Bob Walter, a co-owner at Sam Sloat Coins, Inc., a leading dealer in rare coins, sports memorabilia and political memorabilia, knows why so many people who try to turn a hobby or passion into a business so often fail: "Their heart wasn't really in it."
That and they didn't understand the business or their customers he adds.
In discussing why so many sports memorabilia businesses failed in the 1990s, Walter explains: "They couldn't make money because they did not know how to take care of their customers. You have to be honest with your customer, sell a product that has value, and offer customer service. You have to be fair."
You've also got to have heart.
Heart + Dedication = A Successful Business
Nancy Bundy's story is a classic tale of how a person with a hobby can turn it into a business and the role the Internet plays in that business. While separating from her husband back in the early 1990s, Bundy took up polymer clay (which many people know by its brand name, Fimo) as a hobby.
Bundy enjoyed working with the hard, but pliable, substance and found she was good at it, making all sorts of jewelry and decorative pieces. As her passion grew, she joined the National Polymer Clay Guild and once a year went on a retreat with other polymer clay artists. Shortly thereafter, Bundy met Bob Paris, and he too joined the guild. In 1996, they turned their mutual hobby into a full-time business, Affinity Clay.
An instant success, Affinity Clay went on the road, with Bundy and Paris going to arts and crafts shows across the country in their motor home. They would be on the road half a year, often far from their home in Florida. Business was booming but the couple felt limited in their reach. So in December 1998, Paris took a class in HTML and put up a simple Web site.
"Our customers were requesting it," says Bundy. "They wanted to see the work, and our wholesale customers wanted to be able to see us and order from the site."
"If you don't have a Web site, you're limited to the people that you might have in front of you in your booth at a particular show," adds Paris.
Bundy and Paris still went to shows, giving out slips of paper with their e-mail address as well as their URL on the piece of paper that came with each Affinity Clay creation. Business continued to pour in, but the Web site languished whenever the couple was on the road.
"We left a notice on the Web site telling our customers to just call us directly on our cell phones, because we were away from the computer," says Bundy. "That worked pretty well."
But Paris, who was the Web master, knew that in order to continue to thrive they had to do a better job of keeping the Web site up to date and staying in touch with their far-flung customers - an absolute necessity when you are a small online retail business. So, last summer, they purchased a broadband air modem for their laptop.
It is Paris and Bundy's hope that they can cut back on the number of shows they attend and focus more on selling on the Web.
As Paris explains, "When you sell an item from the Web site, you basically get full retail value. Whereas when you sell an item at a booth at an art show in Michigan, there are travel expenses, the show fee, etc."
Adds Bundy, "With gasoline and other expenses going up, the more business we can do off the Internet, the better."
One Man's Hobby, Another Man's Business
For most people, coin collecting is a hobby. They get into it as a child or as adult, maybe even going to the occasional show, but most don't turn their passion into a full-time job. For Bob Walter, however, it's the only business he's ever known.
In the summer of 1972, Walter was working at a car wash when a customer paid him in strange-looking paper money. Intrigued, Walter bought the scrip from the car wash for around $10 and took it to a local coin shop. The store immediately purchased the currency and paid Walter $90 - more than what he would have made in a week at the car wash.
With the advent of the gas shortage, Walter was laid off, and immediately he began scouring coin shops, antique stores, auctions and flea markets for coins. He had a good eye and quickly made a profit. After briefly going into business on his own, Walter became a partner at a small coin shop and a few years after that joined Sam Sloat Coins.
How the Web Can Help
"Collecting coins has been a hobby as long as there have been coins - over two thousand years," says Walter, and the business of collecting is always changing.
"The most recent change in our business is the Internet," he explains. "It used to be that you would fly all over the country [a bar to entry for many people]. There's generally a large coin show someplace in the United States every weekend. It's good to do the business face to face, talk to the person and handle the coins, but you don't have to do that anymore. You can go onto eBay or the Internet and transact business with people all over the world and at every level."
|Tips for turning your hobby into a business:|
1. Ask yourself, "Is this something I really enjoy doing and can sustain, or am I just swept up in the latest craze? (Think Beanie Babies and Magic cards.)
2. If you think your passion or hobby still has potential as a business, try to find out if lots of other people are doing it - who or what the competition is. What is it about your offerings that are unique or hard to find? Is this something people really want?
3. If you are planning on selling online, make sure you have enough money to invest in creating and maintaining a decent e-commerce site - and make sure your site is being picked up by the major search engines (which may require some advertising).
4. Remember, the customer is king (or queen). Don't underestimate the power of customer service or how a lack of customer service can cost you sales.
5. Network with other hobbyists or dealers.
6. Have fun. Once you lose your passion or drive, what made you go into this in the first place, you're going to lose business.
That's why, in 1999, Water, now a co-owner of Sam Sloat Coins, put up his first Web page. Soon after that, after deciding for business reasons not to go to the Florida United Numismatists - or FUN - show, Walter decided to plow the $5,000 he would have spent on the show into computers, a network and a presence on eBay.
As Walter recalls, "We got a large map of the world and put it up over the server, and every time we would ship to a different country, we would stick a pin in there. Since that time we've had three different eBay companies and we've made over 15,000 sales on eBay."
But, with eBay, sales are not what they once were. With more people doing their research and shopping online and the hurdles to doing e-commerce becoming lower and lower, Walter decided to invest in a professional-looking Web site - "with good graphics, good, secure shopping carts, something where it would be easy to add items and take items off as they are sold."
Not a designer or Web expert himself, Walter hired a designer to design the site and another company to host it - and the site took off. In fact, Walter is currently upgrading it to keep up with business (which they still transact on eBay too).
So How Do You Make Money?
"There are a lot of different ways (to make money)," says Walter. "One is if you find a niche market. There's nothing special about the coin business. It's like any other industry out there. You have to find items that somebody else wants to buy. Or you have to find an item and tell people why they should buy it. All you have to do is find that niche."
You also have to really know your business - and how much people are willing to pay.
"There are a lot of hurdles in the coin business. One is knowing the coins, knowing that a coin is genuine, knowing the correct grade of the coin. That will determine the value of the coin. Also, it tends to take a fair amount of money to get into the coin business, because you need an inventory - and the markups that coin dealers work on are not the same as other industries."
A jeweler, says Walter, will typically mark up items 300 percent, and buy them on consignment. A typical coin dealer often works on less than ten percent. And as with any valuable product, you have to protect yourself, your stock in trade and your customers from theft - which means investing in security and insurance, whether you are selling online, offline or a combination of the two.
The Secret to Success
The secret to Sam Sloat Coins' success, says Walter, "Is that we try to treat people the way that we'd like to be treated ourselves. We've never pretended to be the lowest priced store. We've never pretended to be the highest buyer. We've always given everybody a fair deal, a fair shake. We always take time with our customers. We try to make sure they're getting the right item. It really just comes down to customer service - whether it's in our store, on the telephone, or on the Internet."
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