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The Magic Cafe Forum Index » » Tricky business » » Dealer Profit Margin on Magic? (0 Likes) Printer Friendly Version

Tim Friday
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I would like to learn more about how much profit margin is possible from selling magic tricks by selling them at retail prices after getting them from a distributor. What are the numbers?

It seems like there is no way to find this out from Murphys unless you know a dealer or someone on the inside who will share. The problem with this is if you are not able to learn about the margins how can you write a business plan?

The only thread I have found with numbers is this helpful reply from Dan Harlan: http://www.themagiccafe.com/forums/viewt......tart=0#2

I have heard that scum magic offers the best margins but I don't know anything for sure because the info is not available. I have also heard that books and most tricks offer very little margin. It seems like the online dealers that have "made it" produced a line of their own products. These obviously will have a considerable higher profit than anything they resale after getting it from the distributor.

Please share, what are profit margins on magic tricks? Maybe you know from experience or rumor, please share...
TomBoleware
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Hattiesburg, Ms
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40 to 50 percent on average. Maybe a little more on slum, and tricks you produce yourself.

Sounds like a lot but after you take out shipping costs, taxes, etc, it's not much.
Especially when you consider how small the magic trick market is.

Nope, you don't see a lot of rich magic dealers.


Tom
"Entrepreneurs are willing to work 80 hours a week to avoid working 40 hours a week"--Lori Greiner

www.tomboleware.com
dearwiseone
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Portland, OR
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Tim,
Great question, it might be helpful to clarify a little bit. The number really depend on what you're looking for, and they're very different from each other.

Are you looking to open something like a magic shop?
Are you just looking for items you can sell after your shows (Back of Room sale - BOR)?
Are you talking about up-selling moms birthday magic tricks?
Are you looking at selling on Ebay?
Are you looking to become an online dealer with your own line of products?

I ask because each scenario is a bit different. For example, I make great markup on magic wands, selling them retail, but I'm in the online/birthday party business when I'm selling those. Printing your own books can yield markups of over 100%. Again, I sell those after shows.

Typical markup for magic retailers is 40%, I believe. This means a typical retailer will add 40% to the item they just purchased from the wholesaler.

Books and tricks can offer great return, it just depends on which route you're going. Obviously products that can be sourced from China and purchased in bulk quantities have the highest percent markup. This is why so many online retailers are starting to purchase from China directly, and not going through typical venues like D. Robbins and Murphy's.

If you give us a few more specifics, I'm sure we can help with some numbers!

Hope this helps a little!
Kevin
TomBoleware
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Tim, I failed to mention that I based my post on experience.
I owned a toy/novelty/magic shop for ten years.
Been a while back but I'm sure the numbers are still about the same.

Tom
"Entrepreneurs are willing to work 80 hours a week to avoid working 40 hours a week"--Lori Greiner

www.tomboleware.com
Tim Friday
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Tom and Kevin, thanks for the info. I never would have guessed it be 40%, I would have guessed much less.

Kevin, I believe there is potential in focusing on selling in three areas:
1) Online from a site I create for the purpose of selling magic
2) Sell in person regionally by setting up meetings for magicians, similar to the Mary Kay business approach. Not at IBM or SAM meetings because selling magic is not the purpose of those meetings in my area.
3) Sell at regional magic conventions

I am against the idea of a brick and mortar shop because there are too many expenses and I don't want to have to set hours because I have a day job. Maybe a shop would be possible later down the road but starting out I would be extremely shrewd.

So the focus would be on building a regional customer base of magicians and building relationships with those customers. One problem I get frustrated about is so many of the leading websites are based in CA, so unless I am willing to pay extra for overnight or 2 day shipping, it takes a week or even longer for an order to arrive. I believe a regional customer base would appreciate having their order arrive quicker and this is possible because it would be regional.

It would have to be selling as a dealer because I don't have any products I have created to sell. But I have over 10 years experience in outside field sales.

Kevin, does this give you more of an idea of the way I am thinking?
dearwiseone
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Portland, OR
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Tim,
Yep, that helps. So you're selling to magicians in your area and online.

Like Tom said, 40% sounds like a lot, but it's not much at all!

It's not my first choice in a business, but it might work for you. If you live in an area where there are lots of magic conventions year round, it might be nice. What will differentiate your online store?

It's a hard business, not my cup of tea, but if you come up with a solid business plan, it could work. I know it has for many!

I highly recommend getting "Marketing Magic" by Maxwell Murphy. Check it out here: http://www.penguinmagic.com/p/2787

- Kevin
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