A discussion in the General Forum about the decline in HL dealer numbers turned (surprise surprise) to a discussion about GLOWS and edition sizes and the secondary market. So as not to freighten the newbies, I'll hide my own ramblings on this topic here in the FSB.

Prospects for the continued success of a Collectible are reflected in the health of its secondary market.

I presume Y&A correctly recognized their line of Collectibles would not be successful indefinitely. There are very very few lines of 'manufactured rarities' that last more than a decade. I presume also that several years ago they plotted out a strategy they hoped would: a) string out the lifespan of the LE line, and b) allow their business to continue in some form when popularity of the LE line peaked. Thus, in 1995 they started making numbered Open Editions.

One has to wonder where the LE marketplace would be today if Y&A had: a) never made Glows; and b) never raised the edition size past 5500. I will conjecture that they would have an extremely hardy and loyal group of core collectors and most models would be gone from dealer's shelves within 2 years. There would a very strong secondary market. BUT - would Y&A have made as much money with that business model as they have with the one they did adopt? Probably not.

Imo, GLOWs turned the belief that the LE line of Collectibles couldn't run forever into a self fulfilling prophecy. GLOWS dealt a fatal blow to the Collectible LE. And that was the 10k Edition Size on the grassy knoll.

I conjecture the HL secondary market peaked about the time of the first Reunion, or a little while after, and has been in decline ever since. At first the decline was almost imperceptible as market values changed from ascending to a leveling off period. After staying flat for a short while, values have been on the downswing for about a year and a half.

I cannot imagine a scenario that I can believe Y&A would adopt which would cause the market to return to what it was in May of '97 when folks were selling NPL futures on the AOL board. They will not stop making GLOWs, and it will take a while for them to realize they will need to reduce the edition size again from the 6.5k and 8k ranges down to something smaller.

The reduction in size we're seeing this year, I believe is not in response to Collector demand, but simply a business decision based on poor return on investment for the 10k edition sizes. And, as witnessed by the early retirements, an admission that they simply can't sell that many LEs.

So, yes, of course the market has peaked. The sun has set on the Golden Age of Harbour Lights LE Collectibles. And sadly, its not likely to ever come back. That's actually kinda old news. There are far fewer new collectors coming into the hobby with the desire to collect the key early pieces, and even fewer new wackos (in the original sense of that term) who want to collect them all. Don't underestimate the number of folks who were drawn in - to a greater extent than they would have been otherwise - by observing the upward climb of prices. With no history of market cycles behind it, the decline in HL values is not perceived as a strong reason to collect more, in the way the rising market was.

Not only as Miker suggests is the market saturated with Harbour Lights models, but with the addition of the TLLOM series, the HL line-up itself is saturated. Sure there will always be a few people who buy whatever HL makes. But the total number of dollars available for lighthouse model purchases is not largely increasing. Each dollar spent on one series is a dollar not spent on another. The more Minis and GLOWS sold, the fewer LEs.

From the Fog Signal Building,
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/im

[This message has been edited by JTimothyA (edited 01-06-2000).]