TFWe Issue 01 Editorial - Collecting to Invest

Discussion in 'Transformers General Discussion' started by Kickback, May 22, 2011.

  1. Kickback

    Kickback Proud father Administrator Super Mod News Staff

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    Collecting to Invest
    written by Kickback

    A majority of the people that are going to read this editorial will classify themselves as some sort of collector – let’s face it, the ‘casual’ fan doesn’t exist on a message board. Most of us are collectors of some sort – whether we collect a toyline, we collect vintage and nostalgic pieces, or in some cases we collect with the idea that we can profit off our sealed items later down the road. Why else keep the stuff sealed, right?

    Now, it’s important to distinguish between a collector who buys duplicates with the possibility of profiting later on down the road (which this article is about) versus the guy that goes out and buys the popular, hard-to-find toy and immediately tries to flip the item for a profit (see: scalper). A collector who buys duplicates and keeps items sealed to turn around and sell them years down the road is different from the guy that buys (at the time of the article) four Generations Warpath figures and tries to flip three of them the same day for double what he paid for.

    Love them or hate them, scalpers are part of the collecting market and always will be. But they only exist because people allow them to exist – there’s nothing anyone can do if someone has the income to spend to purchase ten of a limited, expensive item (such as 3rd party items like the “Commander” armor upgrade by Fans Project, etc.). But that’s another article for another time.


    Step 1: How to Determine Popularity

    First and foremost, if you’re considering buying multiples of an item with the thought of turning a profit on them years down the road, you need to have the eye to know what’s popular and what is going to be hard to find or in demand later on down the road. Sometimes you get lucky (just ask the 2007 Target Exclusive Ultra Magnus vs. Skywarp owners), and sometimes it’s so blatantly obvious that you kick yourself for missing it (Wal-Mart Exclusive Alternators Decepticon Rumble and Ravage). So how do you determine what’s going to be popular?

    [​IMG] | [​IMG]
    Ultra Magnus vs. Skywarp (Target) and Alternators Decepticon Rumble (WalMart)

    Well, in regards to Transformers, the answer is pretty simple – anything nostalgic or homage-related is always going to be a popular purchase. The “Generations” and “Reveal the Shield” line are perfect examples – how many people are looking for Warpath, Thundercracker, and Wheeljack? Or how about people wanting Autobot Jazz, Turbo Tracks, and Wreck Gar? You might ask, “Kickback! How can you tell that those figures are going to be popular or in-demand?” The answer is in your face, really.

    The “Reveal the Shield” line was the final two waves of what started as “Hunt for Decepticons”, and the line was scheduled to end when “Dark of the Moon” released. Right off the bat you should recognize that a “subline” that only lasts two waves is going to be limited. History shows that the first wave of a toyline and the last wave of a toyline always seem to have the most “in-demand” figures, or in this instance, Autobot Jazz and Turbo Tracks from wave 1 and Wreck Gar from wave 2. People may only be selling these figures for about $20 to $25 a pop right now (average check on the message board), but two to three years from now, what will those figures be going for? It’s a risk, but if they’re in-demand now and pulling in a decent mark-up value, one has to assume that when they’re entirely off the shelf and they aren’t being re-released that their value is only going to increase. Their popularity is easy to see (Generation One nostalgia value and done in a “Classics” styling) and we’re going to get a real test of what they go for with a price-check at BotCon in June (maybe I’ll do a follow-up, just for fun).

    I recently sold off some of my sealed collection from 2007 – the first two waves of the “Classics” line that served as a filler between “Cybertron” and the first live-action movie. I waited for the toys to go on clearance for about $5 each at Wal-Mart, stocked up on what I thought would be popular characters (Rodimus, Grimlock, Starscream, Ramjet, and Mirage). What I paid $5 for I ended up selling for between $25 and $30. Yes, I had to wait four years for the value to go up, and considering the inflation in the economy ($12 right now for a deluxe, expect close to $15 by 2012), maybe it wasn’t that much of a “profit” … but at the end of the day, I got more back for it then what I paid.


    Step 2: Determining the Price

    So right now you have an extra Classics Rodimus from 2007 sealed that you’ve been sitting on. How much should you sell it for? You read the last bit and saw that I sold off some of my collection of Classics for the $20-$30 range, so you jump and say “$25, right!?”… WRONG! You have two things to look at with that figure right now – the availability (thanks to the “Battle in Space” set), and the fact that a 3rd party company made the add-on armor for the figure, thus driving up value for the original.

    [​IMG] | [​IMG]
    Classics Rodimus and FansProject Protector (prototype)

    Everyone has their own method of determining value, and I encourage you to do your own research on the subject. I sold my Classics Rodimus (sealed) for $60. How did I manage to do that? Well, I remember what I paid for it in the first place (around $5), and then I check what the prices are going for on eBay. A few years ago you could rely simply on eBay as a price-determiner, but with their increases fees for selling items, people jack up the price on shipping or on the figure to off-set those fees. It’s a good place to start, but I’ve discovered the best way to do it is to check the various message boards for Transformers and see what my peers are selling the figure for. You’ll find your high-point (the guy selling it for $100, hoping to cash in on the demand because of the add-on armor kit), and you’ll find the low-point (someone selling an opened, good condition one). Don’t sell yourself short by going strictly middle-of-the-road, but don’t be the guy that sells it for $5 less than the high-point guy … if he isn’t selling his at $100, it’s because no one wants it that price … so you need to entice someone on the fence who is willing to spend the money. The way you do that is to off-set the “high point” guy by enough that someone says to themselves, “I won’t spend $100 just to get that … but I can justify spending $60…”.

    I probably could have sold it for $75, but I’m not making a living off doing this, I call it more of an “investment” … when I’m in an unexpected pinch for finances (like a random kidney stone last year, ack!). I know the collector market for Transformers, I’ve been more or less accurate on popularity and demand on figures over the years, and so when I find myself in a money-pinch I have an easy solution by selling off some older toys that I kept sealed.


    Step 3: Customer Service

    You’re not a business, so no one is going to report you to the BBB for screwing up a transaction. But we live in the digital age, where a single tweet can ruin your reputation for selling figures. That being said, if someone is paying you for something, you have an obligation to take care of that person as if you are a business. That means having open and constant communication, honesty, and if there’s a hiccup in the process, going out of your way to make that person feel as if they were significantly compensated for the headache.

    I know better than anyone that life likes to throw curveballs at the most unexpected times. But I’ve discovered if you’re up front and honest with the people you’re dealing with, they are more than willing to be patient with you and work with you. You only become shady when you become distant, unresponsive, and avoid contact with the people waiting for their item(s). Yes, you will run in to people that refuse to be patient, and you have to accommodate them as much as you can. If we could all pick the best people to do business with, there would be peace on Earth.

    The point I’m trying to make is this – the better service and communication you give to the people buying your stuff, the more likely they will buy from you again and tell their friends about you if you have something that they want. Word of mouth in this era is more important than it was in the previous era. If you’re selling your 2007 Classics Ultra Magnus vs. Skywarp set for $100, why not make it free shipping? Are you really losing out on that much? When you finish the transaction, always throw out the offer to help find a figure they’re looking for. You’d be surprised who will come to your aid when you can’t find a figure after you’ve gone out of your way to help other people find their figures.


    Conclusion: The Final Word

    So there you have it – a very brief guide for “Collecting for Investing”. Yes, people will call you a scalper. Yes, people will turn you in to a villain simply because you’re selling something for more than what you paid for. But if you have an item that is not readily-available (ie: it’s not on the toy shelves) and you’ve kept it sealed and in great condition, you have the right to sell the toy at what the value for it is, not what the price tag was when you paid for it. There are a few gentle reminders that I’d like to point out though, so you don’t cross the line and turn in to a scalper:

    1 – Help Your Fellow Collectors
    If you manage to find an abundance of a hard-to-find figure and there’s a lot of people looking for the figure (whether in your country or in another country), offer the figure to those people. You don’t have to do it at cost, but at least be reasonable. If you’re in the United Kingdom and you’ve found a Windcharger, and you know the United States and Canada won’t be seeing that figure, offering to help someone in North America isn’t charging them double what you paid for plus shipping. That, in essence, is scalping … taking a figure that is readily available (in some areas) and immediately flipping it for a profit. Mark it up a few bucks to cover expenses and charge shipping. That’s helping your fellow collectors, and hey, especially overseas, it may open the door for you to get an exclusive item at cost later down the road.

    2 – Avoid the “Sell Now” Temptation
    When a new figure comes out, there’s a brief window of “impulse buying” … people that panic because they don’t think they’re ever going to see the figure on the shelves. That window is usually only a few days and the only reason people get by without being labeled as “scalper” is because they can use the term, almost justifiably, “not released yet” or “unreleased”. Once the figures become saturated across the market, the immediate value drops dramatically to more reasonable levels. Your hope, if you’re doing it strictly for profit, is that a few months later those figures are no longer available and the demand drives the price back up again.

    3 – Don’t Over Estimate Popularity
    ROBOTS IN DISGUISE Storm Jet anyone? That figure was “hard to find” for the first two months that it was released (really only showing up in KB Toys case assortments) that people were dropping $80 for the figure (and in 2001/2002, that’s INSANE). I remember being with a friend who found two in a KB Toys store, and even though I needed one for my collection, he stated “Nope. This one is for me, and this one I’m making $100 on”. That, my friends, is scalping. But some people purchased so many duplicates of that toy thinking they could invest in their children’s college funds with it, only to be disappointed when online retailers received plenty of stock and Wal-Mart and Target started getting stock. I should know, I’m still sitting on two sealed!

    [​IMG]
    ROBOTS IN DISGUISE Storm Jet

    Always check the chatter on the Internet on these toys, check the online toy stores pre-orders and see where they stand, and always always ALWAYS look at case assortments to determine if the toy is short-packed or in abundance. The more limited the item is in the case assortment, the harder it becomes to find, and the more in-demand it gets. But that still doesn’t determine popularity.

    Just always remember to help out your fellow collectors. In the collector market, what goes around really does come around, and karma is always in full-effect. The biggest difference between someone collecting for investment and someone scalping is that one cares for their fellow collector and the other is simply trying to make a quick buck right now. Usually, the scalper isn’t a collector at all … just someone who makes a living off selling hot toys to people who HAVE to have that figure.

    Just for fun, here’s some “forecasts” on toy values. These are just speculations, but it’ll be fun to go back in time in the future and see if I was right or wrong on these.

    Power Core Combiners
    Overall, this line failed to catch on with the collector or with the kids. Because of that, you see a LOT of shelf-warming with the earlier waves. That means there are two sets that people will be looking for once the line is over – Grimstone and the Dinobots and Over-Run and the Stunticons. Expect the value on those two sets to even out, but a year or two later, begin to go up as people start to miss “combiners” again.

    [​IMG] | [​IMG]
    PCC Grimstone with Dinobots and Over-Run with Stunticons (Spastic ver. shown)

    Reveal the Shield
    This one is hard to predict. I believe you will always see a healthy demand and a healthy value for Autobot Jazz and Turbo Tracks, so I predict a slow increase to a certain amount (probably the $25 range) and then stay there for quite awhile. YEARS down the road I can see that value going up as we’ve seen with the original 2007 Classics. For Bumblebee, Perceptor, and G2 Optimus Prime … I don’t see their value changing much. $15 range by Christmas, and maybe next summer they’ll be around $20 … but keep in mind that Perceptor and G2 Optimus Prime have planned remolds that will probably hit Generations by Christmas 2011/Spring 2012. Wreck Gar I see a steady increase in demand as he is huge in the customizer market which ends up doubling his overall demand, and he’s still in demand in the regular market today. I’d say take chance on this guy and pick up what you can find … he may be a rare $35-$40 figure within the next 18 months.

    [​IMG]
    Reveal the Shield Wreck Gar

    Generations
    It’s too early to predict Warpath, Thundercracker, and Wheeljack. They are all impulse purchases online with fear that Generations will go on hiatus with Dark of the Moon being released. Thundercracker will complete most peoples’ “Classics Seeker” collection, if they haven’t already grabbed the Henkei release from TakaraTomy. Warpath is a great figure, but I see Wheeljack as the more “hard to find” figure down the road, strictly due to popularity amongst collectors. Sergeant Kup may be a sleeper figure, as is Scourge, but it’s a risky purchase. As for Thunderwing, Skullgrin, Soundwave, and Cliffjumper? We’ve had over-kill on the “filler waves” leading up to the Warpath/Thundercracker/Wheeljack case assortment, so they’ve more or less killed their value. A figure I recommend picking up if you find it? Darkmount … I really think his lack of availability (his initial wave, and then a very, very brief .5 wave afterwards) now will only drive up his value down the road.

    [​IMG] | [​IMG]
    Generations Wheeljack and Generations Darkmount

    Did you know?
    I’ve seen Energon “Omega Sentinel” figures (repaints of Energon “Omega Supreme”) figures, sealed, sell for upwards of $200 lately. Why is that figure selling for so much? The “Omega Supreme” toy clogged the toy-shelves everywhere, so a lot of retailers never ordered the last assortment, which contained the “Omega Sentinel” toy … thus making it harder to find. If you have a sealed one that you’re not very fond of, you have a chance to make a decent profit on that figure right now. I recommend SELL SELL SELL, as the toy itself wasn’t that popular but the fact you couldn’t find it has driven up the value. It’s a bubble that’s bound to pop as people begin the buy-resell process and drive down the value.

    [​IMG]
    Energon Omega Sentinel

    Thanks for reading. I hope, if anything, I was able to provide some insight for those of you who do purchase doubles and keep things sealed with the idea that down the road you can sell them off, like an investment. I am certain there will be those who disagree with this method and consider it scalping - and that's fine. Just remember that the next time one of your fellow collectors helps you get something at cost - there's a fairly good chance they've sold off something they kept sealed with the very same thought - "Someday, this is going to be worth something."

    Till next time!

    - Kickback
    TFWe Editor-in-Chief
    TFW2005.COM Administrator
    Follow me on Twitter @rankal and always follow @tfw2005 for all your Transformers news and updates!
     
  2. 46+2

    46+2 Well-Known Member

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    Awesome! Very nice kickback. This article needed to be written.
     
  3. ORIO

    ORIO Plant-Based Bot Super Mod News Staff

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    Another Great read! and very helpful :thumb 
     
  4. Lock Cade

    Lock Cade Tarn Fangirl TFW2005 Supporter

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    Very informative. Nice job. :) 
     
  5. Waverider

    Waverider Supreme Dude TFW2005 Supporter

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    Awesome editorial. It's very informative for new and old fans.

    Kudos! :thumb 
     
  6. Matty

    Matty @StayingInTheBox Moderator News Staff

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    This was a great read and spot on the truth.
     
  7. moreprimeland

    moreprimeland Optimus told me to do it! Moderator TFW2005 Supporter

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    I read this article first thing..interesting, informative and now I should look at your sale thread :lol 

    As someone who keeps most of her bots MISB..it's good to rethink which ones will have the best value in the future. :thumb 
     
  8. Gatchaman

    Gatchaman Well-Known Member

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    very interesting and informative, thanks for the great insight!
     
  9. wolfe

    wolfe Well-Known Member

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    Very good editorial. Some helpful tips in there for people should always keep in mind when collecting trade/sell items for the future.

    If there are a few bots (especially in Generations/Classics) that i think will go up in value and be good for future trading I will take advantage of the sales that come up. Its very cool that Target/Kohl's/Walmart will ad match.
     
  10. justamaze

    justamaze Well-Known Member

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    Great. Thanks Kickback.
     
  11. Blackout32

    Blackout32 Subdivisions

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    Great Article and I read every bit of it and enjoyed it but I also see Star Wars and the new Classics MOTUC and vintage as this type of buying and selling or collecting, scalping for figures.
     
  12. Kickback

    Kickback Proud father Administrator Super Mod News Staff

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    In a way it is considered scalping, as you're purchasing with the idea of making profit down the road. But look at all the people who bought a multiple of United Rumble/Frenzy for $50 a pop ... they can now double, and soon probably TRIPLE what they paid for, as that is what the open market going value for that figure-set is/is going to be. And the toy isn't even a year old yet.

    That's pretty significant in my opinion.
     

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