Catering to Collectors

A new millennium approach for success and profit in this maturing market

by Dennis L. Prince
- Oct 13, 2010

It's long been understood that eBay was built upon and buoyed by the passions of collectors. Whether they sought rare antiques, wistfully regarded playthings from their childhood or just one of those nifty PEZ dispensers, collectors hoisted eBay up on high as the de facto source for uncommon goods.

Since eBay's initial appearance, collectors have refined their tastes for collectible curiosities. Just as a connoisseur of fine wines will develop an increasingly sophisticated palate for that which he craves, collectors have similarly raised their expectations for the sorts of collectibles they'll now accept within their personal cache.

For sellers who deal in collectibles, it becomes necessary to employ a new approach when courting collectors. Here's a look at how this collector's evolution has taken place, how the market for collectibles has changed, and how sellers can be successful and profitable in this maturing market.

A time when seller was king

Back in the 1980s, collecting was a sellers' sport, that is, those who had the goods were easily positioned to demand their price. The buyer, begging for the opportunity to become reunited with a long-lost treasure (read: a nostalgic bauble) had little option but to pay the seller's price lest he be dispatched, crestfallen and unfulfilled.

It was a market tilted to the seller's benefit. With low supply (usually limited to whatever existed locally or could be acquired through the scant few trade papers), buyers hadn't much hope for negotiating a better price.

Enlightened collectors now understand that they can be more selective over the items they'll purchase

Leveling the playing field

When eBay arrived in 1995, supply of collectible goods increased many times over in the course of just a few years, goods now available from a growing national and global collective of sellers. Even though selling prices were initially high in eBay's earliest days, the influx of more sellers with more collectible goods (that is, "supply") brought balance between buyer and seller. And, just as eBay had been touted as a "perfect market," the market dynamics that affect prices and profits continued to shift and adjust.

The buyer—the new 'king'

Today, the collectibles market is hardly recognizable in comparison to that of the 1980s and 1990s. After more than a decade of eBay's presence, it's clear that final selling prices for collectible items are down, as compared to the auction place's first five years. Prices have declined to the point that many sellers have stopped listing high-end collectibles, fearing they won't gain the sorts of profits from years ago.

But wait—wouldn't sellers removing goods from the supply result in selling prices going on the rise again? Usually, yes, until you consider the quality of the collectible goods available at a given time, in comparison to the sorts of goods that have gone across the auction block in years prior. Enlightened collectors now understand that they can be more selective over the items they'll purchase and if they'll decide to wait a little longer for a more worthy investment.

Appealing to the refined collector

Sellers, take heart. Despite the appearance that the collectibles market seems all but dead and gone, the good news is that buyers are still buying collectibles. Understand, though, that these buyers are much more choosey about the goods they'll purchase, for reasons previously noted. So how do you attract a collectibles buyer who brings a more discerning taste to the marketplace? Try these approaches:

  • If your goods are on the lower end of the spectrum, offer them "as is." By this, provide full disclosure of the condition, quality and completeness, yet position them as supplemental to higher-end specimens. Some collectors are looking for "parts" to complete their currently owned items and, although what you offer might be incomplete, it could provide a crucial missing piece for a collector.
  • Sellers need to ensure they don't give away a top-quality collectible at a depressed price

  • Similar to the previous point, some collectors are seeking items they can use or consume without regret. Mint condition items are often only good for display purposes yet, because of their like-new condition, a collector could never justify putting such goods to their originally intended use. Conversely, a used collectible that's positioned as "open-box," "gently used" or "loose" becomes desirable to a collector looking for that item to enjoy as intended without the guilt or loss of investment.
  • Bundling lower- and mid-range goods along with a higher-end specimen works to address the collector's desire to have a pristine item to own and display while also gaining additional goods (the same item in lower quality or an item that's complementary to the high-end specimen) to utilize, again without the guilt. This is also a particularly effective method for sellers to gain some profit from lower-quality goods that, if offered on their own, might not attract a buyer.
  • High-end goods are still sought yet sellers should protect the items' value by considering offering them for a Buy It Now price, or within a similar fixed-price setting. Since the auction format draws bargain hunters, sellers need to ensure they don't give away a top-quality collectible at a depressed price. Consider offering lower- to mid-quality goods in a bidding scenario alongside a concurrent offering of higher quality items to attract the discerning buyer (and sometimes convert a bargain hunter into making a higher-end purchase).
  • And if you're offering top-quality collectibles, remain confident in your pricing. Recognize the causes of price deflation (excess supply, economic pressures) and determine to offer your goods for their usual market value. This could translate into a slow sale for the present moment, yet will help preserve the generally accepted value once market conditions rebound. More importantly, this approach—while it could seem stubborn or unreasonable to bargain hunters—communicates that you understand the value of high-end collectibles and are not engaging in "fire sale" methods that, over time, could result in permanent value reduction for the most desirable collectible specimens.

Although the days of impassioned bidding wars over less-than-stellar collectibles seem long gone, the collectibles market is still alive and kicking. Take a renewed approach in positioning collectible items, and you'll find the successful recipe for appealing to discerning collectors.

About the Author

Dennis L. Prince has been analyzing and advocating the e-commerce sector since 1996. He has published more than 12 books on the subject, including How to Sell Anything on eBay…and Make a Fortune, second edition (McGraw-Hill, 2006) and How to Make Money with MySpace (McGraw-Hill, 2008). His insight is actively sought within online, magazine, television and radio venues.

Opinions expressed here may not be shared by Auctiva Corp. and/or its principals.

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