The News from ElephantToenails.com

Part One: WE are the Demand!

I wrote this article several months ago, however, haven’t felt it was “time” to run it- Well now I do. My prompting was a email I received yesterday from a collector asking me about a toenail he was being priced to buy. This collector indicated he was offered this toenail and thought the price was too high and wanted to know my 2 cents. Well, it fired me up!

This collector was being offered a jumbo for about 25- 30% more than any toenail of that style has sold for (and we track them closely) and this equates to a bunch of money considering what really good Jumbos are selling for. I told my fellow collector in no uncertain terms- “No, the knife wasn’t worth that price if you want to use recent sales as the basis.” I know there are times we use other factors to help us individually determine the worth of a knife, however, if you just look at “comps” then we have a very good indicator as to what other collectors recently paid. Then there is the “What is it worth to me right now?” question.

We know the number of Toenail collectors is continuing to grow each year. Toenails enjoy a very high degree collectibility and popularity. From all indications I can see (from visits to my website, conversations with dealers and collectors, bidders on online auctions, etc) it will continue in popularity.

One of the benefits resulting from this popularity is a large enough group make up toenail collectors that enable us to make some things happen. It wasn’t too long ago, a dealer might have for sale a “once in a lifetime” offering of a Jumbo Swellcenter (or any other toenail, for that matter) and would stick a really big price on it. Then the collector (buyer) not knowing how long it would be, if ever, he would find another one like that bought it. The price was typically secondary in the decision and was pretty much dictated by the dealer.

You are familiar with the old economic principle of Supply and Demand. Well, WE are the demand.

I am convinced the supply is there and now we have the opportunity to drive our own market, instead of being a victim to the prices/values of the dealers and price guides. In the past we were told what values were, what brands have the highest value and which ones are the least popular, etc. In the past we have been told… “well this toenail is priced at X because of Y,” which may not reflect what we as collectors judge is important.

In the end it is the Buyers who determine value and the factors that are important in knives that are purchased…not sellers (I confront this issue of how value is determined almost every day in my “real job” of meeting with real estate owners who think just because they spent X on their “premier property” then it should be worth that, well…the harsh reality is if no one buys the property (after a reasonable period of time) the conclusion is it simply isn’t worth X. Period end of story).

My goal is not to start a rebellion, but here is a real fact: In most cases toenail prices are being set by “Price Guides (mine notwithstanding),” instead of the price buyers are actually paying for these knives. It is not uncommon for the writer to take a few sales to help them in their assessment of what has happened to values, but just due to the sheer number of patterns produced it is impossible to make it much of a science.

Moreover, many insiders attempt to “drive the market.” Just because 88’s (what ever the heck that is) went up X% doesn’t mean toenails experienced the same value change (it could have been more or less). I am well aware of “record prices” periodically paid for toenails and I do my best to keep my ear to the ground in an attempt to see where values are going and what is happening as it relates to toenails. Yes, I know of a few record sales for extremely rare toenails , but those sales are also the exceptions rather than the rule, and furthermore, don’t necessarily “set” the price for the rest of the approx. 100 other brands or 300 different variations of older toenails that are out there.

Bottomline: WE are the demand and we decide what a particular toenail is worth.

Part Two in this series on “What determines Price?” will be posted this week entitled “Is there a difference between Price and Value?”

This entry was posted on Sunday, April 27th, 2008 at 7:35 am and is filed under Speaking My Mind. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.