RINKER ON COLLECTIBLES — Column #1636
Copyright © Harry Rinker, LLC 2018
The Last BuyerAs collecting interest continues to decline among the Millennial and Entitled generations, the issue of what happens to the hard-to-find, above average, and common objects in a collecting category when no one wants them needs to be explored. Is the landfill its final destination? If not, where?
In order to consider this issue, several assumptions are required. First, every collecting category has a specific life expectancy. Once an object group is collected, it will be collected indefinitely, is a false concept. As recent events have shown, it is more common to measure the lifetime of a collecting category in decades rather than centuries. Although high-end pieces of fine and decorative arts survive in museums, these objects represent less than 1 percent of the pieces within these specific collecting categories. The high end of any collecting category is never a true measure of its strength. The measure rests with the above average and common material.
Second, the popularity of a collecting category follows a bell-like curve, beginning with little collector interest, an event or series of events that trigger collecting interest, a collecting craze, a peak (sometimes a flat plateau), a decline or fallback, and finally a level that wavers and declines as the individuals who participated in the first collecting craze die out. Some collecting categories get lucky and experience a second or third collecting revival. Revivals are shorter in duration and die out quicker.
Third, there is a limited number of collectors for every collecting category. In many cases, the number is in the low to middle hundreds rather than thousands. Given the high survival rate of objects, especially from the 20th century forward, and the flooding of the secondary market thanks to the internet, there are more examples available than there are potential buyers. This issue is compounded by the inability of most major collecting categories to attract new buyers. Collecting categories age along with the individuals who collect them.
Fourth, it is now understood that generational memory plays a major role in determine the strength of any collectible. When memory of an object or object group fades, so does its collectability.
In previous columns, I discussed the question: what is the secondary worth of an object when every collector has an example in a condition that satisfies his/her collector interest? Although zero would appear to be the appropriate answer, it is not. In the 21st century, collectors no longer play a major role in determining the value of an object in the secondary market. More often than not, the buyer is a decorator, amateur or professional, who is buying the object for conversation and/or display purposes, or a person who will reuse the object for its period purpose.
Internet sell through results provide proof of this latter point. If a Hummel figurine starts at $0.99 and has no reserve, it will realize $8.00 or more, assuming it is in fine or better condition. The objects on eBay and other auction sites that do not sell are those with unreasonable opening bids or reserves. This means there is a price at which every object will sell, just as there is a price at which every object will not sell.
The long introduction sets the stage to introduce a question I have been pondering for some time. In most collections, 50% or more of the collection’s value rests with the top 20% of the objects – the masterpiece (ultimate) units and upper echelon pieces. The remaining 80% are the hard-to-find (7%), above average (13%), and commonly found (60%) pieces. Historically, this material provided the initial acquisitions of new and/or younger collectors. Given the inability of almost every collecting category to attract new collectors to replace those collectors who passed away or stopped collecting, the issue is: what will be the final disposition of their hard-to-fine, above average, and common objects?
I spent the Friday, Saturday, and Sunday of the 2018 Memorial Day weekend in Alexandria, Virginia. The celebration of Linda and Bruce Greenberg’s 50th wedding anniversary on Saturday evening was the catalyst for my visit. While there, I took the opportunity to spend four hours in the National Archives and a rushed hour and one-half in the Smithsonian’s Freer Museum on Friday and four and one-half hours at Mount Vernon on Saturday. Over 50 years had passed since I last visited Mount Vernon.
Linda and Bruce Greenberg are personal friends. Bruce is the author of the premier reference books to toy trains. Now in his mid-70s, Bruce continues to publish updated versions of his books. Bruce also is a collecting theorist. Although his focus is toy trains, he used trends found in the general antiques and collectibles marketplace to better understand developments within his specialty. Bruce and I have lengthy phone conversations several times a year. I am not certain who takes away more from our discussions. My list of points to ponder never numbers less than six.
During the anniversary dinner, I sat next to Glenn McComas, a collector of automobiles, toy trains, and more. During our conversation, I asked Glenn what plans he had made to dispose of his collections. Married without children, he indicated that he had made no disposal plans and had no intention of making a plan in the near future. I pointed out to him that his collection was losing value on a daily basis, a point he readily admitted. Glenn startled me when he said that he felt his collection had reached a point where its secondary market value did not justify the efforts required to sell it. I argued that all objects had a market bottom and his assumption was false. When it was clear the subject was an unpleasant one, the conversation shifted to sharing of collecting war stories, many of which focused on characters met during our collecting adventures.
After hosting WHATCHA GOT? on Sunday morning and prior to my return flight from Reagan National in Washington, D.C., to Grand Rapids, I spent two hours visiting with Linda and Bruce at their Alexandria home. Inevitably, Bruce and I talked shop. About 15 minutes before I was scheduled to leave, I asked Bruce to think about what is going to happen to the hard-to-find, above average, and common toy trains that will be entering the secondary market over the next decades as many of the major collectors or heirs sell their collections. “Will they lose value and end up in the landfill?” I asked.
Bruce thought for a moment and answered thus: “Not as long as there is a last buyer.” Bruce explained: “As long as there is a person who thinks he/she can buy an object for one price and sell it for more, objects survive. When there is no last buyer, then the object may well be destined for the landfill.” Nowhere in Bruce’s response was the implication that the last buyer would be a collector or dealer. Bruce and I assumed this would not be the case.
The “last buyer” concept was new to me. After every garage/yard or estate sale, it is common to find that 30 to 50 percent of the material did not sell. Enter the estate liquidator, the person who buys what is left for a penny or pennies on the dollar in hopes he/she can sell enough of the material to make a profit.
At an auction, the last buyer is the box lot buyer. In the 1970s, box lots sold for a few dollars. With the arrival of the internet and eBay, the average price for box lots reached $25.00 and higher. Thanks to the 2008-2009 Great Recession, the price of box lots has dropped dramatically. In middle to high-end gallery (in-house) auctions, they have disappeared. They still are a feature at local house auctions and regional auction galleries.
Charitable auctions at churches and other institutions, the Salvation Army, and consignment shops also attract the last buyer. Their hunt is a difficult one. Most of the objects sold by these organizations are meant for end buyers, those who will use the object one last time before trashing it.
Although I am aware of the role liquidators play, I never took the time to study them. I will correct this in the year ahead. Curiosity may kill the cat; but, it stimulates me.
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 email@example.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.