eBay Vault

Is The eBay Vault Program Off to a Slow Start?

We learned today from a Tweet that eBay lowered the minimum value requirement for trading cards users can send to the newly launched eBay Vault to $350 now.

In addition to the tweet, eBay adjusted the requirement on its official eBay Vault page as well.

For those that missed the original announcement in June, the threshold started at $750. This is a significant adjustment as it makes more trading cards eligible for inclusion in the eBay Vault program less than two months after launching the program.

So, what is going on here?

Is this just a way to slowly get this program off the ground, or are there more crickets in the eBay Vault than high-value trading cards?

eBay didn’t release an official announcement about this change, just a Tweet, which is a strange way to “promote” that more cards have become eligible. Why?

Vaults Are Everywhere

The vault concept is not as revolutionary or innovative as eBay presented it to be at launch. That may be creating some challenges for the company as it tries to scale the program among a growing list of competitors in this space.

PWCC claims it was the first company in the trading cards industry to launch a vault program in 2020, and now even uses the slogan “The Original Trading Card Vault®” to promote its vault.

The company used to sell on eBay but was booted by the marketplace for allegedly violating eBay’s shill bidding policy. Since then, it has launched its own marketplace for trading cards which is integrated into its vault program.

PWCC has no minimum threshold per se but will charge a fee on items in the vault with a value under $250 unless purchased on the platform. Recently, it claimed to have over $1 billion in assets in its vault.

Alt, a new upstart alternative assets marketplace, also promotes a secure vault for storing trading cards and even allows users to borrow funds against their stored assets. Like eBay, Alt may be looking to take its vault beyond trading cards as its marketplace is broader than PWCC.

Additionally, Alt’s website offers to help users transfer rare or bulk assets to its vault by helping to arrange for armed transport or private jet suggesting it’s focusing on upscale customers. But despite the “high-end appearance” of Alt’s vault program, there doesn’t appear to be a minimum value requirement.

Collectors might be the biggest fish in the “niche” collectibles industry to enter the vault business.

The company owns PSA, one of the most trusted trading card, ticket, and original photograph authentication services in the world which is a widely accepted standard in the industry.

It also operates the Goldin trading cards online marketplace, which the company is integrating into its vault program later this year.

Collectors also owns two other properties of note in the collectible industry; coin and banknote authentication service PCGS and video game grading service WATA.

It’s probably a safe bet to assume that Collectors plans to bring all of its corporate assets together to scale its vault program.

While eBay didn’t invent the vault concept, the sheer size of the marketplace certainly means they should have a significant share of trading card collectors and investors wanting to store items in its vault.

It’s a brand name that people know and trust supported by a long track record of being a profitable enterprise. In other words, it’s not going away and it’s not reliant on VC capital to fund its operation or acquisition of business entities to build its marketplace business.

Yet, unlike its competitors today, eBay decided to launch its vault program requiring a minimum value of $750, placing the program at the high end. Did management think that its brand equity could support an entry at a higher valuation threshold?

Even with dropping it to $350 now, the new lower value threshold is still far above the other trading card vaults mentioned.

When eBay launched its vault, there was no mention of a gradual decrease in the value threshold.

In some ways, initially controlling the flow of cards to its vault by limiting the program to higher value cards would make sense as it would allow eBay to iron out any kinks in the operations.

Many may recall the delays its Sneaker Authenticity program endured at launch and it’s possible eBay was trying to avoid such a launch disaster again.

Still, when companies announce new features or services, they often lay out a short-term plan of how the program will evolve.

eBay did do this for its vault announcement saying it plans to make more collectibles and luxury products eligible in 2023. But, there was no hint of expanding the eligibility of trading cards over the next few months by lowering the valuation threshold. None, Zip, Zilch!

Is the eBay Vault Failing To Attract User Interest?

The “mystery” around eBay somewhat quietly lowering the threshold even involves the company’s latest earnings call.

During eBay CEO Jamie Iannone’s prepared remarks, he said, “[t]he vault is initially accepting graded authenticated trading cards above $500.”

Well, that is not exactly correct now, is it? We know the program started out at $750, which is supported by the original press release.

With Iannone’s earnings call statement, we now know that eBay apparently had lowered the threshold to $500 earlier and with today’s Tweet we know it is now $350.

Furthermore, in the earnings call, Iannone was asked how customers have reacted to the new vault program. He claimed that early customer feedback had been positive (did we expect anything else), but later said something interesting about the vault’s progress, “we’re kind of right on track with where we thought.”

The phrase “kind of right on track” doesn’t sound like the program is setting the world on fire.

All of this seems a bit strange and seems to hint that eBay management believed they could hold a higher value standard for its vault product, banking on its brand equity to attract higher-priced items.

But with two value threshold downgrades in less than two months to enlarge the pool of eligible cards, it doesn’t sound too promising at the moment.

It is too early to call the eBay vault a failure, that would be unfair. But it does appear the program may be off to a slower start than expected, while the competition in the space is growing.

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