Sports Memorabilia Business Plan
Jerseys R Us (Jerseys) is a Massachusetts-based collectible sports jersey store. Jerseys focuses on offering famous player baseball, football and cycling jerseys. Jerseys is an existing business that is being purchased by Phil Garment. Jerseys will reach profitability by the end of year one and will modestly generate profits for future years.
The sports collectible market is huge, particularly for sport jerseys. The ages of collectors ranges from young kids to grown adults. With the growing popularity of eBay, sport collectible trading has become even more popular with a much more open market. Jerseys has segmented the market into two niches, children and adults. In general the children are most interested in the baseball and football jerseys with the adults showing primary interest in all three.
Jerseys R Us has recognized three keys to success that will be instrumental. The first is having a comprehensive inventory. This will serve as an attraction to get many people browsing the store for what is for sale. The second key is to listen to customers. Having an active feedback loop will be essential for Jerseys to exceed customer expectations. The last key to success will be to implement and adhere to strict financial controls.
Jerseys’ competitive edge of inventory will be leveraged to quickly grow sales. The inventory is an advantage for two reasons. First, it is very comprehensive, much more so than its competitors. Second, having a constant turnover of inventory will also be effective in increasing the times that an individual customer will come back to Jerseys to check up on any new products.
Jerseys R Us is owned and led by Phil Garment. Phil is a lifelong sports fanatic. He is passionate about sports which is clear just from speaking with him. After receiving his undergrad degree, Phil went to work for a leading sports marketing firm where he developed an incredible web of networking contacts. These contacts are instrumental in getting access to rare, hard to find jerseys. Phil also received great project management skills from the experience. To bolster this work experience, Phil studied for an MBA, providing him with the requisite skills for running a business.
It is Jerseys R Us’ mission to be the premier jersey collectible store. This will be accomplished by offering a wide selection of fair-priced jerseys and ensuring complete customer satisfaction.
1.2 Keys to Success
- Having a comprehensive, worthwhile inventory.
- Listening to customer feedback.
- Follow strict financial controls.
- To be the premier sports jersey collectible store in the Mappleton area.
- Have constant turnover of inventory encouraging customers to come in often.
- Be known for excellent customer service.
Jerseys is an existing business that is being purchased by Phil Garment. The business will be a sole proprietorship. The business is being sold because the previous owner is ready to retire. For a lump sum, the lease will be transferred and Phil will receive the current inventory as well as the good will of the business. The name will remain the same and the inventory will also be similar, however, in addition to baseball and football jerseys, Phil will stock cycling jerseys as well.
2.1 Company History
The business began as Jerseys R Us back in 1980 by Chuck Jack. Chuck is ready to retire and was looking to get a bit of cash from his business, recognizing that a large portion of his retirement account will be supplied by his wife’s pension.
2.2 Company Ownership
Phil Garment is the sole proprietor.
Jerseys R Us sells famous players’ collectible sport jerseys, typically from baseball, football, and cycling. There is a huge market for famous player jerseys, especially in Massachusetts which has rabid sport fans. The products will be procured through two sources, the first is personal networking, the second is eBay. While some customers might actually wear these previously worn jerseys, most are purchasing them as a collectible that they will put on display.
Market Analysis Summary
The sports collectible market is huge, particularly for sport jerseys. The ages of collectors ranges from young kids to grown adults. With the growing popularity of eBay, sport collectible trading has become even more popular with a much more open market. Jerseys has segmented the market into two niches, children and adults. In general the children are most interested in the baseball and football jerseys with the adults showing primary interest in the cycling jerseys.
Jerseys will employ different strategies to market itself to the two different market segments. While Jerseys will use an active marketing strategy, they will also rely on walk-by traffic as an excellent source of walk-in customers.
4.1 Market Segmentation
Jerseys will be targeting two distinct types of customers. Each one has its own distinct demographics.
- Children: these are kids typically ages seven to 15. They often participate in sports but are also caught up in viewing/following of professional sports and enjoy collecting memorabilia. While this group does not have significant amounts of discretionary income, a function of their age, they typically do get an allowance and save their money for purchases relating to sports.
- Adults: this market segment is typically very active in sports, they either play sports or follow it religiously. To them, nothing would be better than to stay in front of a TV for the entire Saturday or Sunday watching all the different games that day. Sixty-five percent of the adults that collect memorabilia began as a child and have continued into adulthood. The average income of this group $45,000. Fifty-five percent have at least some college education. This group enjoys to watch sports, while most of the observations occur with the TV, this group views live sports at least 10 times a year.
4.2 Target Market Segment Strategy
Jerseys recognizes the need to try to communicate to both segments of the market and that a campaign must be developed separately for each group. Of the advertising that Jerseys will be undertaking, some will be utilizing magazines with primary child readership demographics for the child market, and adult publications for the adult segment. To attract additional child attention, Jerseys will also sponsor a few little leagues to ensure a presence among the children. The walk-in traffic of the store will be primarily adults as the store is located in a busy commercial retail area of the city and while some children do walk through the city browsing, the walk-in traffic will be primarily adult.
4.3 Industry Analysis
The sport collectibles market is made up primarily of mom and pop stores. There are very few larger stores or chains. This is the case to a large degree due to the fact that the products are used, one of a kind items. They are often hard to come by, thereby limiting the ability of a larger store to buy larger quantities, leveraging scales of economy.
The popularity of eBay has significantly increased the quantity of trades in the U.S., opening up the market for a much larger audience. While the market has opened up significantly, prices have seemed to rise. It can be speculated that the prices have risen due to the phenomenon of a bidding frenzy where people get all worked up about winning the auction and bid irrationally, relying on emotion to guide them through the auction. Because Jerseys has inside market knowledge, it is able to avoid the auctions that are unreasonably high and concentrate on the auctions that have gone unnoticed and are soliciting low bids. The high bid phenomenon of eBay therefore supplies a steady stream of customers to Jerseys because the customers are looking for reasonable prices, as well as the ability to touch ad feel before they purchase.
4.3.1 Competition and Buying Patterns
Jerseys R Us faces two sources of competition:
- Local sports collectible retail stores. There are two other retail stores in the city, however they tend to concentrate more on equipment than clothing.
- eBay. This is a good source for the same products that Jerseys’ sells, however, prices are not always reasonable.
The buying habits of customers depends to a large degree on age and amount of knowledge they have regarding the market. The younger the customer, the more likely they will want to touch and feel what they are buying. The older the customer, the more they are willing to rely on a description of the item for their purchase as opposed to needing to see it in person. Additionally, the more information they have about the market, the more confident they are about bidding or buying something somewhat unknown since they can speculate its worth.