The world of collecting has changed. When I began collecting as a boy, one phrase that I often heard was “they aren’t making any more of these.” That statement meant that there were only so many stoneware pitchers, Depression glass cookie jars, and Weller vases around. In the future, the population of these and other collectibles would only decrease, making those left behind more valuable. That statement has certainly held true, but a whole new dimension to collecting has opened up where the phrase “they aren’t making any more of these” is anything but correct.
Antiques and collectibles can be very profitable. Even those who collect for the joy of collecting, and couldn’t care less about whether or not their treasures appreciate in value, profit from the rise in values. When many of us finally decide to part with things we’ve collected in the past, we find they are worth more than we paid for them (although not always these days).
The potential profits of collecting haven’t escaped the notice of big business. Major corporations have developed ways to take advantage of the collectibles market. The entrance of big business into the collectibles field isn’t necessarily a bad thing, but collectors needed to understand that the rules have changed. Traditional antiques and collectibles appreciate in value in large part due to their rarity. The rarity of most pieces has been very predictable; largely due to the fact that “they aren’t making any more of these.” The supply of traditional antiques and collectibles can only go down. Pieces are broken, lost, or destroyed in natural and unnatural disasters. There are factors, such as popularity, trends in style, and etcetera that affect value, but a slowly dwindling supply is one of the most powerful factors.
There is no dwindling supply of the new collectibles, what I call “created collectibles.” These pieces are currently in production and nothing keeps more and more from being produced. Many of these have proven to be very good investments in the short run and are certainly enjoyable on other levels, but they are not as safe as more traditional antiques and collectibles.
The makers of Beanie Babies are a prime example. Remember when Beanie Babies were the hot item? Many versions of these cute little creatures were retired early. Production was halted well before there was enough of a supply to meet the demand. This caused prices to soar. Beanie Babies were extremely popular and a lot of collectors were willing to pay big bucks for them. Collectors never knew which versions would be retired early. Any purchase could turn out to be quite profitable.
The makers of Beanie Babies and other created collectibles learned how to create value by controlling the supply in relation to the demand. This isn’t necessarily a bad thing. Many collectors did profit—if they sold before the bottom fell out. Many dealers and collectors made big profits from the sharp increases in value. Many others were left holding the bag when the values dropped. The values in the created collectible market are manipulated artificially and eventually the bubble will burst.
Collectors of created collectibles are reasonably safe while the collectibles are riding high. The producers of these items aren’t going to kill the golden goose by suddenly flooding the market. They aren’t going to “unretire” previously retired items to cash in because that would destroy the entire market. Pieces worth big bucks would plummet in value overnight. No one would bother making a purchase in hopes of quickly escalating values after a producer pulled such a stunt. Big business is far too savvy to destroy what they’ve worked hard to create. This gives collectors of created collectibles an insurance policy against such events. Even so, the good times can only last so long despite the efforts of companies to keep the values up.
Yet more danger lies in other areas. Knock-offs are a big problem. When there is a profit to be made, it doesn’t take long for others to enter the market. Manufacturers will produce items as similar as possible (without violating copyrights and trademarks) to cash in on the popularity of lucrative created collectibles. This siphons off some of the demand and cuts into the rate of appreciation. It also has a tendency to flood the market, which is always bad news for values.
The success of created collectibles is a siren call that beckons manufacturers to keep a good thing going. If sales are brisk and demand continually outruns supply, why not produce more and more versions? There is a ready market for more versions and collectors are clamoring for them. The problem is that some manufacturers don’t know when to stop. They turn out one version after another until the sheer number of variations is its own kind of market flood. Many collectors become overwhelmed and stop buying.
One of my friends began collecting a series of collector plates that he found especially attractive. He was thrilled with assembling the entire set of eight. Not long after, new plates in the series were issued, then more. The joy of his collection was killed off when he realized the manufacturer would turn out one plate after another with no stopping point in sight.
My word of warning applies primarily to those who are purchasing created collectibles with thoughts of big profits, but they apply even to those who collect purely for enjoyment. The important point to keep in mind when considering a created collectible purchase is that the value will most likely go down. Will it bother you that your $50 piece will only be worth $10 in a few years or will you get enjoy enjoyment out of it that the drop in value won’t matter? Weigh enjoyment against monetary loss and if enjoyment comes out on top, then make the purchase. If not, think twice and perhaps wait until the prices have dropped before buying.
Individuals solely concerned with profit need to beware. My advice to such investors is not to buy, but if you’re determined to do so, then buy and sell as quickly as possible if the values go up. Don’t hold onto pieces in hopes of making even more. Pieces that are worth $100 one day may be worth more in the future, but it’s entirely likely they will be worth a good deal less. Things change and the collecting craze of today may be of little interest tomorrow.
The point of collecting should be enjoyment, not profit. Anyone who enjoys what they collect has not wasted their money. So what if a piece purchased for $10 escalates in value to $150 and then plummets back to the original purchase price? All the collector has lost in such a case is the potential profit that could have been made if he or she sold when the value was up.
There is nothing wrong with created collectibles. They bring great joy to many collectors, but we all need to be aware that the values won’t hold. If you’re buying for enjoyment, do so carefully. If you’re buying as a long-term investment, don’t buy at all!
