Rinker on Collectibles

RINKER ON COLLECTIBLES — Column #1740

Identifying a Stable, Secondary Collecting Marketplace

A stable, viable collecting marketplace is one in which objects from the common to the scarcest are bought and sold at consistent prices over a specific time period. At any given moment, objects in established collecting categories fall within this parameter.

These measurement criteria are applied on a collecting category by collecting category basis. Attempting to broaden the criteria to the antiques and collectibles marketplace as a whole is unfeasible. In addition to collecting categories that are stable, there are collecting categories that are “hot” and some that are in decline.

It takes 30 years or more to establish a stable, viable secondary collecting marketplace for any collecting category. Rinker’s 30-Year Rule—for the first 30 years of anything’s life, all its value is speculative—was created to explain this phenomenon. The rule is a generalization. Collecting categories can take a longer or shorter period than 30 years to achieve a stable, viable secondary marketplace. Some collecting categories never do.

The establishment of a stable, viable secondary collecting marketplace does not guarantee that this marketplace will last forever. There are endangered collecting categories whose viable, stable secondary marketplace has collapsed in the past two decades.

Since a stable, viable secondary collecting market is price dependent, it is necessary to adjust the price structure within any marketplace analysis to achieve a current understanding of what viability and stability means. Pattern glass and Hummel figures are two examples. There are 2020 viable, stable secondary markets for these two collecting categories. The caveat is that the sell through prices for common, above average, and hard-to-find pieces has fallen 60 to 75 percent of former 20th century stable, viable marketplace highs.

Viable, stable secondary marketplaces are generational dependent. In the last decade of the 1990s, antiques and collectibles secondary marketplace analysis revealed that the long-term life of most collecting categories was shorter than realized. The assumption that a present generation would collect and treasure the same objects as preceding generations of collectors was false. Rinker’s “One Generation Rule”—What is the value of something going to be when the generation(s) that played and used it die?—explains this. This also is manifested in the common lament among parents that “my children do not want my things.”

The demise of printed antiques and collectibles price guides, whether general or collecting category specific, has a negative impact on the secondary market. These price guides were critical pricing props in terms of maintaining secondary marketplace pricing over an extended period of time. Although touted as reflecting “real time” prices, the price guide prices represented the editors’ best “average price” guesses as they considered a host of factors such as auction, field, internet auction, and “gut feel” prices.

As my readers are aware, I started collecting Southern folk pottery face jugs over 18-months ago. The collection consists of examples by potters who are deceased as well as contemporary makers. I established one limiting factor governing the pieces that I would add to my collection. I restrict my collection to pieces from multiple-generation family folk potters or individuals who apprenticed or worked with a potter from one of the traditional families.

Many of my “early” Southern pottery face jugs have come from collectors who are disposing of their collections via a select few contemporary potters. Thus far, I have refused to actively participate in the auction secondary market. By the time one adds in the buyer’s penalty (the extra surcharge for the right to bid) and the shipping costs, I can do much better through direct purchases with my field contacts.

My purchases of “older” pieces made by contemporary potters who still are potting was the catalyst that started me thinking about what constitutes a viable, stable secondary marketplace. In doing so, I quickly realized that the microcosm on which I was focusing also applied to the contemporary folk art secondary market macrocosm as well as exhibited multiple spin-offs related to the antiques and collectibles secondary marketplace. My observations are as follows:

First, buyers and sellers within the secondary marketplace, especially of older contemporary pieces, are too personally involved in the market to have a realistic view of what a stable, viable price is. Collectors, potters, and sellers develop friendships that make an objective view of value impossible.

Collectors, who purchased early works from potters at low prices and then watched these potters raise prices to match market demand, quickly forgot what they initially paid and revalued the pieces in their collection to reflect the new asking prices. In addition, when offering pieces from their collection for sale, they expected top dollar based on the assumption that new buyers will hold their pieces in the same esteem they do. By offering their pieces in a direct sale secondary market, collectors avoid the harsh realities of value being determined by a marketplace with open bidding.

Second, the secondary market for folk art, especially regional folk art, is that the viable, stable secondary market is very localized. If the same objects were offered for sale in a market 500 miles away, the final sell through prices would be lower. Many antiques and collectibles secondary markets are regional and insular. “National” market is a designation that is extremely limited.

Third, the high end of any secondary folk art market is sustained by a relatively small number of buyers. The loss of one or two major buyers can upset the value equilibrium. The same applies to antiques and collectibles collecting categories.

Fourth, when collectors, especially folk art collectors, buy a contemporary piece at full retail, they mistakenly believe the price paid equals the secondary resale market price of the piece. Most collectors are incapable of applying the “new car” secondary market price reality to any piece bought out of love or with a speculative gleam in their eyes.

Fifth, when a collecting category, especially in folk art, runs “hot,” it attracts hundreds of imitators. Many of today’s folk artists, including some folk potters, have university degrees in art, chemistry, and/or pottery. Self-taught has no meaning in the modern folk art market. Many contemporary folk potters and artists in general produce formal, sculptural pieces and/or pieces that depart radically from the traditional pieces. Potential customer sales rather than artistic consideration govern their production.

When this occurs, buyers need deep pockets to keep up with each new potter and interpretation. Every collector wants to be among the first to acquire pieces from the next scholarly-identified iconic potter. This desire channels money away from the older pieces, especially of deceased or retired potters.

The contemporary Southern folk pottery face jug market is flooded. The COVID-19 pandemic has exacerbated the problem. Potters are using their time-at-home to triple or quadruple their production. Buyers are simply going to run out of money sooner rather than later.

Applying this to the antiques and collectibles marketplace, think Beanie Babies, Cabbage Patch dolls, and Holiday Barbie. Manufacturers, big or small, produced to meet market demand. Eventually, they over produced. A flooded retail market is a flooded secondary market a decade or two later.

Sixth, few contemporary Southern pottery face jugs have stood the test of time. Their secondary market is speculative and will likely remain so for decades. Further, there are signs that some secondary market prices for older pieces are starting to decline. This is due in part to a decline in the number of collectors who sustained the market during the past four decades. There is a limit to how many of any one thing a collector needs, can afford, will display, and is willing to store. This applies to the antiques and collectibles trade as a whole.

Seventh, death plays a role in the Southern folk face jug pottery secondary market, as it does in all folk art secondary markets. Death is the one guarantee that no new period pieces will enter the marketplace. It is easy to see the correlation between this and the death of a movie, music, television or sports icon, especially as it relates to autographed material.

In summary, a viable, stable secondary market in any collecting category is momentary. While it has a lifetime, the lifetime can be brief or extend for a longer period of time, albeit almost never more than a decade. Nothing is permanent in the antiques and collectibles marketplace is a truism that every participant needs to keep foremost in his/her mind.

I welcome my readers sharing their opinions about the secondary market in their favorite collecting category/categories. Email them to me at 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.

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