How the market price of stickers is set?

[D8ct9r]

I hope that it is OK that I opened another thread. I searched the forum and found some threads that deal with prices, but every thread was just about how prices are formed on eBay or some other site, but I would like to discuss the price of stickers and collections from a slightly different standpoint, so I decided to open a new thread.

About a year ago I was dragged into the hobby of collecting Panini stickers (FIFA365 was responsible for that, but that’s another story), so I’m a real newbie in the Panini collection hobby. This however was not my first “meeting” with Panini stickers, because back in 2000 Slovenia qualified for EURO so my parents got me an album. This is an album that I will base my questions and hopefully discussion on, but the issue is more general (I think).

To get to the point… Album form 2000 stayed on my bookshelf for all those years and naturally it is not finished because we didn’t have the money to finish it (but I actually have some spare stickers). Album is far from mint condition, but hey it’s mine so I decided I was going to complete it.

eBay was my first choice and there I found something about the prices that I want to talk about.

Prices seemed high to me so I wanted to estimate the return if I was in the role of the seller and I found out something interesting based on current prices online (example is based on data from eBay that was extracted on 8th of April 2017).

For this calculation I picked the last sold sticker of Panini EURO 2000 (I tried to check that it was not one of the rare ones, which is another interesting phenomenon with Panini stickers, which I actually like ,with some stickers being rarer than others) and that sticker was Steffen Iversen.


Source: As seen on eBay

Calculation goes as shown below:

1. Selling Price: 1.99 EUR (similarly than in economics I will neglect the “transaction costs” which are postage costs in this case);
2. Purchase Price: 0.07 EUR (I don’t remember the price from 2000, but the assumption is that the rate between the price of album and a packet remained about the same today and then. Today this spread in Slovenia is around 30%-33% (0.6 EUR per packet and 1.9 EUR for album). At the time album was sold at the price of 250 SIT (currency that does not exist anymore, but is an equivalent of around 1.04 EUR today), so the price of packet would be around 0.35 EUR and the price of sticker 0.07 EUR. This calculation includes an assumption that all stickers are distributed equally, which I guess is not true because some stickers are rarer than other, but let’s say it holds for the sticker in question (I managed to get it back in 2000 when parents bought me just a few packs).
3. Number of years: 17

(Assuming that my assumptions are correct) I can conclude that the seller of this sticker made a return of 21.9% per year, which would mean that he’s just a little worse off than if he/she would invest into Apple stock in 2000 (annual return in the same period of 2000 – 2017 was 23.3%) and for example way above S&P 500, which generated an annual return of 4.6% in the same period. Price of 1.99 EUR is not a huge outlier because similar stickers are advertised somewhere between 1.5 EUR and 2.1 EUR.


Source: Own calculations and eBay- Calculations was prepared with Google Sheets


Source: Own calculations and Yahoo Finance- Calculations was prepared with Google Sheets


Source: Own calculations and Yahoo Finance- Calculations was prepared with Google Sheets

I chose Apple intentionally as this was one of the stocks that performed as one of the best stocks in the observed period, obviously coming up with a bunch of “iStuff”. So in theory investing into Panini stickers (and common ones at that) is just as profitable based on current prices as buying a stock of the company that basically changed the world in the past decade and a half.

From the buyer standpoint he/she needs to pay for postage costs also, which results in additional costs…

On the other hand if somebody wanted to buy the same sticker as a part of the whole Panini EURO set one would “only” pay 0.48 EUR for it (seller would still be better of than in the case of investing into S&P 500, again assuming that he paid around EUR 0.07 per sticker back in 2000, which is not accurate but it can't be that far off).

As per picture below it costs about 170 EUR to buy the set, which has 358 stickers. Based on this calculation it actually hurts the seller if the sticker is part of the whole set. I scrolled trough eBay and I found that this is true for most collections (that is price of single stickers combined into a collection is higher than a complete set).


Source: As seen on eBay


Source: Own calculations and Yahoo Finance- Calculations was prepared with Google Sheets

Right here a solution for my problem seems simple, buy the set for 170 EUR, take away 98 stickers I need to complete my collection and sell the rest 260 stickers and some 60 spares online, one by one and yield a profit of 470 EUR (-170 EUR +( (260+60)*2 EUR)). But here the liquidity (which I will mention below) of this strategy comes into question (hopefully some sellers will be able to share their experiences with this liquidity thing).

It is interesting that when it comes to swapping, which was my second choice after I realized that it would take quite some money to complete the EURO 2000 collection. Based on a very small sample size of my experiences (from the site that I will not mention, but I think is one of the largest sites for swapping stickers online) collectors also perceive stickers as valuable but they also factor in the postage costs. I was rejected multiple times (it was 6 or 7, but actually made 2 swaps) offering up to 5 stickers for swap, with the explanation that postage costs are too high to make a trade, which seems strange if I assume that each sticker is worth about 2 EUR (according to eBay) and postage costs are around 1-1.5 EUR per letter. One would think that it is a very good deal to pay 1.5 EUR for something worth 10 EUR (postage cost can be higher elsewhere, but I don’t thing is anything close to 10 EUR for a general letter).

To me it seems like the secondary market of stickers is acting like an oligopoly and sellers are acting according to the game theory, meaning that they are colluding to keep the prices high. They are obviously not colluding in the same sense that let’s say mobile operators or retail stores are, that is there is no secret meetings of Panini collectors where they would set a price and then “stick” to it (I’m not some crazy conspiracy guy). The real question here is how much “liquidity” is in the market. By liquidity I mean how fast stickers can be sold at such prices. If stickers can be sold quickly at those prices, then the prices actually reflect the market environment, but if it takes a lot of time to sell them then they are probably inflated. I don’t have enough experience to comment on the time that is needed to sell the stickers (are the stickers sold in the first auction or the auction needs to be repeated multiple times). Hopefully some of you might have an answer to this question.

I think that in the future prices will be lower even for older albums, because people keep storing them and in the few years the supply will be relatively higher than today as some will try to sell their collections. So by using basic economics higher supply pushes the prices down and if we take into account that today’s children are more interested in their mobile phones, computers, etc. and less in stickers (again an assumption), demand will also be lower in the future.

Some of the issues about pricing are also shown in the current prices of newer collection (2010 and newer). For example it is cheaper to buy a whole collection right after it is withdrawn from the market (example of EURO 2016) than it is to collect it in the old fashioned way by buying packets and swaping with friends, which I think is ruining the collection hobby.

To make my point I will use EURO 2016 collection … Even if one buys just the right amount of packets and gets no duplicates (impossible right?) he/she would spent more than 80 EUR, but now can sell it for around 40 EUR. So the optimal strategy is to buy the collection after it is removed from the market, meaning that buying and opening packets has a utility value of at least 40 EUR (60 EUR in my case as I spent 100 EUR to collect the stickers in the old fashioned way). Such a thing is practically impossible in the real economy, where one needs to make a profit in every stage of the business cycle in order to survive on the market. Also there is a question of what is the point of buying the whole collection right after it went off the market (assuming you are a collector and the collection was available on your domestic market)?


Source: As seen on eBay


Source: Own calculations and eBay - Calculations was prepared with Google Sheets

This calculation also holds for FIFA 365 series, which is the series I collect and have more knowledge about how much it cost me to finish the collection. So it must be that people that sell blow the “cost price” (from the stand point of us the common buyers in retail stores) of the product are associated with Panini or are just cutting their loses as they need to sell their inventories (so are mostly whole sellers that bought too much product in the first place). Others are storing the collection and if they are investor collectors they will try to sell it in the future meaning that even more sets will be available in the future, driving the prices even lower.

As I said I’m new to this hobby and I’m also guilty of buying one collection (I “invested” in Panini WM Frauen 2011 collection, which I saw online and thought that it was one of the coolest collections I have seen in my life, being the first female collection and with the “flawed” Korean team, etc.), but I look at Panini stickers as an expense, but in a good way like a drink with my friends, seeing a movie or traveling abroad, etc. it is just a thing that makes me happy onece or twice per year when new FIFA 365 or EURO/WC comes to market. Maybe I should add here that I keep my stickers loose, but the reason has nothing with keeping the value of a collection (I read on this site that loose collections are more valuable), but I’m just bad at precise sticking so I decided it is better to put my stickers into binders or in plastic bags, but excitment is there when I'm opening new packets.

So to conclude I don’t really see Panini stickers as an investment, meaning that I don’t expect the stickers to have/hold some monetary value, I have savings and stocks for that, but what about you? I would really like to read what you think. Do you see your collections as something that has real monetary value and you wish to sell them one day (that's the only way to make money, that is not only on paper)? It would be very interesting to run a survey among you to see the percentage of collectors that act as an investors and other that collect more out of the love for the hobby.

I will absolutely continue with the Panini stickers collecting in the “old fashioned way” because this is the whole point for me, but I’m still kind of sad that I will not be able to finish my EURO 2000 collection. But there are some much more things to do with 200 EUR than to buy stickers without the excitement which I get from opening pacckets and swapping for that last stickerI need, which I can do with current collections.

This was a very long post to ask a simple question at the end, but I would really like to read your opinion on the prices of stickers, do you buy and sell stickers/collections, do you keep them as an investment or just to enjoy them, etc.

I would like to add that I’m no expert in the field and this is just an opinion. Also this post is not a part of any research, but it would be really interesting to read your opinions.

 

[LeicesterRob]

Hi @D8ct9r Great post and analysis much deeper than I have ever considered. At some point I need to re-read it and take the info in better but I certainly agree on lots of points.

Collecting football stickers is the only hobby I have of this type (I have lots of interests and activities but nothing else like this).

I like to complete the album in the traditional way and also keep a second set unstuck (not always possible). For me it's not about monetary value and I don't do it to sell on either. However on occasions I have sold spares that I no longer need on eBay to raise new funds for new collections.

I certainly agree that we are seeing a peak for prices on eBay as we're seeing less and less new sticker collectors now (except for the big events when its almost acceptable to collect in public! LOL!). I'm an eighties child when Panini was enormous in the UK but I don't think we'll see a generation like ours again that will collect stickers in the same way (I hope I'm wrong).

Great detailed post and I'll re-read when the sun goes in (it's a scorcher today) and try to add some more thoughts!

 

[dantzig]

Very detailed post, my compliments for taking some time to share with us your thoughts... Like LeicesterRob, it's difficult to discuss every point you wrote and I was even lost a bit when you dwelved into so many calculations, so I'll answer the ones that were more interesting to me.

First of all, Euro 2000: let me tell you right away, it'll be incredible hard to sell every Euro 2000 sticker for 2€... Not only they are certainly not worth that in average, but you also have to take into account some "external factors", such as ebay/paypal fees, handling costs (time is money, right?), material used to protect, etc... If in average you get to half of it (1€ per sticker) I'd say it's a great achievement.

You also mentioned correctly about how values differ for each sticker and in Euro 2000 case, there are certainly some stickers rarer than others... If you're a seller, it's not good news because the rarer stickers are less than easy stickers... For example, most stickers from Group B were printed more, then there was also some promos with limited different stickers (you probably have seen stickers with different back colors, such as red or green), which makes the stickers selling for less than you expect... Of course, you can also overprice a sticker just because it's from a known player (such as Zidane), but in the end, you'll have to sell a good lot for less than you should.

Also, I was surprised with that complete set sale... I remember getting a near complete set (missing 6) for less than 50€ a couple of years ago on ebay and from those six, I got three on swaps and the other three I ordered from Panini at 1€ each (along with other collections, to save on shipping)... With just 3 bids, I would say it had a high price right from the beginning, so it's not really a good example about the real value of the collection... If it had a mint empty album, it would be more realistic, due to Euro 2000 albums being rarer (you can find more easily a complete Euro 88 album than a Euro 2000 album).

Now, about the "investments"... For me, they are investments for sure, which doesn't mean you can't have fun with them... This hobby has the best of two worlds: you can pay a lot for it, but still get the return later for most, if not all, while you're still having so much fun opening packs, finding swaps, getting new friends, etc... Can you do that with most things you do everyday? Drinking with friends increases your amusement, travelling makes you "richer" in culture and experiences... But in the end, you paid for all those things and won't get the finantial return... Of course, I'm completely fine if you and others see them just as entertainment.

You're right about how collections become so cheap after being out of stores... It's normal after Panini produced so much, so if the demand slumps and offer stays the same, of course prices drops... Doesn't mean it'll stay like that forever, at one point it'll start rising again... Some people say you can't use the same logic for Euro 2016 like you did with Euro 96, because nowadays, with the globalization, people have more access to stickers/cards, plus what you wrote about people getting more interested in other subjects like technology, but I believe at some point in the future, prices will increase anyway, even more early if the collection has rare stickers.

Since my fun is opening packs and making sets, I certainly take advantage of the price drop to do some extra sets and sometimes sells it later to late collectors... Doesn't mean I don't agree with you when you mentioned that it's much more fun to do the old fashioned way, spending the usual while the collection is "hot"... Obviously everyone enjoyed much more collecting Euro 2016 when the tournament still hadn't finished... If you're still concerned about how expensive it is doing it at those times, my advice is simple: sell your set before the prices drop or make some extra set later... Again, best of two worlds: you don't lose money and you got your share of fun doing the set while everyone was doing it too.

Talking about extra sets, I seriously need to check my incomplete sets and try to finish them... One bad thing about me is that I tend to lose interest when I'm reaching the end of a collection, that's why these days I order the remaining stickers from Panini

 

[D8ct9r]

Maybe I wrote everything in a too complicated fashion. I will try to put it simple:

My main point was that prices of older but common stickers are (too) high. I presented that by showing that the sticker which was sold for 2 EUR (I used on from EURO 2000 e as an example, but there are plenty more) in 2017 (and bought for around EUR 0.07 in 2000) generated an annual return of more than 20%, or to put it different its price grew by more than 20% each year for seventeen years. I tried to put that 20% annual growth in perspective by showing that Apple (the company that basically changed the world as we know it) stock had a similar growth in the same seventeen years. I know it’s hard to imagine that for anyone not involved in the stock market but it seemed appropriate to me to show that an image of a football player – I don’t mean that in a disrespectful manner – had a similar appreciation in price. Especially if one considers stickers as an investment, which was the second part of my question.

I basically based my post around a provocative thesis that older stickers are overpriced or that their price is artificially inflated (especially individual ones, but whole sets also) and that new sets (2010 and newer) once removed from stores are underpriced. I put in something called a “liquidity” of such prices by asking (for experience of readers as, I never sold any sticker online) if older stickers can be sold quickly at such prices or sellers just try to sell them at the high price for a very longtime and hoping that one day they will find somebody that will be willing to pay a high price. Dantzig made an interesting point that there were only 3 bids in the presented example, which I did not see before, but that is actually the “liquidity” of the price I’m talking about. It doesn’t seem that a lot of people were interested in it and thus it’s not really a good example about the real value of the collection.

I wanted to discuss this formation of prices of sticker online and asked a question if you (whoever will join a debate) as a collector think that stickers hold a real monetary value, which will grow in the future, in other words do you keep them as an investment also. Do you think that prices of some stickers are artificially inflated and don’t reflect the real value of the collection?

This seems like an interesting topic especially if my thesis holds, and I’m not saying it does, I just wanted to discuss it.

Again I see that the post got long I have more time on the weekends so I will join the discussion then, if there will be some discussion during the week.

 

[dantzig]

Maybe I wrote everything in a too complicated fashion. I will try to put it simple:

My main point was that prices of older but common stickers are (too) high. I presented that by showing that the sticker which was sold for 2 EUR (I used on from EURO 2000 e as an example, but there are plenty more) in 2017 (and bought for around EUR 0.07 in 2000) generated an annual return of more than 20%, or to put it different its price grew by more than 20% each year for seventeen years. I tried to put that 20% annual growth in perspective by showing that Apple (the company that basically changed the world as we know it) stock had a similar growth in the same seventeen years. I know it’s hard to imagine that for anyone not involved in the stock market but it seemed appropriate to me to show that an image of a football player – I don’t mean that in a disrespectful manner – had a similar appreciation in price. Especially if one considers stickers as an investment, which was the second part of my question.

I'm not really a pro about those annual growths, so I take it's true what you wrote... What I can tell you is that prices are indeed too high, even now I was checking some auctions ending and was flabbergasted with some final prices (lots of bids in every one of them)... For example, some guy was selling teams from France 98 sticker collection (around 16/17 per team, without shinies) and all of them were selling for at least 10€... But checking the bids, it was mainly some guy who was outbiding the others, so either he really wanted the stickers or it's just a fake account trying to bait for more kids... Still, there was two Euro 88 sticker lots, around 200 different each, selling for more than 250€! Guess I really need to keep updated with these, a couple of years ago, you could get these for half the price.

I basically based my post around a provocative thesis that older stickers are overpriced or that their price is artificially inflated (especially individual ones, but whole sets also) and that new sets (2010 and newer) once removed from stores are underpriced. I put in something called a “liquidity” of such prices by asking (for experience of readers as, I never sold any sticker online) if older stickers can be sold quickly at such prices or sellers just try to sell them at the high price for a very longtime and hoping that one day they will find somebody that will be willing to pay a high price. Dantzig made an interesting point that there were only 3 bids in the presented example, which I did not see before, but that is actually the “liquidity” of the price I’m talking about. It doesn’t seem that a lot of people were interested in it and thus it’s not really a good example about the real value of the collection.

Most sellers overprice what they're selling. The best way to figure out the real value of something is to follow auctions with the lowest starting price possible and then have lots of bids... And not just one, because there might be two or more bidders engaged in a "bid war", which inflates the price unnecessarily... eBay with their "Sold Listings" possibility is still the best option to analyze.

Just to clarify my point about the bids: it wasn't really about that "liquidity", it was more about the high starting price... You can have plenty of people interested in the item, but if the SP was too high, only some non-informed buyers would be willing to pay the amount, hence why I think that price was too high... Just to let people know, the example you gave had a 149€ starting price and it still sold for more 22€, but only due to the winner outbid a second bidder.

Number of bids might be deceiving, as you can see in this listing... Seems like this set had plenty of people interested, but checking the bids, it was only few people and one of them was just keep bidding... Again, not a good example of the "offer/demand truth" we're looking for.

I wanted to discuss this formation of prices of sticker online and asked a question if you (whoever will join a debate) as a collector think that stickers hold a real monetary value, which will grow in the future, in other words do you keep them as an investment also. Do you think that prices of some stickers are artificially inflated and don’t reflect the real value of the collection?

Depends on the perspective and of course, if you're informed about the stickers you're dealing with... I think part of the answer was written before, with sellers inflating prices based on what they think it's worth... Plenty of them are still selling Euro 2016 boxes and packs like they're still on stores and many newbies think they never lose value... But when people think some stickers are overpriced, they might be wrong... Panini defines what's rare or not, so if you don't want to be "eaten" in swaps or sales, you really need to understand what's this all about.

Euro 2016 had great examples about how you really need to pay attention not to "looks", but to "value"... Sticker collection was easy to understand: shinies were tougher, period. From this, you could also investigate some more: all shinies had same value? How many shinies in average per 50/100 packet box? But in the end, I believe everyone understood the logic of the collection.

But Adrenalyn cards... Oh, that's where so many mistakes happens, which means value/price inflated... Many cards that were supposed to be easy were actually quite tough to get, while others that seemed hard to get were actually quite easy... I think that even Panini doesn't understand their makers logic, judging from single cards prices.

So I guess there's not really a "black or white" answer about price inflation... Everyone is allowed to sell something at whichever price they want, but doesn't mean it'll sell... What determines an approximate true value of something are the crowded markets, with plenty of different bidders on something... If you go to fishing markets for example, there are plenty of people selling and buying lots of some fish or seafood, just like any fancy auction from Christie's or whatever... But if something doesn't grab general interest of particular audience, doesn't mean it's not valuable... Plenty of examples are in the antiques shops, where most of us don't even care about what it's sold there, but there's so many items with incredible value.