Saturday, January 10, 2009

Case Incentives: Reward for the Dealer or Punishment for the Collector?

Dealer incentives have been a part of the non-sport hobby for years. The practice rewards dealers exclusive cards for ordering a certain number of cases as a product, often at different tiers. The more cases bought, the better the incentive. For example, with Rittenhouse Archives' recently released Star Trek the Movie In Motion set, for each ten-box case that was bought an Alfre Woodard autograph would be included at no extra charge. At this level, they're more of a bonus than anything and they're plentiful enough that they shouldn't empty a collector's wallet.

With three cases, dealers get a Grace Lee Whitney autograph. For most, she's not the biggest name in the world, but for a Trek fan, she did star in both the original series and later in the films. But now rarity is starting to come into play and influencing the price to a place higher than Whitney's signature alone would have supported.

Moving to the six-case incentive, it's a good 'un: Spock himself, Leonard Nimoy. Like a lot of sets, the six-case incentive is better than most of the cards inserted in packs. Star Trek the Movies In Motion has quite a number of good signers aside from Nimoy incluing Patrick Stewart, Christopher Plummer and Kristie Alley, but Nimoy is definitely in the top tier. Nimoy has already signed for many sets, but those going after the master set will need this to do so and take the $200 hit. To get the Nimoy, dealers had buy 60 boxes. With Star Trek, the fan base doesn't make this a huge risk. For many dealers these are still bonuses as they might have ordered this amount anyway.

But what about a set with marginal appeal or is of a less established franchise? Incentives provide just that - a reason to go a little deeper with ordering than they might have. So even if boxes are sold at cost, the incentives make up the profit. But this leads to a couple of issues: over-ordering and added cost for collectors.

Like any collectibles, trading card prices are largely dictated by supply and demand. If there's a lot of a product out there, prices invariably drop. So when dealers are ordering an extra few boxes or cases to get that fancy incentive that's as nice or nicer than anything that's in the boxes they're shelling the money over for, there's going to be extra product out there. In the long run, this hurts the product as secondary market prices will drop. Manufacturers may say they don't follow or dictate secondary market prices, but they should because unless it's the last set they're going to make then it will affect their futures products. Dealers who lose money on one set have less money to spend on another. Collectors who bought early get frustrated when box prices drop quickly after release once it's realized that

Most of the time these cards are not available to collectors without going through their lcoal shop or eBay. And then they have to pay extreme prices for them. Take the X-Files I Want to Believe Mulder and Scully dual autograph that I believe was a 10-case incentive (100 boxes). Sure they're the lead stars in one of the biggest cult shows of all time but $500? That's the minimum you could expect to pay. Add to that, both can be found on more attractive individual autograph cards in the same set for about $200 each.

Perhaps one of the more frustrating and head-scratching multi-case incentives is from the upcoming James Bond Archives from Rittenhouse Archives. For every 15 ten-box cases dealers pre-order they'll get a bonus "Archive Box" that is a special hot box containing all of the pack-inserted autographs and costume cards as well as an exclusive John-Rhys Davies autograph not found anywhere else.

But here's where I don't get it. The master set collectors who want to get every card on the checklist are presumably some of the biggest pack and box buyers. But if they can only get a master set by getting an Archive Box, it makes the most sense to just buy it outright and skip the wax. Now there's extra boxes kicking around because the most dedicated fans were left to go for it all in one go.

I understand the economy is in trouble and collectible companies are walking a fine line where risks are probably going to be calculated at best. While these multi-case incentives may help an individual product sell through at the factory level and help the industry short-term, I can only see long-term troubles if these become more and more elitist. Longtime collectors with less funds are bound to become frustrated and cut their spending if not leave the hobby altogether. When that happens and there's nobody there to replace them the collecting base shrinks. And when the non-sport side of the hobby is already rather small, any shrinkage could have the end result of a manufacturer going under.

These are tough times. My hope is that the manufacturers recognize that there's a lot of collectors out there who don't have deep pockets. They may not lead to huge profits for a single product, but if they stay pleased they're going to stick around no matter what. Please them with more accessible sets sans gimmicks and near-impossible to find cards and they'll maintain the hobby through the economic storm. They might not spend more when things get better, but they'll have maintained an industry and kept it alive for when the big-spenders do eventually return.

No comments: