Rich’s Ramblings: Do Consumers Have a Right to Expect Secondary Market Value?

A recent Rich’s Ramblings elicited this response from hobby veteran Gregg Kohn:

“The main issue for me is that this industry has become consumer profit based and it can’t sustain with that model. Name another industry where the manufacturer, distributor, brick and mortar AND consumer expect profit!  Way too many levels.”

And you know what, Gregg is absolutely correct in his general thesis. One major issue over the years, and this has been added to as the pack prices increase, is the idea of “value” for your money. Well, as anyone who has actually read my box reviews knows, we receive many boxes in which the value, perceived and real, does not come close to the retail value of the box itself. I think the box for which we had the best value this year was actually Topps Opening Day. We received a large selection of base cards, inexpensive inserts, several numbered cards and even a relic card. There have been higher priced boxes we received where the going rate for the singles we pulled was well below the cost of the box.

It got me thinking to a time years ago when anyone could become a dealer just by opening new boxes. Because the price points of the boxes were so relatively low and the popularity was so high, you could cover your expenses pretty easily, especially if you could retail the higher end players. When you opened a 15 card pack that cost 30 or 40 cents, and pulled the right rookie or star, your pack was delivering the value right there and anything extra was gravy.  Breaking even was generally almost a given because you could always piece together sets and sell them because just about everyone collected complete sets.   That’s not the case anymore.

The rookie card market was exploding in the 1980’s but the absence of high-end products made it like a penny stock market. If people were buying 1987 Donruss Joey Meyer rookies (and they were at one time), you could get your 50 cents each and be thrilled.

The market was low-end but volatile. Everyone had their own idea of which players were going to be the next game’s next superstars but there wasn’t always a lot of research being done. Heck, I remember the first show the 1988 Topps Traded singles were available, my good friend Dee Robinson sold a bunch of Nelson Santovenia rookies at 25 cents each. I was shocked as the long forgotten catcher was 27 years old as a rookie and let’s face it, his future was not that bright.

But the hobby was different in the 1980. This is how messed up the 1980’s were because when the 1987 Topps wax was released, most dealers promptly raised the prices of their 1986 wax packs to 75 cents. Why? Well, since no more product was being produced, even though this was practically dead inventory, you had to raise your price.

Name me another business in which dead inventory went up in price the longer it sat on the shelf?  Today, if you have long-sitting items on the shelf, the odds are you are overpriced in today’s market which makes more sense for all concerned.

And that is the biggest difference for the consumer today as compared to 25 years ago: You are not guaranteed a profit when you open items.

When I stopped at one of my local card shops the other day, the owner told me he had  just dealt with a client who had spent nearly $5,000 on unopened product including a case of Panini World Cup Prizm, which has generally been producing six autographs per case. This man pulled only five.  When the store owner called Panini’s customer service, he was basically told, “well, the next case could have seven so we can’t help you.”  Now the owner is going to go out and find a nice autograph for his customer as a goodwill gesture but the question begs, “Is the card company truly responsible in that situation?” Panini is very clear in saying these odds are good for the overall release but six autographs in every case is not a guarantee.

And then to go back to the beginning of Gregg’s post: Of course the manufacturer has to expect a profit, after all, how else can they stay in business? With all the expenses of running a card company, it’s no wonder the likes of In the Game and Leaf do not go out and buy these expensive league licenses. In fact, the other night, I heard of another company who produces such type of cards and we’re hoping to receive some of these cards so we can see their effort first hand.

Yes, distributors have to make money as well, but they are in a really tricky position. Because most of their orders are not done in advance (as dealers do when they are direct with card companies).  Is it their obligation to make only their standard percentage at all times or do they have the right to make a higher percentage if something such as 2014 Bowman Jumbos explode out of the starting gate because extra autographs are included? That is a much tougher business call than most of us realize.

And, oh yes, the dealers, who receive these boxes whether direct or from the distributors. Some work on a pure mathematical formula  while others pay attention to the market. Either way, if they have a store front, of set up at a long-running show, they have other expenses as well.. And yes their goal is to make a profit so they can stay in business.

And now to our final group, the collectors. As the end-user, they are important but in the end are the collectors entitled to make money on what they purchase?  Their risk is several rungs down the road but in reality, they have the right to expect good value, if not a pure plus, for their efforts.  One of our recent breaks included a Ryan Zimmerman autograph #d to 10 but our big on-card signature hit was a Tyson Ross (who?) autograph which was serial numbered to 600. And that’s where the real problem lies today. Back in the 1980’s if you did not get your rookie of choice, you were only out $10-12 for the most part and frankly, unless some dealer was re-sealing packs that was the luck of the draw. Today, boxes cost more.  Spend $200 and you feel like you should get some real value in return.  Here is the review of 2011 Topps Marquee (and to be fair this product no longer exists). Note the final paragraph of the review.  That comment I made still holds true to this very day.

We all like to get the big hit from our boxes but deep down, I’m not entitled to make money when I purchase a box. The concept of being a collector is not the same as being a dealer. If you are going to be a collector, do not expect everything you open to be profitable or even match the secondary market value.  We are, thanks to outlets such as eBay and COMC, returning to the days where long-time hobby comrade used to say everyone had EADS (Everyone’s a Dealer Syndrome). Nowadays, everyone has access to the going rate for any card.  Information  is king but at what point do we go back to being collectors again?

Anyway, thanks for reading, and we’d love to hear your thoughts. Please send your emails to the address listed below.