Allocation Cut- Behind the Scenes

dasiegel · 05-20-2020, 06:16 PM

I was recently notified that despite spending more each consecutive year that my account with a distributor was cut to a "stock only" account. That means I will be getting zero allocated products; essentially all basketball, Topps, and really anything that matters.

The fact of the matter is that the distributors are selling to the breakers who can pass their costs onto their customers. It essentially guarantees that it will be this way for a while.

An example of this would be if Prizm is $96.50 everyone want it at that price. But there is only so much that GTS or Southern Hobby will be supplied. So the way they decided to sell is based on past spending.

Of course the catch is, if you aren't allowed to buy (allocation) you can't spend. So the distribution companies have "Stock" of stuff that didn't sell or that they rebought for a second wave of sales at a higher price. Maybe GTS sold out of all their $96.50 Prizm and rebought more elsewhere for $155. Now they are selling them again, but this time at $225.

A small brick and mortar store might get allocated 4 boxes based on their spending because they buy a bit of basketball, baseball, soccer, magic, etc. But they aren't spending as much as Dave & Adam's or a box breaker.

So a breaker for example, will buy w/e they can at $96.50, $225, a third wave at $550. It doesn't matter because they just make their spot per break higher. The supply is theirs and clearly there is a demand.

I spoke to a rep who told me that even accounts that spend $45-50k per year are only getting 1-3 boxes of products because there isn't enough to go around and when the business decision is made, the sale is going to the breaker who spends $25k a month. So this is the way it's gonna be for a while.

KhalDrogo · 05-20-2020, 06:38 PM

Money always wins. $25k a month on supply is nothing.

Jopeal · 05-20-2020, 06:47 PM

Even with less allocation, aren't smaller shops able to still have good profit margins through selling less volume at presumably higher markup or is the allocation so low that they're overall sales figures will be be down due to not enough product?

kobemagee29 · 05-20-2020, 06:59 PM

don't care what anyone else says, breakers have ruined this hobby.

Jopeal · 05-20-2020, 07:01 PM

Quote:

Originally Posted by kobemagee29

don't care what anyone else says, breakers have ruined this hobby.

I'm not disagreeing, but why do you say that? Because box prices are really high?

jubei777 · 05-20-2020, 07:41 PM

that's why it's better to get direct accounts if you can. distributors keep playing their games and i can them getting eliminated at some point when the company's realize they can control it all at that point.

yiguiri2002 · 05-20-2020, 07:48 PM

Quote:

Originally Posted by kobemagee29

don't care what anyone else says, breakers have ruined this hobby.

If you are gonna blame someone, blame the people who buys spots at ridiculous prices, not the breakers.

dasiegel · 05-20-2020, 08:02 PM

Quote:

Originally Posted by yiguiri2002

If you are gonna blame someone, blame the people who buys spots at ridiculous prices, not the breakers.

yea i think it's more this. but why people buy these spots and blow this money i'll never get. sucks for the rest of us. oh well.

eliteman0318 · 05-20-2020, 08:08 PM

Well it’s good for the industry that so much new money has entered. This in the long run means more products and hopefully more incentive for companies to compete with panini. The demand will naturally bring in more supply and more choices for consumers. In the short term there it is uncomfortable that prices has risen so sharply and most can’t buy it at msrp.

There isn’t a scarcity of mosiac at the moment. It’s littered across ebay like debris. Anyone can buy 1000 boxes at the moment if they want, just not at the price they want. But if the product wasn’t bought up by all the flipper or hoarded for direct sale by distributors, would everyone still want it so badly..at the original price?

The frustration of wanting something at the original price is irrationally driving people to start buying directly on panini’s site for 680 a box, something that exquisite did not even reach upon release. It’s a crazy price... but hey at least it was the price of the original offering.

kobemagee29 · 05-20-2020, 08:45 PM

Quote:

Originally Posted by Jopeal

I'm not disagreeing, but why do you say that? Because box prices are really high?

Really high is putting it nicely.
It was fun sitting down with my kids after making a stop at the local card shop & picking out a few boxes to open together. Sometimes even cases. Then taking the time to sort it all & make sets to put away for the kids. Been doing that for the last 15 + years. But that is all gone & done. A box of prizm now cost what you could get at least a case for the first 4 years prizm basketball was made. Same can be said with bowman chrome, ect.
Now the majority of the card shops are gone. All the wax is now catered too the all call, chosen ones.
You know its getting very bad when they start getting $5000+ for a product like flawless football that singles don't move for much.

Archangel1775 · 05-20-2020, 09:53 PM

It'll change, as much as people say a company like Topps cant handle the storage and shipping aspect of it, they've already started doing it. With the proliferation of internet exclusive boxes and products like Project 2020 sending out 100,000 cards a month, its only a matter of time before they have everything in place to eliminate distributors altogether. Distributors did it to themselves playing games.

If I decided to open a hobby shop right now, I'm doing it with as many direct accounts as I can. Yes, I realize it's a 6-7 figure investment.

DJP73 · 05-20-2020, 10:35 PM

Quote:

Originally Posted by Archangel1775

It'll change, as much as people say a company like Topps cant handle the storage and shipping aspect of it, they've already started doing it. With the proliferation of internet exclusive boxes and products like Project 2020 sending out 100,000 cards a month, its only a matter of time before they have everything in place to eliminate distributors altogether. Distributors did it to themselves playing games.

If I decided to open a hobby shop right now, I'm doing it with as many direct accounts as I can. Yes, I realize it's a 6-7 figure investment.

Problem with that is you cant get direct accounts anymore, LCS's are having hard time also getting product.

Arianny_Fan · 05-20-2020, 10:54 PM

Breakers and the people who buy into.them are to blame.

The only way to bring MSRP's back to norm would be for everyone not buy any new product, no nothing. But you know that won't happen.

CicadaMound · 05-20-2020, 11:10 PM

Or massive print run inflation

DJP73 · 05-20-2020, 11:12 PM

Some LCS's only get 1 box of Some things in Basketball from Dist.

carl2001 · 05-20-2020, 11:17 PM

Distributors always play their games. They are the necessary evil and group breakers are the new evil

RogerGodahell · 05-21-2020, 12:52 AM

Quote:

Originally Posted by carl2001

Distributors always play their games. They are the necessary evil and group breakers are the new evil

Agreed. There is more than enough product go around the distributors just like holding it for hostage and jacking the prices up. They are basically a cartel. There is no one else to get it from besides them.

Last year before prices went insane you could buy all the product you wanted on ebay or multiple places. Prizm sat and sat and price for a case went down as low as $2000 at one point. There was more than enough to go around. And that wasn't just Prizm it was pretty much everything else besides NT.

Just before and once this season started prices went crazy and the cartel tightened their grip on all product. You can't get it from anyone but them so you either pay their exorbitant prices or you get nothing. Of course LCS want it at the cheap prices they were used to but the cartel wont let it go for that when they can sell it for 5-10x that price.

I mentioned this in another thread about "what it will take to burst the bubble?" This is all lining up to be the thing that does just that.

People can't get any product so Panini may get the idea to print more, lots more. Why wouldn't they right? They sell out of it as fast as they can make it. Sounds good, more money for everyone. The problem is if that happens it could bring us to the junk wax era 2.0. The market would be so saturated that everything starts dropping in price like a rock. Nothing becomes coveted or desirable anymore because it's cheap and easy to get.

Again I don't really think everything is gone it's mostly false scarcity. You can't get any product at Walmart or Target because it's all being hoarded. But if you look on eBay you can find 150 pages of peoples little stashes of Prizm and Optic blasters. What happens once Panini increases the print run x5 or 10?

tier1dc · 05-21-2020, 01:05 AM

Good thread.

Problem with vilifying breakers is that hobby shops are just as bad when it comes jacking up prices. They want the product at the cheapest price because that's how it used to be so they get the benefit of all future price increases.

people clear out big box stores for the easy flip but also because it's usually cheaper to buy everything on the shelf than getting 1 Hobby box. Only avenue available to a lot of customers.

Breakers are squeezing the market but the real bastards are the distributors. They're just doing what the small guys on eBay do but for the entire market.

ksp6687 · 05-21-2020, 01:54 AM

Quote:

Originally Posted by KhalDrogo

Money always wins. $25k a month on supply is nothing.

Yea, I've been spending 25k+ a month for the last 6 months and can't even get a distributor to take my calls or answer an email.

Product is only being allocated to people in bed with the distributors and Panini. The same 7-10 breakers who get their stories re-posted by Panini every day.

Pierce09 · 05-21-2020, 01:57 AM

I have a hard time understanding the hate breakers are taking on here. They provide a service. People pay (gamble) on it. I collect Spurs cards. I can walk into my LCS and buy a $400 box and hope for Spurs or something nice I can sell or trade for Spurs cards. Or I can can take the $400 and buy into 2-3 CASE breaks and get all the Spurs cards on them.

I’ve come around to buying singles as the gambler in me is long gone, but if I had $400 to spend on a 2-3 cases of a spurs card break or one box, I’m taking the breaker. And it’s not close.

Sent from my iPhone using Tapatalk

Pierce09 · 05-21-2020, 01:59 AM

As a side note LCS’s need to get better at breaking. How mine struggles to do so is beyond me.

Sent from my iPhone using Tapatalk

brothertona · 05-21-2020, 12:03 PM

Breakers aren't the enemies here, I feel like this debate is similar to the players/owners debate on the MLB side. We've basically sided with massive corporations and billionaires over everyone else all over again.

Distributors are the ones allocating product - choosing winners and losers and pricing the product out - most card shops after that are selling that product to breakers as a lot of them would rather get the guaranteed money then wait for someone to buy that product.

The card shops that keep product are obviously selling it at the going rate because why sell something at a price it can't be replaced at? If they are selling Prizm at $150 a box, then they are going to lose their shirt when they try and buy more and its $300 to $450 a box. They'd basically have to change their price every time a case sold on Blowout or Dealernet got a boner.

Until distributors are corralled and controlled product won't get any cheaper. They have all of the power and they are exerting that power.

carl2001 · 05-21-2020, 12:29 PM

Why are distributors acting like a cartel? It seems to be Topps and Panini cater to the distributors/group breakers and not the end collectors.

Spacemanspif · 05-21-2020, 12:38 PM

Quote:

Originally Posted by carl2001

Why are distributors acting like a cartel? It seems to be Topps and Panini cater to the distributors/group breakers and not the end collectors.

technically the group breakers cater to the "end collectors" too, their customers are receiving singles same as you or me, just at really high prices. They basically act like an LCS, just much more efficiently (can sell at much higher volumes and prices). The issue is still the distributors, because they are the ones jacking up the prices to the LCS or breakers, who then just pass the price increase on to the customers (after their 10-20% markup of course)

RogerGodahell · 05-21-2020, 12:38 PM

Because they dont really care about LCS. It's easier and more profitable for them to sell to breakers because they'll pay more. It's capitalism. Generally there's nothing wrong with capitalism. But in this case the cartel is pretty much a monopoly. There's only a couple distributors and they literally hold all the cards. That's why there are laws made that break up monopolies. In this case they have free reign to do as they please.

05-20-2020, 06:16 PM	#1
dasiegel Member Join Date: Oct 2012 Posts: 27,556	Allocation Cut- Behind the Scenes I was recently notified that despite spending more each consecutive year that my account with a distributor was cut to a "stock only" account. That means I will be getting zero allocated products; essentially all basketball, Topps, and really anything that matters. The fact of the matter is that the distributors are selling to the breakers who can pass their costs onto their customers. It essentially guarantees that it will be this way for a while. An example of this would be if Prizm is $96.50 everyone want it at that price. But there is only so much that GTS or Southern Hobby will be supplied. So the way they decided to sell is based on past spending. Of course the catch is, if you aren't allowed to buy (allocation) you can't spend. So the distribution companies have "Stock" of stuff that didn't sell or that they rebought for a second wave of sales at a higher price. Maybe GTS sold out of all their $96.50 Prizm and rebought more elsewhere for $155. Now they are selling them again, but this time at $225. A small brick and mortar store might get allocated 4 boxes based on their spending because they buy a bit of basketball, baseball, soccer, magic, etc. But they aren't spending as much as Dave & Adam's or a box breaker. So a breaker for example, will buy w/e they can at $96.50, $225, a third wave at $550. It doesn't matter because they just make their spot per break higher. The supply is theirs and clearly there is a demand. I spoke to a rep who told me that even accounts that spend $45-50k per year are only getting 1-3 boxes of products because there isn't enough to go around and when the business decision is made, the sale is going to the breaker who spends $25k a month. So this is the way it's gonna be for a while. __________________ Board man. Board man gets paid.

05-20-2020, 06:38 PM	#2
KhalDrogo Member Join Date: Aug 2017 Posts: 41,265	Money always wins. $25k a month on supply is nothing. __________________ I love PSA!

05-20-2020, 09:53 PM	#11
Archangel1775 Member Join Date: Mar 2012 Location: Cali baby! Posts: 21,864	It'll change, as much as people say a company like Topps cant handle the storage and shipping aspect of it, they've already started doing it. With the proliferation of internet exclusive boxes and products like Project 2020 sending out 100,000 cards a month, its only a matter of time before they have everything in place to eliminate distributors altogether. Distributors did it to themselves playing games. If I decided to open a hobby shop right now, I'm doing it with as many direct accounts as I can. Yes, I realize it's a 6-7 figure investment. __________________ *There are the intangibles that set someone apart from the pack.So the blur isn't your inability to see his greatness, it's merely the inability to measure it.* Last edited by Archangel1775; 05-20-2020 at 09:56 PM.

05-20-2020, 10:54 PM	#13
Arianny_Fan Member Join Date: Oct 2010 Location: On a rock in the middle of the sea. Posts: 3,576 basketballfiend	Breakers and the people who buy into.them are to blame. The only way to bring MSRP's back to norm would be for everyone not buy any new product, no nothing. But you know that won't happen. __________________ IG: @basketballfiendcards @ariannycelestecards Flickr: https://www.flickr.com/photos/139631202@N06/albums

05-20-2020, 11:17 PM	#16
carl2001 Member Join Date: Sep 2007 Location: California Posts: 3,335 cardcollectorcarl	Distributors always play their games. They are the necessary evil and group breakers are the new evil __________________ I collect BASKETBALL cards and old sealed boxes.

05-20-2020, 06:47 PM	#3
Jopeal Member Join Date: Jun 2013 Location: RI Posts: 8,153 dr.jopeal	Even with less allocation, aren't smaller shops able to still have good profit margins through selling less volume at presumably higher markup or is the allocation so low that they're overall sales figures will be be down due to not enough product?

05-20-2020, 06:59 PM	#4
kobemagee29 Member Join Date: Jul 2007 Location: rockford Posts: 4,088	don't care what anyone else says, breakers have ruined this hobby.

05-20-2020, 07:41 PM	#6
jubei777 Member Join Date: Jul 2008 Posts: 4,430 jubei777	that's why it's better to get direct accounts if you can. distributors keep playing their games and i can them getting eliminated at some point when the company's realize they can control it all at that point.

05-20-2020, 08:08 PM	#9
eliteman0318 Member Join Date: Jun 2012 Posts: 459	Well it’s good for the industry that so much new money has entered. This in the long run means more products and hopefully more incentive for companies to compete with panini. The demand will naturally bring in more supply and more choices for consumers. In the short term there it is uncomfortable that prices has risen so sharply and most can’t buy it at msrp. There isn’t a scarcity of mosiac at the moment. It’s littered across ebay like debris. Anyone can buy 1000 boxes at the moment if they want, just not at the price they want. But if the product wasn’t bought up by all the flipper or hoarded for direct sale by distributors, would everyone still want it so badly..at the original price? The frustration of wanting something at the original price is irrationally driving people to start buying directly on panini’s site for 680 a box, something that exquisite did not even reach upon release. It’s a crazy price... but hey at least it was the price of the original offering.

05-20-2020, 11:10 PM	#14
CicadaMound Member Join Date: Jul 2019 Location: Ohio Posts: 568 CicadaMound	Or massive print run inflation

05-20-2020, 11:12 PM	#15
DJP73 Member Join Date: Jan 2009 Location: Woodbridge Va Posts: 2,799 djp73	Some LCS's only get 1 box of Some things in Basketball from Dist.

05-21-2020, 01:05 AM	#18
tier1dc Member Join Date: Aug 2015 Posts: 5,541	Good thread. Problem with vilifying breakers is that hobby shops are just as bad when it comes jacking up prices. They want the product at the cheapest price because that's how it used to be so they get the benefit of all future price increases. people clear out big box stores for the easy flip but also because it's usually cheaper to buy everything on the shelf than getting 1 Hobby box. Only avenue available to a lot of customers. Breakers are squeezing the market but the real bastards are the distributors. They're just doing what the small guys on eBay do but for the entire market.

05-21-2020, 01:57 AM	#20
Pierce09 Member Join Date: May 2012 Location: Texas Posts: 1,274 awp_iv	I have a hard time understanding the hate breakers are taking on here. They provide a service. People pay (gamble) on it. I collect Spurs cards. I can walk into my LCS and buy a $400 box and hope for Spurs or something nice I can sell or trade for Spurs cards. Or I can can take the $400 and buy into 2-3 CASE breaks and get all the Spurs cards on them. I’ve come around to buying singles as the gambler in me is long gone, but if I had $400 to spend on a 2-3 cases of a spurs card break or one box, I’m taking the breaker. And it’s not close. Sent from my iPhone using Tapatalk __________________ Spurs Collector: Looking for Auto of every Spurs player in Spurs Jersey Also Collect Spurs Finals Preferred Patches /25 IG: spurs_cards_

05-21-2020, 01:59 AM	#21
Pierce09 Member Join Date: May 2012 Location: Texas Posts: 1,274 awp_iv	As a side note LCS’s need to get better at breaking. How mine struggles to do so is beyond me. Sent from my iPhone using Tapatalk __________________ Spurs Collector: Looking for Auto of every Spurs player in Spurs Jersey Also Collect Spurs Finals Preferred Patches /25 IG: spurs_cards_

05-21-2020, 12:03 PM	#22
brothertona Member Join Date: Jul 2019 Location: Atlanta, GA Posts: 6,965 brothertona1	Breakers aren't the enemies here, I feel like this debate is similar to the players/owners debate on the MLB side. We've basically sided with massive corporations and billionaires over everyone else all over again. Distributors are the ones allocating product - choosing winners and losers and pricing the product out - most card shops after that are selling that product to breakers as a lot of them would rather get the guaranteed money then wait for someone to buy that product. The card shops that keep product are obviously selling it at the going rate because why sell something at a price it can't be replaced at? If they are selling Prizm at $150 a box, then they are going to lose their shirt when they try and buy more and its $300 to $450 a box. They'd basically have to change their price every time a case sold on Blowout or Dealernet got a boner. Until distributors are corralled and controlled product won't get any cheaper. They have all of the power and they are exerting that power.

05-21-2020, 12:29 PM	#23
carl2001 Member Join Date: Sep 2007 Location: California Posts: 3,335 cardcollectorcarl	Why are distributors acting like a cartel? It seems to be Topps and Panini cater to the distributors/group breakers and not the end collectors. __________________ I collect BASKETBALL cards and old sealed boxes.

05-21-2020, 12:38 PM	#25
RogerGodahell Banned Join Date: Jun 2015 Location: Cardboard Enthusiast Posts: 20,783 RogerGodahell	Because they dont really care about LCS. It's easier and more profitable for them to sell to breakers because they'll pay more. It's capitalism. Generally there's nothing wrong with capitalism. But in this case the cartel is pretty much a monopoly. There's only a couple distributors and they literally hold all the cards. That's why there are laws made that break up monopolies. In this case they have free reign to do as they please.