Collectibles, or things that people gather together into a collection, have been an important part of history for thousands of years. Evidence from archaeology suggests that there were toy collections even in ancient Egypt.

Advertisers love to use the term, collectible, in their advertising. Since many people equate collectible with something that increases in value over time, this practice is quite understandable.

Collecting as a hobby has become extremely popular since the 1970s. With both the increase in affluence and lower manufacturing costs of the age, many more people are now involved than ever before. There are now more societies and books for collectors than in any previous time.

The reality is that people will collect virtually anything, so that makes virtually anything a collectible. Many people collect for interest and enjoyment, while others collect things in the hope that they will appreciate in value. Still others do both. Many begin for fun, then realize one day that the collection they have been building over the years may have some real value.

Anthropologists who study people and civilizations from the distant past are fascinated with the human urge to accumulate things. One of the theories is that it stems from prehistoric times when those who had the most were most likely to thrive. Furthermore, they believe that they collected trophies as a record of special occasions, such as memorable hunts or victories in battle. According to historians, military awards were actually invented as an alternative to more gruesome memorials.

One thing is certain – we human beings like to collect things. How many times do children and adults pick up an unusual stone or feather and keep it? So did our ancestors!

Collectibles today

In more modern times, themed collectibles, such as stamps, coins, art and more recently, cameras have become popular. At the same time, people still collect just about anything you can imagine, including bugs, barbed wire and beads. It really is amazing what some folks will collect.

Today, some people are collecting as a kind of investment. In fact, while many collectibles do appreciate in value over time if they are well cared for, I would not recommend such investments as part of your retirement portfolio! See your investment broker for real investment advice!

Just the same, it can add a little fun and adventure to think of your collection as an investment, rather than a liability. That way I can justify the latest piece I bring home to my wife!

The problem is that many items are being advertised as collectible, even though they have yet to pass any market test. The very term, collectible, is being used as a marketing ploy for things that just might turn out to be worthless junk. What if it turns out to be something no one wants in a couple of years?

Another growing problem is clones, items that really look like the genuine article, especially to the untrained eye, but in reality, cheap copies. Like the man said, “Hey, let's be careful out there.”[1]

This brings up a really important question for many new collectors:

What gives a collectible its value?

The number one thing to consider is its recognized value. Simply put, if enough people consider something to have value, it does. In other words, just because it's valuable to you doesn't mean it's valuable to someone else. In order to be sure that what you are buying has value, you need to know what the group thinks. This is where collector catalogs are really valuable. We often receive calls object older catalogs, and sometimes we have been able to help people complete their collection.

Collectibles that receive more recognition are generally valued higher than those that are not. In the world of toy train collecting, names like Lionel, MTH, American Flyer and Micro-Trains are widely recognized by collectors. Toy soldiers from William Britain have been popular with collectors for years, with pre-twentieth century boxes of nine soldiers have sold for from $2500 to $5000.

Nothing drives prices quite like demand. The higher the demand for a collectible, the higher its value. There is no more graphic example of this than some of the crazy prices we sometimes see for certain collectibles at auction, especially in the art world.

Be careful

While demand can drive the value of an item way up, as those of us who watch auctions have often seen happen, it can also quickly disappear. Then the value of the item plunges. This is not as big of a worry for vintage and antique items that are no longer being manufactured. However, when an item such as a new toy soldier or train is suddenly considered collectible by collectors, increasing the demand and thereby raising the price between collectors and on auctions, the manufacturer also has a tendency to increase production to meet demand.

When a manufacturer over-estimates long term demand and over-produces beyond demand, the value can actually plummet to prices below retail. It pays to keep a cool head! Remember that when demand is the only thing raising the value of an in-production item, it can also quickly disappear if too many hit the market, thus causing a crash in value.

Rare items are always going to have more value than common items. This, again, is where it pays to have an up-to-date fan books, collector's guides or price guides, such as McKewon's Price Guide to Antique and Classic Cameras, Train City Price Guide or a Greenberg's Pocket Guide, for example. Another good place to look now is on eBay. You can do a search for a particular item such as a collectible toy soldier or train, then look down in the left column for Sold listings. This will tell you what collectors are actually willing to pay for a collectible, right now.

Again, be careful. Sometimes, when a manufacturer is still around, or another manufacturer has bought their dies, a re-release is done that can lower the value of an existing collectible. There is no way to be sure how such an event will affect an item's value, but it pays to be aware of the possibility. Again, while many view collectibles as an investment, there are risks attached. If you are serious about investing, go to an investment adviser for direction.

The condition of an item can really affect its value. If something is damaged or heavily worn, it's not usually going to be worth as much as something that is in immaculate condition. When buying any vintage collectible, be careful if it is advertised as being in “mint” or “like new” condition. Make sure it isn't a copy or that it has been unprofessionally repaired. In the case of toy trains, a piece with a bit of damage on it is often worth more than a piece that has been restored, no matter how well the work has been done.

Collectibles that began their lives as high quality items tend to be more valuable than lower quality items. For example, an intricately designed 14 karat gold ring made by a master craftsman will be more valuable years from now than a plain 14 karat gold plated ring from a manufacturer. The better an item is made and the better the materials it is made from, the more valuable it is and the more likely it is to appreciate in value.

Counterfeits

I briefly mentioned reissues and clones – aka, fakes – earlier in this article. Unfortunately, you really have to watch for these. A collectibles authenticity and your ability to prove its authenticity will really affect its value. Apart from reissues by some manufacturers, more and more (and better) counterfeits have hit the market. A huge one that is still catching unsuspecting collectors is Rolex clones. Rather than dropping off, it is even a bigger problem today, with unscrupulous companies using modern technology able to clone them so accurately that even experienced jewelers mistake them for genuine watches.

The same is true for certain antique toys. Cast iron reproductions have become big business for counterfeiters, and there are others. What you must remember is that if an item has high value to collectors, it is likely being cloned even as I write this. Furthermore, remember the age old adage – if it looks too good to be true, it probably is.

[1] Sergeant Phil Esterhaus – Hill Street Blues - http://www.imdb.com/title/tt0081873/quotes?item=qt0474429