Wal-Mart carrying Funko Pop! and other contemporary collectibles

On October 3, 2018 Wal-Mart announced that it will roll out a pop culture collectibles department in 3,500 stores beginning October 15. Those collectibles include the contemporary phenomenon that is Funko Pop!
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On October 3, 2018 Wal-Mart announced that it will roll out a pop culture collectibles department in 3,500 stores beginning October 15, with other stores to follow [https://bit.ly/2AazsFI]. The products offered will be exclusive to Wal-Mart, which has negotiated deals for a variety of pop culture collectibles from manufacturers such as Loot Crate [https://www.lootcrate.com], Funko [https://www.funko.com], McFarlane Toys [https://mcfarlane.com], and Culture Fly [https://culturefly.com]. Previously, Wal-Mart offered some of these manufacturer’s products on a non-exclusive basis through their toy departments.

Funko Pop!

If you’re going to invest in Funko Pop! figures for profit, keep your head in the game and sell when the time is right. Photo courtesy Pixabay

What does Wal-Mart hope to gain from this move, and what effect might it have on independent antique dealers and collectors, if any? In my opinion, the move will be good for all concerned.

Wal-Mart’s distribution is both deep and wide, and their entry into the pop culture collectibles market could make them the major player in a very short time. Until now, GameStop has been one of the biggest players in the collectibles market, with $636 million in annual collectibles revenue and $208 million in gross profit with gross margins in the mid 30 percent range [https://bit.ly/2pTeW6k]. According to GameStop’s CEO Shane Kim, the North American collectibles market is a $12 billion opportunity, but the market is “very fragmented.” Popular culture collectibles can be found everywhere: gift shops, toy stores, specialty retailers, and department stores such as Sears, Target, and Wal-Mart.

Although Funko makes a variety of products, most new “Pop!” vinyl figurines sell for around $20 retail in the U.S. secondary markets, have no price restrictions, and the revenues achieved are remarkable. The Australian site Finder.com [http ://finder.com] has analyzed data compiled by the Pop! Price Guide [www.poppriceguide.com] and claims that Funko Pop! figurines have an average return on investment of 442 percent, with one figurine potentially reaching a 64,900 percent ROI [https://bit.ly/2P2hxsX]. EBay’s sold items search bears out the ROI on these items: in the past 90 days, over 341,000 Funko Pop! items have sold, with a high price of $11,999 USD and a low price of about $30 (excluding outliers); 246 Pop! figurines sold for more than $1,000 USD. Finder.com reports: “Interestingly, most of the highly sought-after Pop! toys were released between 2014 and 2015, meaning a substantial increase in market value over a very short period.” (ibid)

Such easy money can cause people to behave badly. In September 2018, a Florida man allegedly attacked a 64-year-old woman and her 41-year-old son outside a Target and stole the “Twinkie the Kid” Pop! figurine that the pair had just purchased. The Hostess Twinkie figure can be purchased for about $10 at Target and sells for about $150 on eBay [https://bit.ly/2QS2KhM].

How can dealers benefit from the Pop! phenomenon? I can think of at least three ways:

An increase in store traffic. For at least two decades antique dealers have searched for ways to capture the “younger generations” as customers. Wal-Mart is making that job easier; Wal-Marts are everywhere and featuring these collectibles in a dedicated store section gives the products greater visibility and significance. Collectibles dealers who purchase Pop! items (and advertise that they have them) will undoubtedly see an increase in traffic. Not all Pop! buyers are adolescents, as evidenced by the 41-year-old buyer mentioned above. Once such buyers are in one’s store, a savvy dealer will introduce them to other collectibles in inventory.

An increase in one’s local “collectibles buyer’s pool.” Wal-Mart has lots of traffic and a big advertising budget. Antique and collectibles dealers will benefit from the new buyers that Wal-Mart brings to the market.

A dealer can become a reseller. There are two ways to do this: become an authorized Funko Pop! dealer [https ://www.funko.com/resellers] or buy Pop! lots on eBay (search “funko pop lot”) and re-sell them as single items in their store or online.

Collectors, too, can benefit from the Funko Pop! craze, provided that their motivation is to collect rather than to profit. Yes, there is short-term profit to be made (I’m a huge fan of short-term profit), but I’ve seen too many pop-culture collectible phenomenons turn sour after a few years. Remember Beanie Babies? Cabbage Patch Kids? Norman Rockwell plates? Precious Moments figurines? When these items were “hot,” consumers were convinced to buy them because they were becoming scarce, and a quick check of eBay would prove that point.

But, “scarce” isn’t the same thing as “rare.” By strict definition, scarcity occurs when the manufactured supply is insufficient to meet demand. That’s seldom the case with manufactured collectibles; even “limited editions” can be repeatedly manufactured to increase supply. “Limited edition” doesn’t always mean limited in number; such editions may be produced in multiple series. For example, the Thomas Kinkade image “Italian Café” comes in five editions, three sizes, and two mediums, in prices ranging from $175 to $4,740. All are designated “limited edition.” Kinkade Studios tells its buyers: “This (Italian Café) Limited Edition title is normally stretched and/or prepared individually for each order.” In other words, it is printed on demand. When a collectible is advertised as “limited,” find out exactly how it is limited. 

Manufactured collectibles become scarce when buyers hold on to them, waiting for the price to peak. But, this doesn’t make them rare; there are more than enough in existence to meet demand. When consumers get caught up in the fever to buy something the market grows quickly and becomes saturated. When the bubble bursts, collectors end up stuck with their purchases. So, they better like what they have bought because they will be looking at it for a long time. Collect for fun, not for profit, because the future value of any collectible is uncertain.

The Funko Pop! phenomenon can be compared to the California Gold Rush: Those who were in early made big money; latecomers were stuck with worthless deeds. So, if you’re into the craze to make a profit, do so quickly. Don’t buy more than you can flip in sixty days, and don’t get greedy. If you’re into the craze to have fun, take your time and enjoy the ride. Either way, we have Wal-Mart to thank for boosting awareness. 

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