Take a look at this article from last week's Wall Street Journal. Topps is planning to sell its trading cards direct and allow you to hold them 'in your account' rather than take delivery of them. You can then sell them directly on eBay at a later time. Give you any ideas for casinos selling "limited edition" chips? Eliminate the chip services <g>!

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June 29, 2000

Digital Collectibles: Topps Is Planning
To Hawk New Sports Cards on the Net
By JONATHAN B. WEINBACH and KEN BENSINGER
Staff Reporters of THE WALL STREET JOURNAL

Now it's virtual baseball cards.

After nearly 50 years of selling pro-sports cards at stores and stadiums, Topps Inc., the industry leader, is taking its wares to the Web.

On deck: a lineup of deluxe cards for sale on the company's site. Featuring everyone from Mark McGwire to unknown rookies, the new cards, dubbed "eTopps," will be issued over time on the Topps site in a process called "Initial Player Offerings." Buyers will be able to purchase a limited number of cards, which will sell for anywhere from $3 to $12 or even more for hot players. The company will then send the order to the customer, or, if the customer prefers, will hold the cards like stock certificates in a virtual portfolio for future sale via online auction giant eBay Inc.

For example, a fan might be able to buy a new Sammy Sosa card for $5 from the site, keep it online for several months, then sell it in an eBay auction for a potentially higher price in October. Topps says it will pay eBay between 1% and 5% of every new card sold.

The eBay alliance is also central to Topps's plans to auction its archive of autographs, rare photos and other sports memorabilia. "We'll be generating revenue by cleaning out our files," says Arthur Shorin, Topps's chairman.

Topps, based in New York, began selling cards in 1951 and for years distinguished its packs by packaging a piece of gum along with the cards. But after complaints that the gum was staining the cards, the company stopped including the gum. "The cards are still called 'bubble-gum cards,' though," says Mr. Shorin.

The shift to the Web comes at an important time for Topps: Despite the boom in pro baseball, industrywide sales for sports cards
have fallen 67% since 1991, according to Sports Collectors Digest, a trade publication. Publicly held Topps has managed to report strong revenue (sales soared 63% last year, to $374 million) mainly through the explosive sales of its Pokemon trading cards and candies.

"Pokemon is generating a tremendous amount of cash," says Catherine Jessup, Topps's chief financial officer. "But at some point Pokemon will go away."

None of Topps's competitors have announced plans to sell cards on the Web. Card suppliers like Upper Deck Co., Carlsbad, Calif., and Fleer Trading Cards LP, Mount Laurel, N.J., have chosen to maintain the existing distribution channels.

To spice up sales, they have stacked their decks with promotions: Upper Deck even inserted slices of a Babe Ruth bat into random packs two years ago.

Topps currently does no television or radio advertising for its sports products but is planning a marketing blitz to promote the new cards. Meantime, news of its Web foray may alienate some of Topps's biggest dealers and retailers.

If a card maker like Topps is selling directly to consumers online, "it's hard for us not to view them as a competitor and we'd have to rethink our relationship," says a spokesman for Wal-Mart Stores Inc., which stocks Topps cards in several hundred stores nationwide.