Rinker on Collectibles

RINKER ON COLLECTIBLES — Column #1470

Developments That Can End a Collecting Craze - Part II

The first column in this series explored two reasons why collecting crazes end – a decline in media attention and changes in manufacturers’ strategy that ultimately floods the retail and secondary markets with so much new product that even the most die-hard collectors become discouraged. There are 10 additional developments that signal the end of a collecting craze: (1) the role played by specialized price guides; (2) other manufacturers joining the bandwagon; (3) knockoffs and fakes; (4) a decline in retail sales; (5) the secondary market pricing itself beyond the financial capacity of the average buyer; (6) the internet; (7) the collapse of the speculative market; (8) space considerations; (9) time; and (10) the absence of fun and the disappearance of enthusiasm and optimism. When a collecting craze ends, it is the result of a combination of developments – the more developments that can be identified, the faster the decline and end.

Price guides are supposed to accurately report secondary market retail prices. Whether they do or not is a subject for a future “Rinker on Collectibles” column. Historically, specialty price guides, especially the first publication focusing on a new collecting category, often triggered collecting crazes. During the latter half of the twentieth century when secondary market sellers relied heavily on price guides, sellers adjusted their field prices to match book prices. Price guide authors, especially those who dealt in and/or collected the objects, used this reliance to manipulate prices upward. They published values based upon what they thought objects should be worth or wished they were worth as opposed to actual field prices realized.

When a new collecting craze develops, specialized price guides and periodicals quickly follow. Authors discover that buyers of new editions of any price guides only wanted one type of information – affirmation that their objects have a higher value in the new edition as opposed to the previous edition. As long as authors keep increasing prices, individuals buy new editions. Publishers encourage this approach. Eventually, a credibility gap arises. Users realize there is a discernible difference between the prices found in the price guides and sell through prices in the field. Dealers who use the price guide prices to value their merchandise discover that fewer and fewer individuals are willing to pay the book price.

When a collecting craze is hot, multiple price guides appear. Recognizing that buyers will purchase the guide with the best (highest) prices, publishers make no effort to field check prices provided by the authors. The publisher’s focus is on selling as many copies of a book as possible.

New price guide editions appear every year during a collecting craze. If a craze is on fire, publishers issue quarterly or monthly periodical price guides. Again, the publisher knows that these sell only if prices are raised. Suggesting a decline in value is taboo.

The failure to publish a new annual edition of a craze driven price guide is a clear indication the craze is ending. A three-year hiatus means the craze is over.

While imitation may be the greatest form of flattery, it is the kiss of death for a collecting craze. Imitations are the development of similar but competing product lines. They are designed to offer a viable retail alternative to the current craze. The “Mints” excelled at creating copycats (stylist copies) of their rivals’ products. Actually, this is an historic approach. Art glass and household glass manufacturers often created nearly identical but not exact copies of products that mimic a rival’s best-selling line.

When a collecting craze is strong, these imitation products have a minimal impact on the collecting craze. If the collecting craze is just starting or slowing, these imitation products rechanneled collector interest, ensuring a quicker end to the collecting craze.

Manufacturing rivalry aids and hurts a collecting craze. Collecting crazes rely heavily on brand loyalty. The manufacturer’s goal is to wed a buyer to its specific brand. Often, a collecting craze is so broad that multiple brands compete. The 1990s Christmas ornament collecting craze is an example. The craze quickly attracted dozens of manufacturers including Corning, Hallmark, and Radko. At the height of the collecting craze, there appeared to be no limit to new product. There is always a limit. Further, the more products fueling the collecting craze, the faster a point will be reached when supply exceeds demand. At the height of a collecting craze, manufacturing greed overcomes any “how much merchandise can the market adsorb” logic.

Occasionally, collecting crazes center around one manufacturer’s product. Ty’s Beanie Babies is a case in point. Ty aggressively attacked competitors as a means of preserving its market share. However, even Ty eventually succumbed to “the more the merrier” collecting craze mentality.

Every collecting craze has a limit in respect to how much material it can embrace. A secondary market collecting craze is a pyramid scheme. It is sustainable only so long as new buyers enter the market. When the base founders, the pyramid collapses.

Open imitation is one thing. Knockoffs and fakes are another. Imitations are marketed openly and are easy to identify. Knockoffs and fakes confuse and frustrate. Rumors of knockoffs and fakes mark the beginning of the end for a collecting craze. Once the knockoffs and fakes appear, the end is inevitable. While the process may take a year or more; there is no reversing it.

While many of the manufacturers of objects involved in collecting crazes are located within the United States, their products’ knockoffs are made abroad, especially in Asia. Enforcement of commercial copyrights in China and some second world countries is lax to non-existent. As a result, counterfeit products arrive in the marketplace within weeks or months following the initial establishment of a collecting craze.

During the early part of a collecting craze, few are concerned about knockoffs and fakes. There is an unbridled faith that objects are authentic. Many collectors find that what they bought is not what they thought they were buying. Collecting craze leaders quickly distribute information about these knockoffs and fakes. Unfortunately, this does not reach everyone. Further, the information provided is quickly relayed to the manufacturers of the knockoffs and fakes so that they can correct the imperfections in the next manufacturing run.

Knockoffs and fakes are found in almost every collecting category. When a collecting craze involves a subcategory of an older collecting category, new participants usually do not ask if there were knockoffs and fakes during the initial period of manufacture. The answer is yes, especially when the collecting craze involves 20th century objects.

Once a collecting craze involving older objects develops, modern manufacturers, especially in Asia, have no problem creating copycats (stylistic copies), fantasies (shapes, forms, and patterns that did not exist historically), knockoffs, and fakes. The 1990s and early 2000s Roseville pottery collecting craze produced examples of all four types of pseudo-products.

Sellers obsess about selling an item for too little during a collecting craze. A quick sale is interpreted as a mistake, proof the seller underpriced the item. Each seller wants the maximum value for the item sold. During a craze, the profit margin made on an object is secondary to a desire to set the secondary market with the sale.

Collecting crazes are driven by the concept that object value is linear, following an upward trend to which there is no upper limit. There is a limit. It is reached in every collecting craze. It is the moment when prices stall and then begin to fall. At first, there is denial among collectors and sellers. Those involved in the collecting craze are blind to what is happening around them. It takes a few weeks, occasionally a month or two, for acceptance of the bad news.

Once the decline begins, it proceeds at an accelerated pace. The winners are those who got out quickly. The losers are those who waited. Collectors who are unwilling to accept less than paid for objects and cut their loss are the biggest losers.

In the case of new product collecting crazes, many retailers often price desirable merchandise above manufacturers’ suggested retail prices. They feel entitled to a portion of the profits involved in speculative secondary market sales. In addition, retailers started hoarding merchandise, adding to the artificial scarcity purposely created by manufacturers’ distribution processes. Buyers resent retailers cutting into their potential profits. Resellers and collectors argue that retailers make a sufficient profit selling product at list.

A breakdown of trust between a primary or secondary market retailer and a buyer is disaster. Once it happens, it is irreparable. Word spreads. Distrust and disgust grows.

My original intent was a two-part series. With six additional reasons for the decline of collecting craze left unexplored, a third “Rinker on Collectibles” column is necessary. In the interim, if readers wish to add to my list, email your thoughts to harrylrinker@aol.com.

Harry L. Rinker welcomes questions from readers about collectibles, those mass-produced items from the twentieth and twenty-first centuries. Selected letters will be answered in this column. Harry cannot provide personal answers. Photos and other material submitted cannot be returned. Send your questions to: Rinker on Collectibles, 5955 Mill Point Court SE, Kentwood, MI 49512. You also can e-mail your questions to harrylrinker@aol.com. Only e-mails containing a full name and mailing address will be considered.

You can listen and participate in WHATCHA GOT?, Harry’s antiques and collectibles radio call-in show, on Sunday mornings between 8:00 AM and 10:00 AM Eastern Time. If you cannot find it on a station in your area, WHATCHA GOT? streams live on the Internet at www.gcnlive.com.

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