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Friday, May, 10, 2024

Unpacking the Repack Phenomenon

Being a part of this hobby has ultimately gotten more expensive, regardless of how the market has performed the last few years. Despite a regression in the mid double digits since the heights of 2021 and 2022, everything has held well above where we started with the pandemic era. I love to see the way the hobby has adjusted to this new normal, as it has become one of the most interesting narratives of this boom period. Every day, something is done a new way, a new idea is brought into play and becomes an inflection point, and business models change regularly because of new mindsets.

One thing remains the same, unfortunately – the cost of wax is way too fucking high.

Back when the boom started, the main choke point was access to wax. Demand was so high, supply could not come even close to keeping up, leaving wax prices to the wolves and creating an speculation bubble with every single product to be released. It was so nuts, that we saw people fighting with Walmart and Target employees over the blasters and rack packs they were trying to stock.

Things have settled down in terms of demand at this point, but the prices have stayed at the levels where artificial scarcity can still create a mad rush for the products that still drive the top valued cards in the hobby. Products like Topps Chrome, Prizm, Bowman, National Treasures, and Flawless have seen how this steady demand can impact the way collectors engage with the products, fostering mass bitterness and resentment over the way things have changed.

In this situation, many collectors understand that a rising tide floats all boats, but they dont care. They dont care because the higher the cost, the higher the risk. With higher risk comes more devastating losses, and that means a hobby that was once fun, isnt anymore. Although there have been some improvements to the checklists, and card technology as a result of the higher prices and high demand for top value wax, the main concepts are unchanged. Which means that many collectors are forced to pay higher prices for the same exact stuff they would have gotten years before the boom.

This challenging engagement model has required the supporting peripheral businesses of the industry side of things to get creative. Things like Group Breaking have become such a widely accepted part of the hobby experience that the card companies are building their own live break platforms to support it. Other ideas that look to offload risk by spreading the cost of participation amongst a group of people have been somewhat successful too.

Funny enough – the one thing that hasnt changed is the wax. Its still opening packs. Its still box breaks. Its still risk, even if the cost is spread through more bodies. So, then, what does one do when the wax is still the bottle neck in the whole thing? Well, you make your own.

Here is where the conversation gets interesting, because there is more history in this part of the hobby than people probably realize. First, lets talk about the process, because that’s really important. To create your own product, you need packaging, you need distribution and retail, and you need cards. Most people dont have the means to create their own cards, but there is a never ending supply of cards to use for that part of the process. That’s where this phenomenon takes hold, as repacking the cards available into new products has become the new hot thing in this world.

Looking at the history of repacks, its something that has been around much longer than many collectors likely expect. Companies like Leaf have done repack products as far back as I can remember them being a company. Other shops and dealers have done it as well, somewhat of a side hustle to supplement business coming into their hands. However, those really arent the products that are drawing the ire of the hobby, mainly because they didnt have the platform to deliver it the way that some of the big breaking channels on Whatnot and Fanatics live are doing now.

To start, there are some good things that come out of these products, although they are not my favorite approach to a fix of the many issues we face. Creating a tertiary market for cards outside of the normal sales channel is a good thing for the people who actually do rip the wax at the end user level. For a long time, many people have needed to benefit from the creation of a product. All levels needed to make money – manufacturer, distributor, dealer and collector. Giving another outlet for the end user to make money beyond traditional methods is a good thing. Selling to repackers has become a thing, especially at shows, which means that collectors arent the only beneficiaries from a new large scale buying scheme.

Additionally, repacks are a way to create products that span multiple years, multiple sports and multiple media types. For collectors that just like having fun with cool looking cards, these repacks can offer a lot of cool opportunities to get top cards from products that are generally unavailable at their level.

Lastly, repacks can give a boost to shops who may be struggling to compete at a level where allocation of sealed current product is a battlefield. We just got done hearing how Fanatics will be approaching their relationships with shops and dealers, and its not something that tells me the access to higher amounts of sealed cases will be plentiful in the future.

You might be reading this, and thinking, “well, those good things arent all that important to me, especially considering the negatives.” To which I say that I absolutely agree. The idea of putting your own product together isnt really the negative. Its the conflicts of interest that exist in these situations where so many people have called out issues, or even more importantly the regulation of the distribution channels they are using to sell them.

Lets go back to the list of doing your own product – cards, distribution and packaging. Packaging is the easiest, because of how many businesses exist to package goods for retail distribution. I’m going to skip over that for now. The part of packaging I want to discuss is the actual construction of the products themselves. Really, it comes down to a single word that will be a common thread through this whole scheme, and that word is “trust.” Most of the people who are selling these repacks fall under the umbrella of a breaking channel on a live breaking platform. Most of these people run barely incorporated business models, and I dont even want to think about how many have actually set up their operation correctly in the eyes of the law. I posted a few weeks ago about the 24/7 card casino, and that makes this whole market segment fall into a very different area of our society.

It comes down to one question – do you trust these breakers to give you what they promise, considering how much money you are giving them to provide it?

For a lot of people (and I mean A LOT), the answer seems to be yes. They will fork over thousands and thousands of dollars to each of these parties, despite a history of issues with scams, a history of issues with shipping, and a history of issues with customer service. Remember, Backyard Breaks is probably one of the biggest channels out there, but they also have some of the most heinous accusations and video evidence of wrong doing out there. More importantly, the platform they are using doesnt seem to have any control over their streams. If there are conflicts, there is no official 1-800 number you can call, and the process is definitely handled on a case by case basis. That’s fucking scary.

Going further into the trust arena, most of the bigger channels break 24/7 on multiple streams, so there is no way to track what is actually coming out of a product. Unlike an official release, where we have checklists to understand what a product contains, odds that showcase how frequently a card can be pulled, and serial numbers to track specific cards out of the product – NONE of this really exists at the repacker level. Whatnot requires the repackers to tell what the ceiling and the floor is for their packs, but the enforcement of that is seemingly much less than transparent.

I equivocate this to handing a bookie some money to place a bet on a game, and then trusting he is going to tell you the result of what happened with that bet. Its hard for me to make that leap, but for others, it might not be. That’s where this whole thing has come into focus as an area where many collectors have started sounding alarms.

Breakers run a business, which means they need to have an eye on margins and profit to ensure they can cover their overhead of fees, personnel and the actual products themselves. To think they arent trying to maximize that as much as possible is naive, which leads to the conflicts of interest that are mentioned above. Because there is no regulation, we have to trust that they arent fleecing their customers to enhance profits and margins by cutting corners. Even more importantly, we cant trust the gamblers who buy them, because many dont seem to track anything. They just put money down and expect returns.

Over the last six to twelve months, the profitability of this format has become exceptionally higher than many of the wax products the cards come from. It allows a renewable source of cards to be bought at shows, from breaks done on the channel, and eBay. Ive even heard of repackers going to local card shows, and cleaning out entire tables of desirable cards at high values because they know how much profit can be obtained with the proper platform and format.

I even believe that as Fanatics takes control in 2026, there will be a growing hunger to pick up cards that come from previous eras, as many shops will be put into spots they have never been in before, especially those who put many of their eggs in the Panini basket over the previous ten years. Fanatics is looking to standardize their presentation across the hobby, and given that they have such a large distribution as it is through Topps and their retail stores, plus a breaking platform, and now Fanatics branded shows, its only a matter of time where necessity among existing parties will need to play catalyst for innovation.

Im so sure this is going to happen, that Im willing to bet there are things going on now that I cant even fathom becoming a staple of the future era of Fanatics control. Repacks are the most recent fad, but one that has staying power because of all the things I mentioned above. As the hobby migrates out of a competitive manufacturer licensing situation and into a exclusive manufacturer situation, Im not as curious as to what will change, more focused on how much the primary marketplace will continue to adapt.

Right now on Whatnot and Fanatics live, the seeds have already been planted in their Casino formats, and only a select few are already on the bleeding edge enough to see a path forward where their business will be in 2 years. That’s a lifetime from now, and also an insecure feeling considering most of us have been around for a lot longer than that.

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