Scarce Collectibles Rule

collectibles

Streetwear, sneakers, and collectibles continue to make their way around social media. In the latest trend, these categories have moved into absolute luxury goods as Christie’s Auction House, the place that sold the most expensive painting in the world ever, the Salvador Mundi attributed to Leonardo DaVinci for $450 million, has now opened up a new department specializing in them. Following Sotheby’s lead, the auction house will now offer “buy it now” as well as “auction” type sales for special sneakers, avant garde streetwear like Supreme, Bape, and Commes des Garcons, and collectibles like Be@rbricks, game worn items, and sports cards. 

Why do these collectibles continue to increase in value and status that they are now in the same boat as fine art, rare design, and one of a kind dinosaur fossils? How can we utilize the same dynamics to create a successful brand for you? 

1 – Limited Edition is the definition of Collectibles 

The fear of missing out is a real issue for those of us living online. You had a chance to get something and now you feel bad for not getting it, after all, it’s just money versus having an object of a lifetime. By keeping products limited and underneath the estimated demand, your fans will flock to those items fast. So if you have 10,000 fans, and are planning to make a limited edition drop, make 20 or 25. You’ll be sure to sell out this time around, and everyone that didn’t get one is sure to set an alarm for your next drop or buy this drop in the secondary market for double the original price. 

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2 – Social Media Flex

If Zuckerburg had his way, we’d all be living in the metaverse with our phones on our faces. (Good thing he doesn’t … yet). However, we already live on social media. What we need to show off on social media, or what digital folks call a “flex”, is to have something that everything recognizes. Rare sneakers, fashion, or collectibles fit this category. Unique Art does not. (Imagine you spent a lot of money on a rarely seen Warhol and someone comments “who is the artist?” There goes your flex!) Prints do. For the flex to be effective it needs to be common but not so common. Sneakers, fashion, and collectibles fit perfectly.

3 – Collector mindset

The pandemic gave people a lot of time to think and find hobbies and things from their childhood. While fractionalization platforms have driven prices up, it is the ultimate collector that purchases the object for their own collection. It’s hard to characterize what the human need to collect is, but it is there. Whether one wants to collect the set of Virgil Abloh’s Nike collab sneakers, Keith Haring Pop Shops, Kaws Toys, or Action Comics, the desire to collect is there. Don’t underestimate this. Many artists haven’t and they exploit it by releasing multiple colorways of the same print, knowing that hard core collectors need them all. 

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4 – Inflation Resistant

The prevailing school of thought is that people flee to “hard assets” when interest rates go up or inflation goes up. This makes some sense as it is hard to do a discounted cash flow analysis on a Warhol Marilyn unique piece 1 of 1. (The answer will be zero since, unless you have a museum, the cash flow derived from it is zero.) Thus as the Fed continues to raise rates and Russia continues to wage war (the current primary cause of inflation), we will have more and more cash flow into the collectibles market.

Given these tips, there are a few takeaways. 

  1. Always keep things limited. This gives you the flexibility of doing pre-sales, of selling out, and of building hype. It also prevents you from having too much inventory and gives you the perception of a premium brand.
  2. Remember where people will show off your product. Most likely Instagram or TikTok will be where other people see your wares so make them as social friendly as possible.
  3. People love to complete sets and have a whole collection. Release different colorways, small tweaks, and other minor changes to maximize the creative impact of a product.
  4. Nothing you can do about inflation, but what it tells us is that the right time was yesterday!

Are you building out your limited edition product line? Let us know how you plan on getting it out there and positioning it amongst the new world of streetwear and collectibles!

Scarce Collectibles Rule via @famecastmedia

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