Where Have All the Collectors Gone?

Shrinking shows, falling secondary market values, collapsing consumer publications, and collectibles vendors refocusing their efforts on gifts and home decor products all indicate that the traditional collectibles market is continuing to decline. Yet collecting itself is flourishing, particularly at the online marketplace eBay, one of the few unequivocal e-commerce triumphs. What is the secret to eBay's success? Is the site revitalizing collecting, or cannibalizing a struggling industry? And can independent retailers compete with the online marketplace, or is there some way to take advantage of it?

EBay's auction marketplace sells everything from laboratory equipment to real estate. Still, collectibles remains by far the largest category, with more than 1.4 million items listed in a single day. However, eBay's definition of collectibles is much broader than the product one would see at Rosemont or in the pages of Gifts & Dec. EBay serves collectors of everything from antique thermometers to blowtorches. In cyberspace, the definition of collectibles adapts to keep pace with customer interest. But the site also includes merchandise from the traditional collectibles category. "We have strong followings behind a lot of contemporary collectibles product lines," says Kevin Pursglove, eBay's senior director of communications.

"Collectors are at the heart and soul of eBay," continues Pursglove. "A lot of people maybe don't really consider themselves collectors, but they stumble across something cool, and buy it. Then they buy another, and pretty soon they're a collector even if they don't call themselves that." Pursglove says that collectors make up 50 to 55 percent of attendees at eBay special events.

EBay has incorporated classic community building techniques into its strategy for attracting collectors. The site works with outside companies to carry out charitable promotions, such as one with the Wall Street Journal to raise money for journalism school scholarships, and another with Willitts Designs to raise funds to fight breast cancer. The site also recently teamed up with major manufacturers, including Disney, Fenton Art Glass, San Francisco Music Box Co., and Steiff, to add a Collectors Clubs page, and has 14 listed clubs so far.

"Ebay is a community where people interact based on related interests. But for a long time we didn't have a place on the site where users could find clubs and meet other people," explains Rachel Makool, senior category manager of collectibles for eBay. Makool hopes that the total number of clubs will eventually grow to 30 or 40.

But not all of eBay's users have waited for the Web site to create their own sense of community. There are chat rooms and discussion boards, and groups of eBay users gather for special occasions, such as those who used their eBay IDs to identify each other at a Barbie convention. Says Makool: "Particularly in the collectibles category, users are incredibly active in communicating with each other."

EBay can also provide an enlightening snapshot of what the collecting public is looking for, providing many lessons for collectibles retailers.

"EBay is a pretty immediate reflection of buying and selling habits," says Makool. "If you're seeing a drop off in traditional lines among younger people, that's probably accurate."

Whether it's because eBay makes monitoring trends quicker and easier, or because the medium appeals to risk takers, eBay sellers tend to react fast and adjust their merchandise mix, sometimes even radically. "When they realize consumer demand is changing, they adapt to it," says Pursglove.

For collectibles retailers trying to maintain a sense of exclusivity and hold the line against discounting, the idea of a Web site where consumers can simply log on, find product from all over the country, and name their own price sounds like a nightmare. Yet Pursglove reports that the site has plenty of brick-and-mortar retailers selling under its auspices. (He would not disclose what percentage of eBay sellers are traditional retailers, although the company does track the information for internal use.)

Worries that eBay would bring down retail prices appear to have been exaggerated, since the vast majority of contemporary collectibles on eBay remain secondary market. "I don't have firm statistics," says Pursglove, "but I'd say that at least 80 to 90 percent of the collectibles market [on eBay] is retired product."

Fears that eBay depresses secondary market values continue, although Makool disputes this, citing research that says secondary market prices are higher because more interest has been generated in the merchandise.

EBay welcomes independent retailers and offers them a number of features to expedite business. There are now fixed-price options as well as the usual auctions, making it possible for the independent to maintain margins. One feature, called Stores, enables the independent retailer to establish a presence on eBay. The cost is a minimum of $9.95 per month. Those who do have Web sites, but don't necessarily sell online, can link from their home page directly to their eBay store, or subscribe to the Merchant Kit service that enables sellers to display eBay listings directly on their own site.

Because it is searchable, eBay's marketplace enables retailers to reach collectors with very specific, focused interests. In addition, it is inexpensive to list an item (anywhere from three cents to three dollars), giving sellers easy access to eBay's 5.5 million unique visitors each day — an audience that would be impossible for brick-and-mortar stores to reach through traditional channels.

While much of this may seem confusing to the independent retailer whose cyberspace experience is limited or non-existent, help is available. At last month's National Stationery Show, eBay teamed up with Whereoware, the gift and home decor b-to-b Web site, to produce an educational seminar on how to use auctions as a supplemental sales channel. It included first-hand accounts from retailers, and a step-by-step guide on how retailers can sell on eBay was distributed. The seminar will be repeated at the August New York International Gift Fair, and the guide will be available at www.whereoware.com this summer.

To reach out to its existing users, eBay will host eBay Live in Anaheim, California, from June 21 to 23. The event's $45 admission fee will include workshops on buying and selling, information about new features, the opportunity to meet eBay staffers, and more.

Ebay has changed the definition of the collector, and has given that collector a power he or she never had before. Buyers and sellers come together, and between them set the price for what they want to buy and sell. While that may not be practical for the brick-and-mortar retailer, there are a number of ways that the independent can tap this market.

It's a matter of exploring the options, and remembering: If you can't beat 'em, you should consider joining 'em.