Over the last few months we have seen some very odd things happen in the ways that the card companies distribute products to their eventual end users. In a shocking turn of events, we have seen these companies favor inopportune situations and limiting the role of the internet, rather than using it to the full advantage of the consumer.
First, Panini decided to work in favor of the card shop by enforcing a minimum advertised price plan, something that makes absolutely no sense when you consider how many collectors buy online. It would be one thing if local shops were as prevalent as they were in the early 1990s, but in reality, the people out there have less access to shops than ever. Its a sad realization for a lot of people that things arent the way they used to be, and for companies to re-establish the local shop in an era where the internet is the new frontier, makes no sense.
Secondly, Upper Deck has made some exclusive partnerships with certain retailers out there, all in the name of “strengthening” their product line, but for the most part all it has done is put a bad taste in the mouths of other retailers left on the outside that do a huge portion of the business for them. Blowout, for one, is a company that thousands upon thousands of collectors use for their wax purchases, and when DA Cardworld was made the only authorized internet retailer, you can see where the problem escalated. They have since sued Upper Deck over this prevention of distribution, more on the basis that they were denied under false pretenses than anything. According to news on the suit, Blowout believes that they met the conditions of the program, and were left out for reasons outside of the parameters of the policy. According to many legal minded people who have commented, its an uphill battle for victory, but that is secondary to the question of why this direction is in place to begin with.
Bottom line, places like Blowout and DA should be focused on as top purveyors of hobby distribution because of the mass install base they have established. Not only that, but I fail to see the logic as to why ANY quality internet retailer would be given any slight of policy what-so-ever, especially due to the growing portion of retail business that is done on the internet. Before this era took hold, I could see how the LCS would be a place that the companies would want to put on a pedestal, but now, things have changed, and that will never return to the way things used to be. Companies that dont embrace the internet portion of their business, both social media wise and otherwise, will be at a terrible disadvantage, and that is a trend that will never go away as long as internet business continues to grow. Although I love going to Local shops and hanging out, I am only one of few collectors that have that luxury.
Additionally, not every card shop is a place I would think of as a retailer worth supporting in the first place. Not every shop deserves special treatment, and I can see this being more of a reason for some of the less ambitious shop owners to take advantage of a poor policy decision by any number of the companies out there. Sure there are great local shops out there, but usually, they are outnumbered 4 to 1 by others who do nothing but complain about the way things used to be. In fact, based on the responses to previous posts I have done, those great card shops DONT need this help in the first place. They have adapted to the change in the market, and have built AROUND new trends rather than rejected them out of stubborness or lack of understanding. If Panini or Upper Deck REALLY wanted to help the shops out there, they would go out of their way to educate on the new era, rather than just throw half-assed attempts at “help” their way. Action and education are always better than just hoping these people take these programs in the right direction, and if previous track records hold up, it wont do any good either way.
Based on this, I would expect the companies who constitute the industry to figure out what the consumer base actually want, instead of assuming what is going to be in their best interest.
Maybe somebody from UD will read other responses to this stupidity that is their Authorized Retailer mess.
Here’s mine. I’ve spent THOUSANDS less on cards in 2011 than I did in 2010. Why? Because there isn’t anything worth buying. New product takes months to reach someplace like Blowout, where it can actually sell at market value versus the inflated, ludicrous pricing the companies think their crap is worth. Delaying sales to markets and allowing pricing adjustments based on actual demand alienates a vast majority of potential buyers. Now, you have a time frame where product is on the market, people have the chance to assess just how worthless it really is and, then, by the time the “blackout” period is over, no body wants the trash. This is insanely stupid.
Another unforseen reaction by most major sellers is that they now don’t discount older (better) product nearly as much… probably because there isn’t anything good coming out to replace it with. I was buying ’09 UD Black NFL cases for $820 about 6 to 8 months ago. Now, they’re back up to the $975 range again. Likely due to absolutely nothing coming to market to drive demand. Nothing has any current NFL star autos in it that you actually have a chance of ‘hitting’, like some of the older products.
How bad is it? Well, lets just say I’m in on a case break of Hockey with 3 spots reserved. I collect football. It’s so bad I’ve resorted to hoping I can hit something from my favorite NHL team, the Penguins.
Why did these companies think they had a better plan than the free market system? They can’t even get a basic business plan right…
Panini and Upper Deck has made some changes to their distribution policies and it’s NOT just because they want to save the card shops. The fact is TOTAL sports card sales have been in a downward trend since the late 90’s and business as usual is not the answer.
If internet sales is the future, why do the manufacturers need ANY internet retailers. Panini and Upper Deck could just run a retail store, sell everything directly to the public and pocket 100% of the profit. And, the customer could economically benifit by a sales structure that eliminated the middle man.
This great hobby peaked in the 90s, well before internet sales. As company sales continued to maintain acceptable levels in the early 2000’s and as internet sales became dominent, the remaining card companies (several card companies went out of business) thought all was well enough and really did not care if card shops existed. However, as huge numbers of collectors left this hobby, the card companies started to examine this oversaturated top-heavy distribution system.
Downsizing to this distribution system has resulted, and the fact is companies have the legal right to pick their representatives as they deem necessary for the best of its product and company.
As I stated above, the card manufacturers know how to run an internet store. They could do it themselves and pocket 100% of the profit. What they realize is they need to maintain a healthy number of in-the-field sales representatives. That’s where B & M Storefront Card Shops serve a purpose. Card Shop owners are the face of the manufacturers to the new collector who knows nothing about the hobby and is looking for answers from someone they can look in the eye.
Not every current card shop owner, knows how to run a business or how to be a worthy representative of the card manufacturers. They will continue to be weeded out and replaced. However, these economic times requires something be done. And, I believe that Panini and Upper Deck has made changes that will strengthen this hobby.
I have also spent thousands less on cards in 2011 than I have the last few years.
Although busting wax is fun, it doesn’t make sense. You spend $80 on a box and you get $20 worth of cards in that box 9 times out of 10.
Buying singles on ebay is a lot more appealing to me these days. I look for guys I collect, bid on a card and pay a fair market price for it.
I actually have two LCS within about 15 minutes from me. I haven’t been to any of them in over a year because they can’t compete with Blowout or eBay.
One owner is a photographer by trade so he uses the store to sell pictures and has a ton of mid-tier autograph signings that support the shop. He carries very little wax and has a few display cases of junk, so I really have no reason to go in there.
My second local LCS has tons of wax, but he’s usually 30-50% higher than Blowout. I don’t mind spending an extra $5 or $10 to support the shop but when I can get three boxes online or only two in the store Blowout wins everyone. This LCS has survived by having CCG games all the time, and I’ve seen those kids drop 100’s on that stuff.
The point is the LCS that are still around me have made it because they were smart enough to add additional revenue streams. I don’t think having the newest turd by Panini on their shelves is going to help them all that much.
We just lost another giant bookseller because the Internet is king, not because the publishers decided to support the mom and pop stores. These antiquated policies are a step in the wrong direction.
In my opinion the problem has nothing to do with distribution. The root of the problem is two-fold: the companies aren’t producing products consumers want and exclusive agreements put significant limits on consumer options. Take away Panini’s exclusive NBA license and I doubt Panini lasts more than a few years given the quality and design of the current product offerings.
As a general rule, if you want to make money in any business you have to have a product people want. If you’ve got a product that is in high demand, often consumers will choose to purchase that product as fast as they rather than as cheaply as they can. I loved Goodwin Champs. As a result I went to the LCS so that I could have it now rather than wait for shipping. On the other hand, most products I just don’t care that much about so I’ll wait until I can find a bargain online.
The other problem is the exclusive licensing. I was primarily an NBA collector before Panini took over. I simply cannot stand the design of their products. I have no desire to own any of the Panini cards I’ve seen. However, I can see how they might appeal to a younger crowed. Let Upper Deck and Topps back into the game and guess what: I’ll go back to buying boxes of NBA cards like I use to. The same can be said for the NFL, MLB, and individual players.
Another significant problem with the hobby right now is the complete lack of value in most products. In the collecting world value comes from scarcity: true scarcity, not artificial scarcity. All companies are guilty of taking the same card and paralleling it to no end. Given that the card numbered 1/1 looks almost identical to the one number 3783/39433 (which might even have a nicer looking patch), do you really think the 1/1 is “worth” more to me? Nope. I’ll take the cheaper one. A 1/1 should be 100% unique and extremely hard to find: even in the age of eBay. The market has also become completely saturated with jersey cards and scrub sticker autos. I’d much rather have a product that yielded one on-card auto of a star per two boxes and cost $50 per box than a product that yields three shit jersey’s per box and runs $120 per box. Make the chase for “hits” exciting again rather than expected an mundane.
Before you spout statements like “Take away Panini’s exclusive NBA license and I doubt Panini lasts more than a few years…” know the overall picture. The Panini group saw profits of almost 900 million in ’09 and then over a billion in ’10. They know what they are doing. Keep in mind the card collecting word extends far beyond those of us on blogs and message boards.
The reason for pushing LCS sales is that they still bring in a fair share of overall revenue for the manufacturers. Older collectors, parents, kids etc… still buy most of their cards at shops and retail stores.
As far as exclusive licenses that is %100 the fault of the various leagues, not the manufacturers. Just like everything else it too will pass.
Alright, educate me: what percentage of that overall profit came strictly from North American basketball card sales? I’m well aware of their very successful sticker business overseas and here in North America (I’ve been a non-sports collector longer than I’ve been a sports card collector) and I’m willing to bet that the majority of the profits are from that. Panini has secured several successful movie tie-ins with the demise of Inkworks a few years back. Believe it or not I am aware of more than my own opinion.
I would also imagine that a large part of the growth shown between 2009 and 2010 has to due with the acquisition of the Donruss family of brands as apposed to overall improvement of the products they offer. Its also a fairly poor argument to speak strictly about profit when you’re talking about the only option available. Of course they still made money: people still want cards and if Panini is the only option then that is what they’ll buy. Introduce competition into the basketball card market and lets track the profit numbers then. I’m guessing that when the consumer has a choice Panini’s profit won’t be quite as high.
I never questioned Panini’s business practice nor did I question the demand for basketball cards. My argument was simply that if consumers had a choice they wouldn’t choose Panini first (which, is of course, purely a subjective statement). Before you present a counter argument please make sure you address the point of discussion rather than something only tangentially related.
Older wax is going up in price because of simple supply and demand–more collectors are demanding it because the new stuff ain’t worth squat, which means supply is decreasing because they’re not printing any more of it. Therefore, price has to go up.
You are right in that the US portion of the operation is just a piece. By my point is stating they wouldn’t be around with out the NBA license is a reach at best.