Friday, December 10, 2004
Bubble of the Day
The comic bubble of the 90s, as told by a comic dealer - illustrates some classic bubble dynamics:
"...Valiant books were just insane. Being a brand new comic universe, new characters were introduced every issue. New comics soon doubled in price just because it had the first appearance of a minor character. Even old issues of Magnus Robot Fighter, previously ignored and looked down upon, were flying off shelves. Image comics were popular just because they were Image comics. Early image was staffed by folks who knew how to draw, but not how to run a business. Early issues were often ridiculously late and even more poorly drawn then usual. But people still bought them. I didn't understand it, I just sold them.
I very clearly remember the beginning of the end. It was at a comic show in Portland, hosted by Dark Horse Comics. For months, collectors were trying to find a copy of Magnus Robot Fighter #12, the first appearance of Turok. The reason being, Valiant was about to launch Turok's own comic book, and investors and speculators were looking for copies before it came out. What they didn't know is that most dealers HAD multiple copies of it, but were hording their copies until Turok #1 came out so they could sell it for big bucks. Not me, though - it just didn't feel like a good bet.
So anyway, this show happened to come out right after Turok #1 was released, and the joint was practically littered with copies of Magnus #12, all having magically materialized from various inventories. One dealer had rented a table just so he could sell his two long boxes full of Magnus #12. Turok was all over the damn place. And not a single dealer sold a single copy. The investors had totally vanished from the scene. The worm had turned, and comics fans were pissed off.
...Magic cards were THE perfect opportunity for their pump and dump schemes.
Here's how it works. Say a new card series comes out with a wholesale cost of $30 per box for a case of 10 boxes. That's $300. On day one, sports cards dealers would jack the price up to $75, well over the comfortable margin of $20-$30 per box. If they sell 4 boxes at $75, that nets them $300 right away. They've broken even. They can now drastically cut the price as low as they want and still make a profit on the case. By the second week, the price would drop from $75 to $35. Two weeks later, it would reach $20 or less. To ensure their profit margins, at least in my area, dealers would form their own little cartel and all agree to fix prices at the higher level. Smaller dealers, many of whom purchased their inventory from the larger dealers, tried to sell their boxes at a normal retail price and could not compete. They were gutting their own hobby.
Enter Magic cards. In an attempt to prolong demand and collectibility, Wizards of the Coast rationed all orders for Magic cards they received. So if a dealer ordered 100 boxes, WHAM, their order would be cut to 50 boxes. Dealers would receive maybe 10% of their order on launch date, receive their next 30% a month or so later, and so on. Needless to say, this tactic combined with sports card dealer greed and collector insanity did not result in a stable collecting environment. "
Highly recommended (via MeFi).