eTopps - Sports Cards: The Next Generation
by Matthew Crowder
March 20, 2003
With the advent of the internet you knew it
was only a matter of time before the card companies took advantage and
sold straight to the consumer. Why deal with middlemen (i.e. transportation,
packaging, resellers, grading companies, price guides, etc.) who cut into
your margins? Topps has made a bold entrance into this arena with www.etopps.com
and is quickly perfecting its program.
Sure, collectors can order IPO's of their favorite players and teams and
have eTopps send them in guaranteed mint condition in protective cases.
But the vast majority of collectors prefer to leave them with Topps and
hold them in their online card portfolios where they can monitor their
value as of their last eBay (tm) sale from hour to hour. Traders can jump
in and take advantage of changes in the value of players' cards to make
a quick buck or buy-and-hold their favorites. Buy-and-hold investors look
to the finite number of cards produced for each IPO and the new collectors
that will be flowing into the eTopps program for years to come. What did
that economics teacher say would happen when demand outstrips supply?
With eTopps, the card collecting hobby is morphing into a true electronic
exchange. With the standardization and liquidity eTopps has created you
really can invest in a player just like you do in a company's stock. If
the player performs markedly better your investment will increase in value
and you'll be able to easily trade your shares (er, cards) on the eBay
Trading Floor. The transaction can be consummated with a few clicks of
the mouse using an online payment service like PayPal (tm). With no need
for checks or money orders this works in many ways similar to stock market.
eBay and PayPal will take their cut just as your brokerage takes their
cut when you buy or sell stocks.
Many strategies have emerged among collectors and investors. Collectors
usually go after certain players, teams or assemble complete sets (sets
have been offered for over $2,000 - ouch!). On the other hand, investors
take other tacts. They can invest in rookie year issues like 2001 Alfonso
Soriano and Adam Dunn cards or cards of future major-leaguers like Wilson
Betemit and Joe Crede. A case can even be made for technical analysis
just like in the stock market - buy low and sell high by monitoring the
day-to-day activity of a card's price. The scarcity factor is an attraction
for others. While the eTopps program was just gaining traction in 2000
and 2001 many IPO's were produced in tiny quantities. There were only
186 cards of one football IPO, the 2001 Tony Banks, produced. That card
now sells for well over $200 on the eBay Trading Floor despite the lack
of success Banks has enjoyed! Don't you wish you had bought that card
at its IPO for only $6.50? New IPOs are released weekly and someday one
of today's IPO's may reach that value. This is where the collector's gauge
of a player's talent (and supply/demand analysis) is tested.
With eTopps still in its infancy there are many improvements to be made
to the system but after more than a year the significant glitches have
been worked out. Topping (no pun intended) the list of deficiencies are
the lack of statistics for cards held by Topps compared to those delivered
to the hands of collectors. It has been estimated approximately 85% of
the cards are held by Topps but exact numbers for each card are needed.
In addition, the portfolio interface needs to be updated to display the
collector's gain on cards from the purchase price, not the IPO price that
the collector may or may not have bought at.
What's next for eTopps? An eTopps Classics line of baseball cards will
feature the likes of Hank Aaron and Willie Mays. It's likely only a matter
of time before other card companies follow Topps' lead but don't under-estimate
Topps' first-mover advantage. Barring a catastrophe, eTopps will always
be the leader in this new generation of sports cards.
Will this spell the death of today's baseball card? Will fans kiss their
packs goodbye in favor of managing their card portfolios online? It's
too soon to tell. It's hard to picture two schoolchildren agreeing to
trade a Sosa card for a Bonds card and then logging on at home to make
the transfers. At the same time, this could prove to be a great educational
tool, interesting today's youth in investing at an early age. Whatever
comes of it, it will be fun to watch as it unfolds.
You've seen in it financial columns. I'll be the first to do it with eTopps!
For full disclosure purposes, the author owns shares of 2001 Adam Dunn
and 2002 Wilson Betemit at the time of this writing. :)
You can find more about Matt and cards by visiting him at www.cardtarget.com
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