In the hype economy of collectible sneakers, trading cards, toys, and fashion, few know how to create buzz quite like Josh Luber. Josh cofounded StockX, the first sneaker resale marketplace valued at over a billion dollars. Now, he’s channeling his expertise into a new venture, Ghostwrite, a toy company that reverse engineers the perfect collectible.
Josh believes the collectible toy industry is ripe for innovation. “It’s big enough to matter, it’s big enough to work with all the most important brands and artists and companies, but it’s not so big that it has the monoliths that are in the space.”
Turning the collectible toy industry on its head, Ghostwrite doesn’t create toys around existing intellectual property. Instead, it created a blank canvas collectible in a specific shape and silhouette that looks like a person wearing a crown. A brand or company can then customize this “ghost” blank by printing over it with their intellectual property. The blank is ready to license for collaborations with other brands or artists.
Here are some of the principles of the hype economy Josh is embracing with Ghostwrite.
Letting the market set the price
Josh says other companies that focus on collectibles have often failed to capitalize on the demand. Ghostwrite attempts to address that issue with market-based pricing, rather than adhering to a fixed pricing model. “The reason that we are using what we call market-based pricing is so that you don’t have to forecast demand,” Josh says.
Ghostwrite sells its products via a blind Dutch auction. A blind Dutch auction, also called a uniform price auction, is a price discovery process in which the auctioneer starts with the highest asking price and lowers it until it reaches a price level where the bids received will cover the entire offer quantity. So, for example, if there are 20 ghosts available, the top 20 bidders will win the auction, but every winner will pay the same lowest winning bid. Josh says Dutch auctions are only one way of implementing variable pricing, and business owners who aren’t selling collectibles can experiment with discounts and other ways to adjust pricing based on demand.
Embracing transparency and standardization
Josh knew that investing in market-based pricing would mean Ghostwrite needed a business model that was steeped in transparency. Using the serial (or crash number) system of baseball trading cards, Ghostwrite numbers the foot of each collectible ghost, allowing collectors to assess its rarity.
This type of transparency helps people decide how much they should pay for a new ghost, and also is an indication of its market value, should a collector decide to resell it. “There’s so much transparency, there’s so much standardization around these products to give people the confidence that they will have long-term value,” Josh says.
Crafting a brand with cultural resonance
Another element of long-term value is creating products connected to culture. Ghostwrite leverages collaborations with major brands and artists in a bid for cultural resonance. Some of its partnerships include the WNBA, Eastside Golf, and Rocky’s Matcha. “This is what drives demand, is [products at] the intersection of culture and commerce,” Josh says.
Making a collectible now
One of the most important parts of the hype economy is standardization. “Grading is what transformed trading cards from consumer goods into financial assets,” Josh says. Certain companies emerged to grade the quality of collectibles, so customers could agree on the value and authenticity of a collectible.
Ghostwrite partnered with a toy grading company to get ghosts into a similar system. The company also designed packaging for long-term collecting. “We made the packaging very specific around that idea so that people could display it and still enjoy it, but not have to take it out of the original packaging and reduce its seal,” Josh says. Some of the most valuable collectibles today are still unopened in their original packaging.
To learn more about the decisions Ghostwrite made to create a modern-day collectible, listen to the full interview on Shopify Masters.
