Collecting Posts

How Big are the Collectible Markets? Are we really spending $200 billion every year on them?

Young Christian Braun

Musings By Joschik

Christian is one of the founders of the hobbyDB project and this musings are sharing some of his collecting experience that are hopefully interesting.

I have always been interested in this subject and since starting my MBA in 1991 looked for studies or other data points.  I never found a satisfactory 3rd party study and ten years ago I commissioned the only one that I know of.  I am collating my thoughts and the various facts I found in this analysis.

The “Batmobile Thought”

I sometimes use the first Corgi Batmobile as an illustration of how big this market is (and when talking about the subject in the UK find that everybody in my age group had one!).

  • Corgi Toys sold 4,907,000 of them up to the end of 1968, the production run for its last year 1969 is not known and they were also sold in various gift-sets, so I assume a total of 5.2 million.
  • I further assume that more than one third of them still exist somewhere, almost all of them in collectors’ hands (and if some get unearthed today that is where they go).
  • Their value varies widely (there are 10 known variations and with conditions from poor to mint in box they can be worth anything from $5 to $2,000).
  • I assume that the average value is around $60.

This calculates to a total balance sheet value of $104 million for this casting alone and assuming a 12 year average hold period for vintage collectibles (7 years is the average for all collectibles) is correct translates into roughly $8.7 million in annual sales.  I checked this assumption against eBay which we believe has a 3% marketshare in collectibles but less for vintage items (due to an extent to age and internet savvy of sellers but to a much larger one on eBay’s policies in the last 6-7 years) and the 3% holds about true for this Batmobile model.  The Batmobile casting is one of about 4,000 Corgi castings (even if a very successful one) and Corgi is but one of thousands of brands in model cars.  Model Cars finally is just one of the 13 sub-market in Collectible Toys and Models (others are for example Slot Cars, Radio-Controlled Vehicles, Model Trains, Dolls and Bears).


The Hot Wheels Example

Hot Wheels is now a $1.1 billion brand.  While Mattel does not publish segment information of how much of that is spend by collectors (versus parents) many conversations with Mattel executives and others in the industry make me believe that measured by value it is around 20% (collectors pay significantly more per average model as they buy many Collector’s Editions).  That would represent $200 million in annual collectible sales in the Primary Market.
A typical Hot Wheels Collection

Since the brand started almost 50 years ago in 1968 Mattel has sold more than 5 billion Hot Wheels models.  Assuming that 15% of these survived in a condition suitable for collecting and an average price of $5 (I know this is all very rough) we come to a balance sheet number of $3.75 billion.  Further assuming a 10 year hold period we get to Hot Wheels products in the value of $375 million changing hands every year in the Secondary Markets.  As many of these transactions are sold as collections and therefore at a very large discount I assume the total sales to be more closer to $200 million for the Secondary Markets.

That results in a total of $400 million in sales for Hot Wheels.


The Collectable & Vintage Toys UK Market Size 

An MBA student analyzed this market for me in September 2006 by looking at sales on eBay, toy fairs, auction houses and other channels and came to the conclusion that is was valued at £310 million (around $627 million at the time).  With hindsight the study missed some sub-markets which I would estimate would have added around 10% of the total market.

UK Market Size Study from 2006
With the US constituting 2/3 of the collectible markets I believe that the UK represents about 1/15th of the world-wide market giving a total value of the Collectible Toy markets to be $10 billion per annum.


Collectible Models Sold in US Retail

The NPD Group is a market research company which monitors consumer purchase data from over 165,000 stores worldwide.  In 2012 they reported that Collectors bought around 15% of the total toys and models sold in monitored retail outlets in the US and that the total sales for these retailers was $23bn.

Model Kits on the Shelves

This does not account for eBay, other online channels, fairs, P2P sales and auction houses and is a larger number than my prediction (use the $10 billion number calculated earlier, adjust for 2/3 of that to be in the US and then for all missing channels).


Beyond Collectible Toys & Models

While I did the most of my research on the Toys & Models markets I have also monitored literature on other types of collectibles and have created a Segment Map which calculates the annual spend as $200 billion (this excludes the value of Classic Cars).

Collectible Segments

A few comments on the graph:

  • The size of the circles represents annual global trading of collectible segments and are based on similar type of assumptions or comments from experts (many of which are on on the hobbyDB Catalog Advisory Council)
  • Segment colors denote clusters, for example dark blue is for value based collectibles such as coins, stamps and shares
  • Concentration is an approximation on how many items make up a segment and how many of those are responsible for a large percentage of the sales in one segment – take PEZ Dispenser which would probably be less than 12,000 database entries (we consider that a very small number) or model cars where the Golden Brands (Corgi Toys, Dinky Toys, Hot Wheels, Matchbox, Minichamps, Wiking and maybe 4 or 5 other brands make up more than half of the total collectible sales.

 

How many of us Collectors are out there?

I have also run some calculations on the number of collectors worldwide and estimate it to be 75 million. This number is supported by research by Pam Danziger who runs Unity Marketing, the only firm that I found that had focused on researching collectible markets (they have now pivoted their focus to the Luxury Markets).  Pam had earlier been the Director of Competitive Analysis at Franklin Mint. One of their reports from October 2000 that was based on their regular omnibus questionnaire said “Some 42.9 million U.S. households, that is 42% of total households, report that someone in their household collects any collectible item, according to Unity Marketing’s latest consumer survey.  With an average of 1.7 individual collectors living in each collecting household, the total number of U.S. collectors is estimated at 72.9 million — about 35% of the total U.S. population!”  More about her finding can be found in her 2004 book called Why People Buy Things They don’t Need (you will find key excerpts here).


Growth of the Collectible Markets

Elroy Dimson, Emeritus Professor of Finance at London Business School did a study in 2014 on returns of Collectible Assets (which he calls Emotional Assets) since 1900 and calculated Nominal Returns over the period of 6.4% p.a. and Real Returns of 2.4%.  This dovetails with my estimate of an annual growth of the total market of around 3%.  That growth is fed by new collectibles entering the market (like those $200 million in Collectible Hot Wheels referred to earlier) and appreciation of collectibles already in Collectors’ hands.

Chinese Stamps

We see particular strong growth in some of the Emerging Markets, primarily in China and expect the relationship of 2/3 of collecting happening in the US to reverse over the next 20 years.

How Do Common Items Become Rare Collectibles?

We all know the story of Action Comics #1. Superman’s debut comic has become one of the most sought after rare collectibles of all time, selling for millions whenever it’s available for auction. If you want to have any chance of affording one, you have to basically be Nicholas Cage. Do you know how much Action Comics #1 went for when it came out in 1938? Ten cents. One Dime. Approximately the price of two candy bars. Many holy grail collectibles were once incredibly common items, but how exactly do these now rare collectibles become so insanely valuable? Well, it really boils down to basic economics, but there’s a little more to it than that.

demand-vs-supply11: Diminished Supply

It’s the first thing you learn in Economics 101, but it’s oftentimes easy to forget. The primary reason collectibles become rare is because there’s a ton of demand for an item and not enough of it to go around.

Many vintage collectibles – such as comic books, trading cards, etc. – were originally made to be disposable. After all, these were generally made for kids, so the goal was to get out as many copies as possible for as cheap as possible. So, sure, in 1939, you’d have no trouble finding Batman’s first appearance in Detective Comics #27. Nowadays, however, with so many copies of the comic lost or destroyed through time, you’d only be able to “easily” find one if you had unlimited money.

super mario bros

This isn’t an issue that plagues modern collectibles quite as much, since, you know, they’re usually a little sturdier because they’re made to collect (what a novel concept, right?). Still, the more disposable a beloved pop culture item is, the higher likelihood that it might be worth more as the supply dwindles decades later.

2: Condition and packaging

Earlier this year, we talked about a sealed copy of Super Mario Bros. selling for over $30,000 on eBay. To put this into perspective for non-gamers, Super Mario Bros. is one of the best selling and most easily obtainable video games ever made. You can get it digitally on Nintendo consoles for $5, and even a loose copy for the original Nintendo Entertainment System doesn’t run for more than $10 or $20. In other words, this is not a valuable cartridge by any means. That said, a sealed, mint condition box? Even if the cartridge isn’t valuable, a completely sealed box absolutely is. While we all know an item is more valuable the better condition it’s in, sometimes an item’s condition is the value.

3: Nostalgia and cultural importance

surgeIn 2014, people were spending anywhere from $50 to $100 on cans of Surge. Yes, as in the carbonated sugary beverage from the 90’s. In terms of collectibility, cans of soda usually rank pretty low on the list. I mean, you can’t exactly preserve the liquid in perfect condition, and it’s not as though it ages like fine wine.

Yet despite Surge technically being a lousy collectible, it has one very important thing going for it: nostalgia. From its packaging to its name, Surge is practically the embodiment of 90’s culture. Now, if there’s one thing we know to be true, it’s that people love nostalgia. And one of the best ways to retain those nostalgic memories is through collecting. If something happens to be super rare and in mint condition, that doesn’t necessarily mean it’s going to be super valuable. It’s us, the collectors, who make these items valuable through our desire for them. The hysteria over Surge goes to show how far people are willing to go to recapture a piece of their past lost in time, even if it is just a can of soda.

Consider Hot Wheels… the nostalgia of playing with those cars is incredibly strong with collectors. Compare that to Beanie Babies, who were at the center of an often hostile collecting universe. They were cute, nicely designed toys, but not a lot of great memories attached to those stuffies, unfortunately. Even the rare, pristine copies are not as valuable as people wish.

1976 Apple Computer Sells Close to $1 Million… What Did We Toss Out?

Values of rarities are only perceived figures and are subjective to the beholder. Only two people have to have this perception, the buyer and the seller. At a recent auction, both parties were apparently pleased at the price for a 1976 Apple computer at almost a million bucks.

vintage computerBonham’s groundbreaking History of Science Auction held in New York in 2015. Offered were 288 lots including items ranging from 18th-century pocket globes to the ilk of 20th-century tech.

The star of the show was a motherboard retaining a label reading, “Apple Computer 1 / Palo Alto, Ca. Copyright 1976. Let’s face it, not a pretty object, but historically very significant in the digital world. The bottom line is when the bidding ended and the dust settled, Apple 1 sold for an astonishing $905,000.

 Will Vintage Computers/ Video Games be the Next Antique?

There is a definite surge in the collecting of old computer equipment and early video games, as well as video game consoles. MAkes you wonder what he threw out in the 1970s. Tossing out obsolete items is nothing new, and actually part of the puzzle that makes something collectible. We connect with different sorts of things depending on our place in time. Generally people who used early computers and played video games early on couldn’t wait to get the latest and rid of the passé’ clunkers. As time moves on, some of us relate to these objects from the ‘good old days” and become enamored with our previously disregarded Atari or Commodore 64 (fill in the blank).

A laptop Bill Clinton used to send an email to astronaut John Glenn in 1998 sold for $60,000. This is only the beginning, there will be more auction records set as time goes on.

Can a Discarded Computer Save Your Life?

In an unrelated recent story, the short answer is, yes. Just a few years ago a Siberian man was at a local dump scavenging for scrap metal to sell, at the same time a large bear was also scavenging for food. As their paths crossed and the bear attacked him. The unnamed man picked up an old discarded computer and bashed the bear on the head with it, sending the tech-challenged bear fleeing.

It’s never a good idea to hoard, but if you have something unique, yet outdated in the tech world, think twice before making it become landfill. If you are not lucky enough to watch it go up in value, you still may be able to ward off a hungry bear or two with it.

Tomica 1/64 Cars Went From JDM to Worldwide Since 1970

Tomica started as a brand of scale models of Japanese cars for the Japanese market. But in the early 1970s, the brand expanded worldwide, and soon, Tomica 1/64 cars represented many European and North American models. Here’s a brief history of their production and expansion during the decade. By the way, Tomica designed their cars to be roughly the same size and stamped the actual scale on the chassis of each. We use “1/64” as shorthand for cars of about that size.

Tomica models made since 1970 by the TOMY Kogyo Co of Katsuka in Tokyo, Japan. The scale is about 1/60 or 2 ½ “inches long to fit a standard box size, similar to Matchbox or Hot Wheels diecast).

The first Tomica dieacast: #1 Nissan Bluebird SSS coupe (green in image above, last produced 1974), #2 Toyota Corona Mark II 1900 HT (yellow, ast produced 1975), #3 Toyota Crown Deluxe (brown-gold, last produced 1974), #5 Toyota 2000 GT (white, foreground, last produced 1981), #6 Nissan Fairlady Z (white, rear, last produced 1976), #7 Honda 1300 Coupe 9 (red, last produced 1975)

tomica police car

#4 Toyota Crown Deluxe Police Japan car (last produced 1972)

For 1971 they added 23 cars (20 cars was made in japan, 3 cars made in Hong Kong)

The Hong Kong models: #10 Honda NIII 360 (last produced in 1974), #11 Toyota Corolla Sprinter 1200 SL (last produced in 1974), #12 Mazda Capella Rotary coupe (last produced in 1974). Three cars made Hong Kong (new models at 1972) #30 Mitsubishi Galant GTO (last produced in 1975), #33 Nissan Cedric (last produced in 1975), #42 Datsun 1300 Truck (last produced in 1975)

In 1973 Tomica added 20 new models, in 1974 added 18 new models, in 1975 added 35 new models, and 1976 added 29 new models (15 new models of Japanese cars “black box “and 14 new models foreign cars “blue box”). The blue box line included more German, Italian, French, English, and American models.

tomica blue box

Japanese black box and Foreign blue box designs

After 1975, two models above (#11 Toyota Corolla Sprinter 1200 SL and # 42 Datsun 1300 Truck)  were made in Japan, while the 4 other cars were made in Hong Kong.

For 1977 they added 18 new JDM cars and 24 new model foreign cars.

Until 1988 there were 114 models of foreign car and 297 models of Japanese cars. By then, most of Tomica’s diecast models were made in China. But Japan still produced a few models.

tomica 1977 box

New box designs for 1977 Tomica vehicles.

In 1989, Tomica combined Japanese and foreign range still stands at 120 models.

tomica new box

Tomica offered 120 diecast vehicles in 1989.

Tomica grew every year after 1989 , they produced 12 new models car (12 new models, and 12 old models cars ). Their catalog shows 120 number car

At 2000 Tomica has celebrated 30 years of diecast. They produced reissue from the old models, with different boxes.

tomica anniversary box

In 2000, Tomica reissued some original designs in retro packaging.

In 2009 Tomica moved production to Vietnam, with a new logo “TAKARA TOMY”.

Tomica made cars under other names for toys shops, Ikeda ( Nissan Bluebird SSS coupe made in japan)

Besides colors and tampos designs, there are many variants of Tomica models:

-Wheels

The original wheels from Tomica are called 1A wheels (japan production)

tomica 1a wheels

The original wheels from Tomica are called 1A wheels (japan production)

tomica 1e wheels

Second Japan production wheels there name 1E wheels ( japan production).

tomica 1f wheels

Tomica 1f wheels

tomica 1b wheels

Hong Kong Wheels have named 1B wheels (Hong Kong production)

tomica 2f wheels

2F wheels (left) and 2FG (Japan and China production)

tomica 18 alg wheels

The Construction Terex wheel loader has wheels name 18ALG (LG = Light Green)

In Japan, China production

tomica 1h wheels

The most popular wheels in Tomica 1 H wheels ( japan and china production)

tomica 12f wheels

Fat wheels we can found at some truck-like chevy pick up 12F and 12FW (W=white)

tomica 15a wheels

This Lamborghini Cheetah has 15A wheels.

Lancia Stratos 1 J wheels (left) and 1 K (notice the different, tampo too).

tomica 12f wheels

Fat wheels we can found at some truck-like Chevy pickup 12F and 12FW (W=white)

Tomica 10c 10d wheels

For truck the wheels 10 C, Japan only production (old wheels ) and 10 D (new wheels ) Japan and China production.

Like Matchbox Tomica offers some variation likes variation window, interior, or type model of lamp…

tomica poilice fire cars

Some variations include emergency lights (Cadillac) and sirens (Toyota Crown)

tomica landcruiser

Variaints of the Toyota Landcruiser by Tomica

tomica citroen h truck

Citroen H truck with variation in window, lamp, and color door.

tomica cadillac ambulance

Different color lights on these Cadillac ambulances

tomica toyota hiace

Different variants of the Tomica Toyota Hiace

tomica honda city

Honda City variants with interior color

tomica nissan bluebird

Tomica made cars under other names for toys shops, Ikeda (Nissan Bluebird SSS coupe made in Japan)

Tomica also offered a number of two wheeled vehicles.

tomica motorcycles

Models of motorcycles (Honda Dax, Suzuki Gemma, Suzuki Van Van, Yamaha TX 750, and Honda CB 750 F)

In 1975 Tomica began producing gift sets. Tomica made some themes, like transportation gift set, construction gift set, race car gift set, supercar gift set, police gift set, emergency gift set, etc. A very special and huge gift set is the 80 pieces Tomica Osaka castle gifset, ”Super Gift Set” issued to commemorate the 400 year anniversary of Osaka castle. Another rare one is the Wedding gift set. This was issued ONLY to guests at the wedding of the son of Tomy President in April 1983. The set comprises of eight pieces: Toyota soarer, Toyota Celica, Nissan Skylines, Nissan Skyline Silhouette, Honda City Turbo, Hino skeleton bus, Ford truck, and chevy van.

tomica gift set 1

Police gift set (made in Japan) and Transporter gift set  made in Japan)

tomica gift set 2

An British car gift set (made in Japan ) and Food car gift set (made in China)

tomica gift set 3

A Race car gift set  made in china) and Delivery Truck gift set (made in china)

As of today, Tomica has produced over one thousand models of car and over million variations.