Stacking the Deck

    Dean Hanley built his Internet baseball card business one memory at a time.
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    In the summer of 1969, 5-year-old Dean Hanley bought his first packs of Topps baseball cards at the Ben Franklin five-and-dime in White Oak. Back then, each nickel pack included a stick of bubble gum and five cards. Dean tore his open and discovered an unbelievable haul: not one, but two Pete Rose All-Stars—a double, in collectors’ lingo. Landing two of the best player on the hometown team was like finding a pair of diamond engagement rings in a Cracker Jack box. When Dean showed his mom, she told him to go make a trade; she knew that standard operating procedure dictates swapping doubles to build a complete set. Thirty years later, Hanley would start one of the country’s largest online sports card stores, DeansCards.com, with more than a million cards in its inventory. But his first transaction would not foreshadow that success.

    Young Dean ran down the street to a friend’s house. “Hey, I got two of these,” he said. “Take one!” When he returned home, his mom asked what bounty he had acquired in exchange for Charlie Hustle.

    “I didn’t know how to trade,” Hanley says, shaking his head at the memory. “I got nothing. I was so dejected.”

    As a kid, Dean built his collection with help and encouragement from his dad, Jack, a collector himself. His childhood experience illustrates why vintage baseball cards hold such sentimental value for men of a certain generation—and also why there are so few of them in good condition. Dean played hard with his cards; they were toys, not investments. When Pete Rose moved to the outfield, Dean tore off the corner that listed his position as second base. When a fight broke out over whose cards were whose, Dean’s mom made him mark initials on his. With that level of abuse, his childhood sets are now worthless.

    But Hanley wouldn’t change a thing. He learned geography by locating baseball cities on the map, math by calculating batting averages and ERAs, and honed his reading skills studying player bios. He and his friends spent their days memorizing statistics, using their cards to play imaginary baseball games, trading them, and putting them in the spokes of their bicycles to simulate the sound of motorcycles.

    “It was our socialization,” Hanley says. “It was a good time. You collect these, and you kind of go back.”

    Leap ahead to 2000: Hanley became a casualty of the bursting tech bubble. He was laid off from his job as product manager for a line of software tools at Computer Associates. Facing more free time than any ambitious adult would prefer, he decided to get back into his childhood hobby. He was surprised to find few, if any, online stores selling vintage baseball cards. The Internet trade seemed to be concentrated exclusively on eBay, whose auction model Hanley found unappealing. “I want to go on once, buy it, and get it,” he says. “I don’t want to wait six days and get outbid by somebody in Des Moines.”

    Hanley had recognized an opening in the market but worried about the risks associated with starting a business. When he talked about his idea for an online store with friends and neighbors, they laughed at him. “Yeah, I thought maybe he was having a little bit of a midlife crisis,” says his wife, Valarie, “but I figured as long as I was the girl in the red Corvette, it would be fine.”

    As Hanley saw it, he possessed a unique set of skills—combined expertise in card collecting, sales, and technology—that would give him an advantage online. As the software industry went sideways and his job prospects didn’t improve, Hanley decided in December 2000 to fully commit to creating Dean’s Cards. Valarie went back to work and told her husband he had two years to prove he could support the family.

    Hanley didn’t bother asking the advice of established dealers until he had already been working on the project full-time for a couple of months. When he finally did pick the brains of the old guard that had dominated the industry for decades, they were dismissive. No small business could compete with eBay, they reasoned. And anyway, the industry had peaked in the ’90s. No startup could survive. “All of the old-time dealers didn’t see the vision,” Hanley says. “Thank God for me.”

    It took several months of toiling in his basement before his website was up and running. He didn’t make his first sale until May 22, 2001, and it wasn’t until his third year that he made a profit. But today Hanley has seven full-time employees, a 1,500-square-foot office space in Oakley, and hundreds of orders a month.

    To understand just how unlikely that outcome was, it’s worth taking a quick trip through the history of the hobby. Baseball cards first came to prominence in the 19th century as a way to promote various products. Tobacco companies marketed the most prominent of these early sets, ostensibly in an attempt to hook children on cigarettes. Buck Duke (whose family is the namesake of Duke University) and his American Tobacco Company issued the famed T206 Honus Wagner card in the early 20th century. The T206 is the sterling example of  how scarcity and narrative can combine to give baseball cards value. As history has it, ATC had distributed only a hundred or so when The Flying Dutchman himself—the Pittsburgh Pirates legend; the greatest shortstop of all-time—forced the tobacco company to halt production. Why? One explanation is that he objected on moral grounds; the other, that he wanted more money. Either way, the story and the scant supply made the T206 incredibly desirable. The most valuable was sold to a private collector in 2007 for $2.8 million. 

    The modern history of baseball cards, from the first Topps sets in the 1950s, has followed Baby Boomers through the aging process. In the ’50s and ’60s, the cards were marketed to the young boys who were suddenly everywhere. Hanley loves to quote a study from the ’60s that said 89 percent of American boys collected baseball cards. They were cheap and easy to come by; every kid had stacks and stacks in the clutter of his bedroom. And when those millions of boomers went off to college, their millions of mothers threw them out.

    In the ’70s and ’80s, those boys became young men and were miffed at mom for trashing their treasures. They started collecting again, but now with more disposable income and far less patience for tearing open dime packs and making trades. Topps altered its business model to meet their needs, selling complete sets starting in 1974. Vintage cards became so valuable that it wasn’t in boys’ financial interest to play with them anymore. “Kids stopped putting them between the spokes of their bikes and started putting them in protective holders,” Hanley says.

    A slew of manufacturers and collectors flooded the market, all of them looking to get rich quick, the three deadliest words in business. Hanley was working as a stockbroker in the late ’80s and saw several people “investing” in baseball cards, buying thousands of dollars’ worth hoping their value would skyrocket. A couple of years later, while working on his MBA at the University of Southern California, Hanley wrote a baseball card business plan for a class. He concluded that the barriers to entry were too high—the old-school dealers too well-established—to enter the market.

    That proved to be wise, because the house of cards was about to come crashing down. It’s the classic catch-22 of collecting: Everyone wishes they had kept their cards from the ’50s because of how much they are worth today. But if everyone actually had kept them, they wouldn’t be worth anything. In the ’80s and ’90s, companies were producing millions and millions of cards and everyone kept them, hoping to cash in. There wasn’t enough demand to meet the skyrocketing supply.

    It was in the context of this collapsed market that Hanley decided to start his site. Listening to him explain how he made it work is both fascinating and entertaining. He mixes business jargon (using  “scale” as a verb), folksy idioms (“I’ve come a long way around the barn,” whatever that means), and analogies (comparing the parts of his company to the legs of a stool) to make building his business sound easy.

    He says his target demographic is “middle-aged American guys looking to relive their childhood.” Basically, guys like him. And what guys like Hanley care about is simple: speed and accuracy. A business plan so easy a caveman could do it. But behind his buzzwords, Hanley is hiding a master’s understanding of how to use the Internet for profit.

    “When Dean started, the baseball card hobby was definitely off its high of the 1990s,” says Tom Bartsch, the editor of Sports Collectors Digest, an industry publication for which Hanley is a contributor. “Prices were starting to tumble and the card market lost some customers. But Dean did it right, following the trend online.”

    The web-only model gave Hanley two key advantages. First, he could cater to a national, or international, clientele. The hobby was no longer big enough to sustain shops in a city the size of Cincinnati, but there were still plenty of collectors across the country looking for vintage cards. In fact, focusing on vintage sets, for which demand remained strong despite the devaluation of modern cards, was probably Hanley’s best decision of all.

    Second, the wonders of the Internet allowed Hanley to keep his costs, aside from acquiring inventory, at a minimum. He didn’t have to open a physical store or even rent office space (for the first few years, he operated from his basement in Mariemont). He didn’t print catalogs. Once Dean’s Cards became large enough that Hanley needed a staff, he listed openings on free services like Craigslist rather than paying a temp agency.

    Because Hanley has a small team with only a couple of people handling the phones, it was important that the website keep customers informed and satisfied so they wouldn’t feel the need to call. To that end, he grades the condition of cards (with ratings ranging from poor to mint) more conservatively than the industry standard to keep returns at a minimum. People calling to haggle prices would be a burden, so he simply doesn’t do it. Ever. Bargaining is a long-standing part of traditional shows, but Hanley doesn’t hide his disdain for it. “I don’t mind paying a certain price, but it makes me mad if I pay five dollars and you pay four, just on principle,” he says. “You’re expecting me to dicker to get a dollar off? Why don’t you just give it to me?” And if he tries to avoid customer calls, he really doesn’t want people to stop by in person—though occasionally a confused old-timer or family drops by his office, not fully grasping the online-only concept. “Sorry, we’re not a store,” he tells them.

    Another reason Hanley has survived is his conservative approach to growth. He started out working alone in his small basement, despite repeatedly smacking his head into low hanging vents and ducts in the cramped space. He even asked his dad for his doubles, so Dean wouldn’t have to buy too much inventory early on. Eventually he moved to a bigger house with a bigger basement and started buying more collections. (Hanley still marvels that people trust him enough to send him collections worth thousands through the mail.)

    In 2003, Hanley’s inventory became too big for him to manage himself, so he hired a couple of teenagers to sort cards. One of the first was 15-year-old Allyson Hamlin, a former babysitter for the Hanleys. After she quit soccer, her mother told her to get a job and suggested contacting Hanley. Hamlin knew nothing about baseball cards then, but eight years later, she’s become an expert.

    When Valarie couldn’t come downstairs to do the laundry without knocking over a stack of cards, she told Dean it was time to move out of the basement. He rented a small office space, outgrew it in a year, and resettled in 2005 at his current location on Brotherton Road.

    It has been a banner year for Dean’s Cards. The company celebrated the 10-year anniversary of its first sale with several months of record orders, and they’ve been buying more collections than ever. Together with Hamlin, who is leaving the company for good to pursue her Ph.D., Hanley wrote his first e-book, about pre-World War I sets. He has a second book in the works, about the bubble gum cards of the 1950s.

    And Dean had the pleasure of sponsoring two events—with should-be-Hall-of-Famer (in our opinion) Dave Parker and Reds pitcher Bronson Arroyo—at the Green Diamond Gallery in Montgomery, which is promoted as the largest private collection of baseball memorabilia in the world. 

    In his introductory remarks, Hanley regaled the crowd with tales about the Parker mementos that he has owned—a growth chart featuring the 6-foot-5 Parker that Dean’s grandfather, Ed Hanley, brought home when he was a Reds usher, and the plaque Parker received for winning the AAA batting title in 1973. The plaque used to hang on the wall at Parker’s mom’s house, but Hanley prefers the chart, which he and his roommates used to attract girls to their apartment in college, marking their heights and writing their names.

    The grin on his face as he tells these stories makes it clear: As long as he’s playing with baseball cards for living, Dean Hanley won’t work another day in his life.

    Illustration by Kevin Miyazaki.
    Originally published in the August 2011 issue.

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