ACTION FIGURES AS AN INVESTMENT
Over the last decade, collectable action figures were ranked as the third most profitable investment behind a few types of 1960’s muscle cars and crude oil. I personally have seen the prices of GI Joes and Transformers go up at an unbelievably fast rate over the last few years, and this was the case with a very small group of people collecting them. There is no indication that this trend is slowing down, but rather that it is gaining momentum. This summer the second Transformers movie and the first GI Joe movie are coming out, and it looks like both of these are probably going to be trilogies. This should do a lot to increase interest in collecting the originals, but another important factor is that those of us who played with GI Joes and Transformers when we were kids are going from being in our twenties, to being in our thirties. As the target age group gets older, there will most likely be more people with money available to invest, and what better to invest in than something that is not only a great investment and very cool memorabilia, but is something that reminds you of some of your best childhood memories. As the number of people interested in 80’s action figures increases, the demand will increase. Since the supply will remain the same, the value of action figures has no where to go but up.
As far as the effect of the economic downturn, it seems to be having the opposite effect on collectables. Since action figures are tangible goods in limited supply, there is little chance that they will loose there value and are a relatively low risk investment. Although there are less people with money to invest when the economy is struggling, those who are looking to invest seem to be looking for alternatives to the stock market or high risk investments.
INVESTING VS. COLLECTING
Die hard collectors sometimes act like making money off of action figures is the unpardonable sin, and I guess if you’re a true collector only, the fact that action figures are going up in value is bad for you because it may cost you more to get the stuff you want. However, for me personally, there’s no way I could justify the time and expense I put into action figures if it wasn’t at least arguably partially for business. Also, unless you inspect it closely, an AFA 80 usually looks about the same as an 85 or even a 90. So, a lot of the high end stuff is geared towards collectors with an investing mindset.
I don’t know if this completely discredits me as a collector or just means that I’m not a nerd, but I have not been into action figures ever since I discovered them as a kid. I was really into GI Joes and Transformers from I believe ages 6-8 maybe 9, and then I guess I got into sports and sport cards and didn’t give action figures a second thought for almost 20 years. Then, a few years ago I came across some GI Joes on ebay. I thought it would be cool to own some of the ones I had (or wished I’d had) as a kid, so I spent a few hundred dollars on some loose figures and vehicles, and put them on display in my house. I really enjoyed them, found that they brought back a lot of good memories, and found that they were great conversation pieces. However, to be honest with you, if I had not started thinking of them as a good financial investment as well as memorabilia, there’s a good chance that would have been the extent of my collecting. After realizing that action figures could be a good investment, and realizing that there were certain tax benefits to having a business instead of a hobby, I began investing substantial amounts of both time and money into my new “hobby”. Since then I have spent countless hours researching figures and learning about GI Joe and Transformers history. I have watched all the GI Joes cartoons, watched all the Transformers cartoons, and read through the entire GI Joe marvel comic book series (155 comics). I have gone to the GI Joe convention, followed the Transformers and GI Joe movie productions with rapt attention, and have amassed quite a collection. My excuse was that I did all this for “business purposes”, but the truth was I did most of it just because I enjoyed it. Although some may disagree with me, I don’t think there’s anything wrong with making a business out of your hobby.
TIPS FOR INVESTING
If your new to the game, here are a couple of things that I had to learn the hard way, that you may want to consider:
USUALLY, BIGGER IS BETTER. Not when it comes to size, but when it comes to price. In most businesses, the profit percentage is more important than the profit amount, because if the percentages work, you increase the volume, and increase how much you make. You may be smart enough to figure out a way to streamline the buying and selling of vintage action figures, but in my experience it usually takes just about as much work to buy and sell something worth $4 as it does something worth $4,000. For example, lets say you buy one figure for $50 and another for $2,000. On both figures you have to find them on ebay, read the description, buy it, pay for shipping, unpack them, inspect them to make sure they are as described, and store them. Then if you want to sell them, you need to find them (this can be harder than you think), take pictures, write descriptions, list them on ebay, answer any questions, package them up, and ship them out. Lets say you had them both for one year prior to selling them, you spent $15 on shipping and listing fees on each, and they both go up 50% in value. However, you got a better deal on the cheaper one originally, so it sells for $100, and the other sells for $3,000. Percentage wise, you did better on the cheaper one, but the bottom line is that for roughly the same amount of work, you made $35 on one, and $985 on the other. Also, the reality is that the expensive action figures are usually expensive because they are rare, and thus percentage wise, they normally go up in value much quicker than the less expensive action figures. I know this probably sounds like a no-brainer, but you would be surprised. I have a half a room full of boxes full of action figures that I may never get around to using or selling, because I just don’t have the time or the desire. How did this happen? Sometimes it’s tuff to pass up a bargain. It’s very tempting to buy something for $25 that is worth $50, even though after all the cost involved, you’d be lucky to make anything. Obviously this does not apply to everyone. If you have plenty of time, but are short on money, this probably isn’t going to apply to you. My advice to those with very little money to invest would be this: If you enjoy buying and selling action figures as a hobby, go for it, but there are probably easier ways to make money.
INVESTMENT STRATEGY
When I first started collecting/investing in action figures, my first impulse was to spend a lot of time on ebay looking for the “steal”. It was during football season, so I would often spend most of Sunday watching football while trying to find and win auctions on stuff that I believed was under priced to the point that I could immediately sell it for more than I paid for it . To be honest with you, it can be rather fun. It’s kind of like going on a hunt, where your looking for that deal that you hope no one else noticed, you make your bid at the last second, and hope to come away with the spoils. In fact, I would recommend that you try it some time. However, as a business strategy, I can tell you that I am pretty sure I have lost a lot more money doing this than I have made, and I it was definitely not a profitable use of my time. If you know somewhere you can get vintage action figures for a cheap price outside of ebay, go for it. However, when it comes to ebay, you have to keep in mind that there are hundreds of other people who are also looking for the quick profit, a lot of them probably know more about the product than you do, and the saying “If it looks to good to be true, it probably is.” seems to be painfully true on ebay. In my experience, about 80% of the time that I have gotten what I believed was a great deal, it actually turned out to be a bad deal. Either it was not in the condition I expected, it did not turn out to be as valuable as I expected, or I never got the item. Part of this is also because, as mentioned above, a lot of the “steals” are on lower end items, so even if they weren’t bad deals, I still ended up with a lot of crap that is not worth taking the time to sell and I will probably end up just grouping it all together and selling it for a loss. However, even times when I thought there was no chance of getting screwed, something still would go wrong. For example, once I found an auction for an AFA 75 v1 Snake Eyes, and an AFA 80 Firefly. The seller had failed to include GI Joe in the title, so it appeared that no one else had found them. The starting bid on each was $350, and since I was the only bidder, I got them for $350 apiece. Although this was about two years ago, that was still about half of what they were selling for at the time, and I was pretty pumped. However, the seller notified me that they had been damaged in a flood and he would not be able to send them to me. Whether this was true or not, I don’t know, but I have had other times when I got a good deal on an AFA item and just never heard from the seller. Paypal and ebay can make a seller refund you your money, but they cannot make them send you something. So, if something sells for significantly less than the seller had hoped for, you may never get the item. Anyways, if you love to bargain hunt, knock yourself out, but if your serious about making good investments you may be disappointed with the results.
If you want a solid investment strategy, my advice would be this: Instead of focusing on buying stuff for less than it is currently worth, come up with a strategy on what type of items you think are going to increase significantly in value, try to buy them for a fair price, and plan on keeping them for at least a year before selling them. I know this is a lot like playing the stock market, which may not excite too many people right now, but in my opinion action figures are much easier to predict than the stock market because there are really only two factors. Valuable figures are rare and in demand. In other words the demand exceeds the supply. So, all you need to do is figure out which rare figures are going to increase in demand. So how do you do this? Here are a few strategies that have worked fairly well for me. Before the first Transformers movie came out, I found out which characters were going to be featured in the movie and invested more in these than the other characters and those figures did seem to increase in value more than the others after the movie came out. Another thing that I did was buy up as many rare foreign variants as I could (mostly pre-G1 Transformers made by Takara). Because they were kind of unknown, there was little demand for them at the time, and I was usually able to buy them for less than the American Hasbro ones, even though the Takara ones were much rarer. Even though they didn’t go up in value right away, they are now continuing to increase in value when others have slowed down, because it seems that every day more people find out about them, and every day the demand for them increases. I have found that seeing your investment double or triple in value because you made a smart investment is even more satisfying than getting a “steal”.
FOREIGN VARIANTS
Here are a few things you may want to keep in mind if you are considering investing in foreign variants: The reason foreign variants can be a good investment is because they are often very rare, but because not that many people know much about them, the demand is low. The strategy is that as awareness increases, demand increases, and they can take a significant jump in value. However, foreign variants are usually not a good item to try and make a quick profit on. There is a very good chance that at some point whatever variant you have will become a hot item, but it could take a week, or it could take a few years. It’s tough to predict when people will start wanting a particular variant.
Here are some questions you should ask when buying a variant:
- Is it a variant? If the actual figure or vehicle itself is exactly the same as the American one, it is probably worth less than the American one, not more.
- Is it rare? Just because a figure is a foreign variant, doesn’t necessarily mean it is rare and the degree of rareness varies significantly between variants. You can check AFA records to see how many have been graded, you can check Ebay history to see how many have sold recently, and for GI Joes you can read the section I’ve written on variants under Things Every GI Joe Collector Should Know to find out more about specific foreign variants.
- Is it authentic? If a figure says it is a “custom”, that means it is not original. If it is not AFA graded you might want to make sure that not only the figure, but that the accessories as well are original.
- Does it come with all its original accessories? Keep in mind that accessories are usually lost before the figure is. So, when it comes to rare variants, sometimes an accessory can be worth more than the figure itself. AFA will not grade a figure unless it has all original accessories with it. So, if it is graded you know it has all the original accessories, and if you plan to get a figure graded, you need to make sure you’ve done your research and that the figure is complete.
FIGURES VS. VEHICLES/PLAYSETS
You may be wondering whether figures or vehicles/ playsets are a better investment. I can only speak to GI Joes, since these are the only action figures I have collected that include vehicles and playsets. As far as GI Joes go, I don’t know that one is necessarily better than the other, but there are some differences which might be helpful to know. The main difference between the two, is that vehicles and playsets are much rarer than figures; especially the larger ones. There is roughly 7 or 8 times as many graded figures as there are vehicles/playsets, however the difference is even more drastic when you consider that some of the most popular figures are also some of the most prevalent, while some of the most popular vehicles/playsets are some of the most scarce. For example, there are over a hundred graded examples of both V1 Storm Shadow and V2 Snake Eyes, while there are only 2 or 3 graded examples of the USS Flagg and the Cobra Terror Drome. I guess while there were very few people who kept their figures in the package, almost nobody spent $50-$100 on a playset and left it in the box. At a recent GI Joe auction, a USS Flag sold for $18,000 and I believe a Terror Drome sold for around $12,000. This was considerably more than the highest selling GI Joe figure (an AFA 95 Firefly). While this may be an indication that vehicles and playsets are the hottest investment right now, there are some definite advantages to figures and some differences between the two. Here are a few differences/ pros and cons with each.
One difference is that the condition of the item (the overall grade if it is graded) is much more important when it comes to figures. It is not that the grade doesn’t matter when it comes to vehicles and playsets, but it does not matter nearly as much as it does with figures. First of all, vehicles and playsets usually grade much lower (the larger the item the harder it is for it to survive 25 years without showing any signs of wear). Secondly they are often very rare in any condition, thus the condition/grade has more to do with the items appearance (how well it displays) than causing it to be a rare item. With figures, it is just the opposite. It is not uncommon for a figure that received an overall grade of 85 to sell for twice as much as the same figure that received a grade of 80, or for an AFA 90 to sell for twice as much as an 85. If you took an AFA 80, set it next to an AFA 90, took a step back, and compared the two, they would probably be very similar in overall appearance. So why would someone pay four times as much for the 90? For the same reason people pay more for rare variants – when it comes to collectables, value is directly connected to how rare an item is. So, if you are just buying for your personal collection, you will probably be happy with AFA 80’s (or the equivalent condition) but if you are serious about investing, the rarest items may be your best bet.
The main advantage of vehicles and playsets is that they have the potential to bring in the most profit on resale. However, here are some of the disadvantages: They are tough to find, and when you do find what your looking for you may not know how much to pay for it since it is rarely up for sale (graded vehicles and playsets are rarely auctioned off). They can be expensive and time consuming to package and ship, they can be very expensive to grade (it cost me about $2,500 to ship a USS FLAGG to AFA, have it graded and shipped back), they are more difficult to store, they often incur wear or damage every time they are moved or shipped, and, if or when you decide to sell it, you may have a tough time determining how much to sell it for or finding a buyer who can afford to pay what it’s worth.
On the other side, MOC figures seem to be bought and sold almost daily on ebay, and while there seems to be a steady supply, there also seems to be a constant demand. This means that the pricing is much more competitive and thus there seems to be more of steady increase in value rather than an overnight jump. Here are some of the advantages to figures: Their easy to store, easy to package and ship, and relatively inexpensive to grade (with shipping about $40-$100 for a standard size figure). If you have MOC figures that have not been graded, you can buy STAR cases for about $2-3 apiece to keep them protected. Also, since they are regularly bought and sold on ebay, it is easier to determine what a fair price is, easier to find items to buy at a fair price, and easier to sell items quickly if priced correctly. This is based on my personal experience, which may differ from others, but I have found that while I have made more profit on vehicles/ playsets, they also take a lot more time and hassle. So, I have gone with investing in both.
WHAT YOU NEED TO KNOW ABOUT GI JOE
Here’s a few things that every collector/investor should know. First of all, if you don’t already own the ULTIMATE GUIDE TO GI JOE, I would recommend that you get it. This book is a great guide to the American GI Joes complete with pictures, descriptions, and lots of helpful information. You’ll probably notice that the price guide is no longer accurate, but this will give you an idea of how much GI Joes have gone up in value and can still give you an idea of which figures are the most valuable. There are a few things, however, that are not covered in the guide, such as AFA, cardbacks and foreign variants which are important to know about.
AFA
AFA stands for Action Figure Authority, a company which grades, authenticates, and encases action figures. This is very helpful for those interested in action figures as an investment because it is doubtful that people would spend thousands of dollars on a toy without assurance of its authenticity and condition. In fact, the existence and prevalent use of AFA is probably one of the main reasons that action figures are a viable investment. They also keep a record of everything they grade which is helpful in gauging the rarity of a particular item. If you see AFA followed by a number (AFA 80) in a description, this usually means that the item has been graded, authenticated, and encased by AFA and the number is usually the grade that it received. For more information on AFA, their grading procedures, and what they grade, you can visit their website – www.toygrader.com.
CARDBACKS
If you’ve wondered what people are talking about when they say a figure is an 11 back or a 34 back, they are referring to the number of pictures/figures featured on the back of the card which indicates when the figure was released. Here is a quick overview: In 1982, series 1 figures were released with straight arms (no swivel action). They started out on 9 back cards and then the Cobra Officer and Cobra Solider were added to make them 11 backs. In 1983, series 2 figures and series 1 figures (with swivel arms) were released on 20 back cards. In 1984, series 3 figures, as well as series 1 and 2 figures were released on 32 back cards. In 1985 series 4, as well as series 3 figures were released on 34 back cards. Sometime during 1985, series 5, series 4, and one series 3 figure (Storm Shadow) were released on 36 back cards. At this time the GI JOE logo on the front was changed from a flat logo to a 3-D logo and the file cards were changed from peach to grey. In 1987 series 6 was released on a 34 back card. After 1987 I think they stuck with the 34 back for a few years and then went to a 20 back or something, but nobody really cares at that point.
Here’s all you need to remember: For series 1-4 (’82-’85) the less pictures on the back the better. The one possible exception to this would be 32 vs. 34 backs. Since there was a limited release of the 34 backs, they actually seem to be rarer than the 32 backs and there seems to be little or no price difference between the two. Consequently, the biggest price difference is between 34 and 36 backs. Not only are the 34 backs in much shorter supply than the 36 backs, this is when they changed to the 3-D logo and the grey file card. One area of confusion that seems to come up with this is that once new collectors learn that peach file cards are better than grey, they want to know on every figure whether it has a peach or grey file card. Other than Storm Shadow, only series 4 figures (1985) can have either a peach or grey file card. All series 1-3 figures (1982-1984) have peach file cards. As far as series 4 figures, if it is a 34 back, it has a peach file card, if it is a 36 back, it has a grey file card.
FOREIGN VARIANTS
Here is a quick overview of some of the most popular foreign variants (starting with the rarest, and working towards the less rare). You can find more details (and pictures) on variants at YOJOE.COM.
ARGENTINA SECOND SERIES (ARGEN 7)
These variants are comprised of seven figures made by Plastirama in Argentina. Even though the first series made by Plastirama (1983) are swivel-arm figures from Hasbro series two and three, the second series (1984) are straight-arm figures that are variations of Hasbro series one figures. Apparently, Plastirama went out of business soon after it started making the second series, and very few were made. These are the rarest of the rare. They are very hard to find in any condition, and nearly impossible to find in good condition or complete with all original accessories. Included in this set is the Cobra Mortal, which is commonly recognized as the Holy Grail of loose GI Joe figures. Although you might not have seen an original Cobra Mortal, Hasbro made a convention exclusive Cobra Mortal variant in 2006 that came with the Cobra’s Most Wanted set, which you might have seen. Since there is no carded example of Cobra Mortal, and there are only a few loose figures in existence, the figure itself is shrouded in almost as much mystery as the character is portrayed to be.
FUNSKOOL (INDIA)
If your like I was, you may think that Funskool Joes are just one big pile of worthless crap. The truth is, this is about 99.99% right. The majority of Funskool stuff you see selling came out in the late 90’s or 2001/2002, is not rare, and is not really worth anything. However, Funskool is also the makers of some of the rarest, most valuable, and most sought after foreign variants. In 1988 Funskool released some very cool, and very rare variants. The most well known of these are the Light Blue Snake Eyes, Light Blue Hawk, and Red Stalker. Also included in this set is a Black and Silver Snake Eyes, Yellow and Black Torpedo, Yellow and Blue Major Bludd, Light Blue Short-Fuze, and 3 different Zap variants (bright green, dark green, different head).
BRAZIL (ESTRELA)
The two most popular variants from Brazil are the Cobra Invasor (Snake Eyes with a silver cobra emblem on his chest) and the Cobra De Aco ( a mix of different figure parts painted yellow, black, and silver with a chrome head and a red Cobra emblem). While neither of these figures is terribly hard to find in poor condition, they are both very hard to find in good condition since the Cobra emblem on Cobra Invasor rubs off very easily, and the chrome on the head of Cobra De Aco wears easily.
UK EXCLUSIVE ACTION FORCE FIGURES (1983)
In 1984 Action Force started making their figures look just like the American ones. However, in 1983 they released a very cool set of vehicle variants (there were no carded figures released). The good guys vehicles were black and yellow variations of the GI Joe/Cobra vehicles and the bad guys had red variations of various GI Joe/Cobra Vehicles with a skull and cross bones symbol instead of the Cobra symbol. Not only are these very cool variants because they include vehicles, but one of the best things about these is who is driving the vehicles. A Destro variant comes with a red HISS Tank variant, a Cobra Commander variant comes with a red MMS variant, a Snake Eyes variant comes with a black and yellow Stinger variant, and a Scarlett variant comes with a RAM motorcycle. As far as I know, these are the only foreign variations of either Destro or Cobra Commander. Another thing I like about these is that, while they are by no means easy to find, they are not nearly as hard to find as the Argen 7 or Funskool variants. I have gone an entire year before without seeing a single Argen 7, or Funskool variant come up for sale on Ebay, and while it might take some time to find these UK figures in good condition or to find all of them, if your looking for them they do seem to pop up on ebay with some regularity.
UK EXCLUSIVE TIGER FORCE (1990)
If you’re a fan of any of the later characters such as Hit’N’Run, Tunnel Rat, or Outback, and are looking for a valuable variant to invest in, you might want to check these out.
ARGENTINA (PLASTIRAMA) FIRST SERIES (1983)
I don’t know if Hasbro was using Argentina as a test market, but the first Plastirama series, not only were 3 Hasbro series 3 (1984) figures (Storm Shadow, Blowtorch, and Ripcord) released before they were released in America, but variations of these figures were released as well (a red and black Storm Shadow – Satan and Ninja-Ku, a blue, yellow and silver Blowtroch – T.N.T., and a tan Rip-Cord – Sorkek).
CONCLUSION
I hope some of this information helps you get started. There are a lot of collectors out there who have been collecting longer than I have and probably know more of the specifics on certain figures and there are plenty of websites and chat rooms were you can learn all about collecting GI Joes. However, it's been my experience that there is not a lot out there to help collectors turn their hobby into an investment or a business, so hopefully this will help get you started. |
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