Spring Training is officially underway, and the 2018 season for Topps products is already starting off with all the hype you can handle.  

We are coming off a 2017 season where we saw Heritage prices continue to rise upon release, and preordered Bowman boxes sell for what seemed like crazy money at the time.  Most releases last year commanded a pretty penny upon release, but the mainstays like Series 2, Heritage High, and Topps Update came down to more reasonable levels in the months to follow.

However, it seems that the preorder window for the early 2018 releases fell right in the hype window, and we are seeing the full effects today.  Well, at least that’s the story some would have you believe.  As of mid-February, we have Heritage preorder prices as $1,300-$1,400 a case(compared to ($750-900) and Bowman Jumbo preorder prices at over $2,000 (compared to $800-$1000).  Stories of customers, hobby shops, and distributors getting their preorders reduced are abundant, and everyone is pointing fingers at the “true cause”.

Let’s take a look at some potential scenarios and see if we can determine what is going on and what the potential implications are.  Some of this is fact, some is speculation, all come from in person conversations or via experiences shared in online sports card forums.

Theory #1: What is Topps doing to US?

The target of some fingers is being pointed at Topps.  Sources indicate there was a modest increase in the price they sold to their direct customers and distributors, but nothing that comes close to justifying the prices we are seeing.  Some anecdotal evidence suggests the preorders Topps received for these early products were significantly higher than 2017, and the story is Topps chose to only moderately increase production.

If this is true, that is probably good for the hobby in the long run.  It helps keep the supply reasonable and avoids a glut on the market.  

However, based on the pack odds of Series 1, which was released a few weeks ago, production of that product was way up.  We’ll see if that holds true with these subsequent releases.

Theory #2 The Distributors are Evil

Other stories have been shared which outline rumors of distributors telling some customers that the distributor did not receive their full allocation, and therefore the hobby shop’s order would also have to be reduced.  They went on to say the same distributor gave a full allocation to their “large” customers, and then went so far as going back to the hobby shop in the coming weeks offering the product and full market price after “getting some more in”.  

The customers got the impression the distributor was intentionally holding back product so they could later sell it at full release cost vs. the original wholesale preorder price.

Breakers Are At It Again

Online Case breakers get a bad rap from what I can tell.  Yes, they have contributed to the increase in “hit” driven products, and yes, sometimes it appears that they get preferential treatment from some distributors or manufacturers, but they have also helped boost the overall size of the industry.  I see them as filling a needed market, and I don’t blame them for purchasing as much as they need to effectively run their business.

I have a hard time seeing how they are to blame in the current situation we find ourselves in.  Manufacturers and Distributors should allocate at an even percentage of orders, but this isn't the breakers fault.

Blowout is Cornering the Market

Blowout is big, real big.  Like it or not they effectively set the “retail” price on most products.  Stories started popping up last fall alleging they were able to get a larger share of Panini Prizm basketball than normal, which allowed them to set an artificially high price since the availability to other distributors was limited.  Those rumors resurfaced as the stories of baseball product allocations began to come out over the last couple months.  

Some argue that they are doing the same thing with baseball.  Others argue that they are artificially setting high prices and since they carry so much influence in the industry, those potential profits are encouraging the “product holdbacks” described above.  These high prices also create situations where collectors are almost assured to receive less value in the boxes and cases they open than in historical experience.

My conclusion

I think the reality of the situation is a mixture of all these things.  I think the popularity of the “Judge Frenzy” we saw last spring showed collectors were willing to pay the rapidly increasing prices Blowout and others were charging.  This showed Blowout that they might as well open their preorders at significantly increased prices for the subsequent product releases and customers continued to respond by buying them up at release.

Other collectors observed this and decided they needed to get in on the action for 2018 and either ordered more than they ever have before since it seemed like flipping sealed wax was like printing money!

That scenario would allow for the now inflated prices, distributors wanting to maximize their returns and holding some back, distributors not getting all the product that was preordered, and that in part due to some customers getting preferential allocations.

So what are the ramifications?  

This is where I think it gets interesting.

There are some reports of some large breakers of Topps Series1 losing money this year.  Increased production is leading to a combination of a more “watered down” product since hits, SPs, and parallels are being spread across more sealed packs, and a flood of opened singles and sets are on the market.  

This scenario is even more pronounced for collectors who paid full retail for their boxes and cases.  We are likely to see this same situation play out with Heritage in a couple weeks, and at an even higher pricing tier.  Finally, at the current preorder prices of Bowman, the majority of collectors will get nowhere close to their purchase price back in value, and that could be the third strike from the collector’s perspective.

Some online breakers are already saying they are refusing to break Bowman in quantity due to the inflated prices.  If this holds true, we could start to see the tide turn back towards normalcy.  Blowout and other retailers will be forced to lower prices since demand will fall.  

Every market has a tipping point, and I think we are getting close to seeing that happen with 2018 sealed wax.  My concern is that we may see the allure of short term greed damage the steady long term growth in the hobby that we need.

I guess time will tell.

I have a plan for 2018 that is being impacted both positively and negatively by the situation described above.  Read more about that plan here!

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