Will the average collector be willing to let eBay store their collectibles in a physical warehouse? In today's column, Don Heiden, aka The Auction Professor, takes a look at the newly launched eBay Vault.
"What is eBay's Vault?" may be the first question many people will have. From a basic standpoint, it is simply a way for eBay to store valuable collectibles and make money doing so. eBay, though, did not create this sort of business model. The business of someone else storing and holding onto your valuable collectibles has been around for several years. eBay, however, is one of the largest companies to do so.
I have collected items my whole life, and part of the fun of collecting (to me and everyone I know), is being able to touch and hold your collection. So, the idea of paying someone else to hold your newest acquisition seems totally wrong to me.
Still and all, I do not collect items for their value per say, but rather I collect those items because I love them, either as nostalgia from my youth, or due to my personal connection with them. Toys or trading cards I had as a child always bring back fond memories to me, and that is why I love them so much.
Most average or traditional collectors want a physical object rather than an NFT (non-fungible token). An NFT only exists in the digital realm, and its value is not based on any form of a physical object, but rather a mythical assumption on value by the buyer.
The average collector will want to display their collection throughout their house, apartment, or office and will enjoy them on a daily basis. Being given a digital image of a collectible is just not the same thing as being able to pick it up and hold it in your hands.
To me, eBay's Vault is a way of turning their collectibles markets into an investable commodity. For an item to be accepted into the vault, it has to be valued at $750 or higher, it also has to be graded and pass eBay's own inspection, among other requirements.
As a reseller and dealer of collectibles, I can see the benefit of grading items to gain more value. Grading also establishes a set standard for each grade and condition, which is also important. But those are still tangible items that my buyers can hold.
This will always limit the amount of people using these sorts of services. High-end collectors and investors will clearly be the main users of eBay's Vault. While the average collector will likely stay away.
A big fear of many collectors, such as myself, is that turning collectibles into an investment will artificially increase the costs of collecting as a whole. Comic books and trading cards are already at all-time highs, and this will likely further increase those prices. This would, in turn, also increase the overall costs of collecting in general.
What would happen to the collectibles market if, or when, the pricing bubble bursts? Would the investors bail on the market leaving it in a free fall? I remember the 1990s and the trading card and comic book crash that happened in that decade. The values of vast amounts of items plummeted almost overnight. And that was not the first time that has happened either.
eBay has already moved into digital and investable items, through their NFT partnerships
. The eBay Vault seems to be a further expansion in that direction, which is backed up by eBay's VP of Collectibles, Electronics, and Home, Dawn Block, who stated
that "the eBay vault is a critical offering that will let collectors streamline and securely store their portfolio of assets."
The key words in eBay's statement - "their portfolio of assets" - speaks volumes to me. It does not at all seem to be in the best interest of most collectors. Statements like that lead me to believe that it is only about the value investors will bring to those markets, and the amount of money that eBay could make from those investors.
We must also consider that other businesses use the "Vault" structure to allow fractionalizing or sharing of items, so that they can then be monetized. This allows the owner of say the highly sought-after comic book, Amazing Fantasy 15 (the first appearance of Spiderman), to sell shares of the comic to many investors.
The comic book can sell for tens of thousands of dollars, which is something only a few people could afford to buy. Selling shares of the comic book would allow those with less financial means to hold a part ownership in the comic book. But they would still not be able to actually hold or touch it.
Time will tell where eBay goes with this, or if it is successful for them. However, the typical collector will have to wait and hope that this shift in major collectibles markets will not destroy their hobby.
Don Heiden is a 30-year veteran of online reselling and runs The Auction Professor YouTube channel posting videos and content about various reselling platforms and topics. He is a member of the eBay, Amazon, Hip, and other affiliate programs where he may earn a commission when linking to products on those sites. Read more about the Auction Professor on EcommerceBytes.