leopold of D&L Collectibles when he was 17-years-old. I ran into David at an entrepreneurship conference many years ago and I asked him to take me through the process of how he started dealing in sports collectibles. David is probaby grown up now but here is something he wrote to us when he was only 17 years old.



by David Leopold, Founder of D&L Collectibles (Age 17)

I am a sports fanatic. For as long as I can remember, I’ve always read the sports pages in the newspaper everyday. Like most preteens who loved sports, I collected baseball cards. I would go to supermarkets and baseball card stores to buy packs of cards. ......, I had accumulated several thousand cards, which cost me approximately $100. My mother told me to get rid of them because they were taking up room in my closet. I had always replied that they would be worth something one day. Finally, I decided to take these cards to a nearby baseball card store. Much to my surprise, they were worth about $350, which to a 13 year old is like winning the lottery. Because I’m such a sports enthusiast and love, follow, and play baseball, I decided to start a little business.

My parents have always tried to support what I wanted to do, and this was no exception. They allowed me to use the money I had made from selling my cards to start my business and were also always willing to help me out financially if I needed the aid. They provided me with transportation and always gave me encouragement and praise.

Today, my business, D & L Collectibles, has between 400,000 and 500,000 cards with an annual budget of about $6,500. The sports card hobby—basketball, football, baseball, golf, and hockey cards—has grown in popularity and profitability. It has become a market with sales of over $1 billion annually. More and more card producing companies enter the market every year in a constant attempt to provide the collector with a better and more valuable card. A card’s value is determined by its scarcity, the player’s popularity, and the player’s talent and statistics. Usually a player’s rookie card is the most valuable unless scarcity becomes an issue.

Although it remains a business, I’m not involved in this business just to make a profit. I simply love all sports as well as my business. Not only do I run my business, but I, along with my stepfather, have accumulated an individual collection outside of my business. This, combined with my business, helps fulfill my love for baseball and other sports. It provides me the facts and statistics I’ve followed and studied for years. My business should not be confused with a scheme just to make money.

My business is comprised of buying, holding, and selling sports cards, especially baseball cards. I do this by advertising in hobby magazines and by purchasing and selling cards through mail order. I do the bulk of my business at card shows. At these shows, I rent a table on which to display my cards. These shows are held in gymnasiums, hotel ballrooms, and expo centers. Usually organized by another dealer, the shows charge an admission fee for collectors to look at and purchase cards that are displayed by the dealers. Profits can be made by buying old or new cards and holding them for a few years thus allowing them to appreciate in value. Some cards’ values can grow as much as 30% to 40% annually. Once these cards increase in value, they are resold at a healthy profit to a collector. Profits can also be made by buying new cards in large quantities from wholesalers and producers and reselling them within a matter of weeks to collectors in smaller quantities for a 10% to 20% profit.

This year, my parents have helped me create a budget. Once I presented it to them, they lent me the money for the year that is to be used for my business. This money, $5,000, along with my remaining profits from the previous year, $1,500, has become my budget for this year. After the first six moths of this year, June 15 to November 15, I have spent about $3,600 of the money in my budget. In the first six months I have gross sales of about $7,300 and made a gross profit of about $1,700 before taking out a salary. I’ve put about $8,000 into my current inventory over the past three years. This inventory has appreciated to a value of about $12,000. My inventory and my profits have been attained by purchasing some old and mostly more recent cards. The cards that have been sold have resulted in my profits for this year while the cards that have appreciated in my inventory will provide me with future profits.

My business has been an incredible learning experience. It has shown me a lot about gross profit margins, net income, cost of sales, and fixed overheads. It has also taught me how to relate to people in a business sense as well as the importance of trust and respect in business.