PORTLAND, Ore. — EBay’s difficulty turned out to be Paul Biddle’s opportunity.
He’d been a game officer in a slew of national parks and a beer taster for Coors, but three years ago Biddle, 48, decided he wanted to start his own business.
He figured the burgeoning online market for antiques and collectibles offered a long-shot opportunity, so he shelled out $525 for 100 classic Hot Wheels cars and promptly tripled his money by auctioning the toys on eBay, including one that sold for $400.
“When I got $400 for a car, it made me want to find out more,” Biddle said.
What Biddle found out about the tiny race cars revealed promise and problems. In the past 10 years, classic Hot Wheels toy cars had increased in value an average 12 percent a year. In 1999, an East Coast collector paid $72,000 for one of the rarest, a hot pink Volkswagen bus with a bright yellow surfboard hanging out the back.
But as eBay’s online auctions multiplied, so did fraudulent transactions — repainted cars when only mint condition holds value, sellers who took the cash without delivering the Hot Wheels, and buyers who won the auction but never completed the sale.
Kevin Pursglove, an eBay spokesman, said buyers report problems with fewer than 1 percent of the auction giant’s transactions. An even smaller fraction of those problems involve actual fraud, he said.
But in most cases, buyers are expected to spend as long as 30 days trying to resolve the problem on their own before filing a fraud alert or protection claim with eBay.
Biddle saw a chance to build a better Hot Wheels marketplace emphasizing a rapid real-time response to concerns about fraud. In December 2000, without a business plan and with only ideas on what he’d like to see in Web site devoted to the hobby, he spent $5,000 to launch The Toy Peddler.com (www.thetoypeddler.com).
“I decided that I liked toys a lot,” he said. “Marbles were my first collectible. I realized if somebody can do this with marbles, you can do it with a lot of stuff. You have to specialize and find your own niche. It was partly the money thing, but I really like the toys.”
Now he spends 14-hour days in his home office in rural Josephine County that features a laptop computer for answering e-mail and registering new members, three dozen shelves piled with his own Hot Wheels inventory and an assortment of mailing supplies for the dozen toy cars he ships each day.
To discourage fraud, he charges a $5 annual membership fee. To encourage listings, he allows sellers to name their price and, for his services, charges $1 plus 1 percent of the listed price to a maximum $10. (Biddle earns $1.25 from a $25 sale.)
From 500 page views on its first day of operation, The Toy Peddler.com has mushroomed to an average 40,000 page views per day. Sales have soared as well, growing from about $200,000 in 2001 to $790,000 in 2002.
Biddle estimates his Web site will sell $2 million this year, 80 percent of which are Hot Wheels. He expects to earn $70,000 from running the Web site and another $50,000 to $75,000 from selling his own classic Hot Wheels that he buys from collections around the country.
“I did envision this happening,” Biddle said. “But in the back of my mind, I doubted, because the odds are stacked against you. So I went into it with the idea that this is a joke and it probably won’t work. But it did work. Through the bad times — Sept. 11 and the stock market — it’s still growing.”
The key to the success of Biddle’s Web site is a hot collectible. Hot Wheels were different kinds of toy cars when Mattel introduced the line in 1968. Stodgy Matchbox collectibles owned the die-cast car marketplace before Hot Wheels zoomed onto the scene. Designed to be a sleek and speedy racer on the brand’s signature orange tracks, Hot Wheels’ emphasis was on play.
Thirty-five years later, Mattel estimates that 41 million adults have grown up with Hot Wheels and there are 15 million collectors. The company said it sells six new Hot Wheels cars every second — about 189 million tiny cars sold each year.
Bruce Pascal was 7 when he got his first Hot Wheels.
“It was important that it went faster than the other cars, that it looked cooler than the other cars,” said Pascal, a commercial realty agent based in Washington, D.C.
“I’d race with my friends. I’d collect different cars. I’d trade with my friends. I’d hit them with a hammer. I put a firecracker in one when I was 12.”
Now 41, Pascal has the distinction of paying the most ever — $72,000 — for the Holy Grail of classic Hot Wheels: a hot pink 1969 Rear-Loading Beach Bomb.
“The Holy Grail of any hobby has nothing to do with its utilitarian value,” Pascal said. “My theory was, as an investment, that almost every American male, almost every worldwide citizen, 42 years old and younger, knows Hot Wheels. ... If the hobby matures, it will be considered a steal 20 years from now.”
Paul M. Provencher, 46, of Laytonsville, Md., who writes a twice-monthly column on collectible toy cars for Toy Shop Magazine, said the memory of a great toy helps fuel the Hot Wheels phenomenon.
“Kids grow up and want to revisit their childhood,” Provencher said. “As adults, they have more resources, time and money, to pursue items that hold a special place in their memory of growing up. With all the turmoil that surrounded the ‘60s and ‘70s, it seems a natural that something that so represents our freedom would be appealing to adults today.”
Some collectors, known as ‘completists’, want one of every Hot Wheel ever made. Others try to make a rainbow that includes every color of one particular model. One collector wants only blue cars while another wants only Fords. In 35 years of Hot Wheels manufacturing, Mattel has produced more than 2 billion cars in enough variety to inspire a cornucopia of collections.
When Mike Strauss of San Carlos, Calif., wrote the first price guide for Hot Wheels in 1993, he needed 144 packed pages to survey the hobby. Now his quarterly Hot Wheels newsletter has 3,500 subscribers, and last year 2,100 collectors attended the national Hot Wheels convention he puts on annually.
Year in and year out, he’s seen the prices continue to climb, especially for the 2,000 models produced before 1978 known as redlines for the distinctive red band on their tires.
“Cars I used to sell for $6 are selling for over a thousand, some of them,” said Strauss. “Not everything has gone up that much, but most $5 cars are at least $30. And a lot of people are still just getting into them.”