Trading card scarcity puts margins on the rebound

Drug Store News, April 5, 1993

There is no shortage of young sport fans to fuel sales in the trading card category - but they aren't the only consumers. In the peak years for trading cards, speculators drove up number by gobbling new releases and even driving prices above suggested retail.

In the 1990s, however, excessive production created a glut and weakened the category. Add a player strike in 1992 to confuse the licensing picture and it wasn't a great year for trading cards.

That's changing, say manufacturers and buyers. The industry has begun to tighten up production and cut back on the size of different series. This year, for example, Topps' premium line Stadium Club will appear in three series for a total of 750 cards, down from 900 last year.

Buyers long for the old days when margins hovered around 45 to 50 percent, compared with today's mid-30s. A leaner trading card industry could yield better margins by creating more scarcity.

At the same time, picture and paper quality are superb, and exciting new graphics add zest to new product along with brighter inks, photographs, foil stamping and holograms. Inserts or "chase cards" - added as a random bonus to card packs - also create excitement and potential collectibility.

Another boon to the category is expanding sports categories. Baseball is far ahead, followed by football, but there is growing interest in basketball cards, thanks to good marketing by the NBA. Hockey trading cards are also growing in popularity due to increasing coverage on ESPN-TV.

Non-sports trading cards reach a different market, one less likely to include speculators. This growing segment plays on trends and movie tie-ins but can magnify the appearance of an overcrowded trading card assortment. For this reason, some drug chains merchandise sports cards separately - or carry them exclusively.

Hot, non-sports product can be profitable, though, like the Elvis Top 40 cards from West-port, Conn.-based River Group - or this summer's big film event, Jurassic Park, which is likely to spawn rash of dinoasaur card collectors. Dinoasaur are compelling for kids and offer a chance to master "fact" - just just like sports cards. These are the kind of cards that might help win new collectors for the sports card market.