On October 24, 2003, five prominent veteran eTopps participants met with senior Topps officials to present a vision of a reformed eTopps market intended to promote Topps' sales and increase eTopps' value to its participants. On November 18, a white paper prepared prior to this meeting was released broadly to the eTopps community and has been the subject of intense discussion, both laudatory and negative, on the community's message boards.

My fellow members of eTopps Clubhouse have asked me to critically and independently evaluate the white paper proposal developed by Leo Klein (bearabull), Patrick Hussey (crimsondynamo), Mike Masinick (masinick), Mike Clark (ronin), and John Gast (TLV). My only credential for doing so is being a dedicated eTopps collector for nearly two years, though I represent less than 0.009 percent (that is, less than one-hundredth of one percent) of the current total market cap. My experience, financial investment, and strategic insight pales in comparison to the five white paper authors, who each have participated in eTopps since its early days, self-report a cumulative 7 percent financial stake in eTopps, and have contributed greatly to the analytical thinking of the community. But, like them and many other participants, I have committed even more time, interest, and reflection than money to eTopps. I want eTopps to survive and thrive because I profit tremendously from my enjoyment of the program even if I do not profit financially.

Key Features of the White Paper Proposal

The White Paper contains many suggestions that could be implemented individually or in combination for more fundamental reform of eTopps. That is, the proposal could encourage either evolution or revolution in eTopps. The key components of the proposal include:

• revising from terms based on the stock market to sports and collectibles;
• developing more comprehensive performance bonus and statistical fantasy games;
• expanding, revaluing, and making more widely available the reward catalog;
• setting a floor on print runs;
• buying back oversupplied cards on the secondary market;
• increasing marketing to potential new participants, including through offers of a free card in a new portfolio;
• developing new "eTopps" brand name products;
• reducing or eliminating shipping charges;
• redesigning the internet site's design and functions; and,
• strictly enforcing violations against eBay policies in the buying and selling of eTopps.

My aim is to critically evaluate how well the proposals meet the authors' objectives, "to drive IPO sales and add participant value," and grade each proposal's conceptual soundness and feasibility.

Revised terminology

The White Paper proposes overhauling the terms that eTopps has developed based on a stock market model, such as "IPO" and "portfolio," and replacing them with sports and collectible terms, such as "draft" and "collection." While the stock market terms may have attracted new participants to eTopps several years ago, the authors contend that the metaphors have lost their freshness and the bear market makes eTopps less attractive to investors.

Conceptual soundness: B

The proposed new terminology fits into the broader proposal to increase the appeal to new participants involved with sports statistical fantasy leagues. Even without new substantive changes (as the remainder of the proposal represents), a new way of describing eTopps and its components symbolize a changed eTopps. Marketers recognize the market value of new words even without other changes. For example, the NBA Washington Bullets increased merchandise sales when they became the Wizards; Arthur Anderson and KPMG have attempted to move beyond accounting scandals in part by being renamed Accenture and BearingPoint respectively. Changing words alone, however, does not increase sales or the value of the product to participants, and could even temporarily confuse existing members. Cynics could accuse eTopps of merely "covering up" the same old product. Nonetheless, anything that simplifies the initial understanding of eTopps by new members or appeals to new purchasers is attractive.

Feasibility: B

Re-editing the themes and words on the eTopps web page would not be costly or difficult (but would need to be done creatively and thoughtfully). However, it is unknown whether eTopps requires terms such as "IPO" to maintain an exclusive legal market niche, as the authors acknowledge in the phrase "if patent concerns force IPO terminology…."

Expanded fantasy games

Building on the emphasis on competitive sports terms, the White Paper proposes that eTopps transform itself to include fantasy contests based on the statistical performance of players in all of the major sports. The performance bonus contests in 2002 and 2003 baseball sets were successful in boosting IPO and eBay sales of cards during the season, but led to a sharp price drop after performance bonus rewards were paid. The White Paper would have eTopps develop similar performance bonuses for other sports and create new games that allow participants to create fantasy teams with players in their eTopps collections. Importantly, the authors would also make two years worth of eTopps cards eligible for the fantasy games. This would allow the contests to start earlier based on the prior year's cards while the new set is rolling out and extend the period during which the market value of the cards is bolstered by the contests.

Conceptual soundness: A-

A greater emphasis on fantasy games would have advantages in increasing IPO sales, secondary market prices, and participant value. This proposal is key to the authors' effort to expand the base of eTopps purchasers by appealing to the multitudes of rotisserie league/fantasy sports players. eTopps' unique ability to combine traditional sports cards and an Internet medium gives it the potential to provide real-time statistics with the only entry fee being owning the players' cards. Last summer I checked CardTarget almost daily for "my" baseball players' performance bonus updates. If eTopps added better statistical resources for fantasy games there would be more reason for participants to log in to eTopps.com frequently. This is exactly the type of return visits that eTopps or any company selling on the Internet should seek. As the authors point out, fantasy team contests would also encourage participants to collect a more diverse set of cards than the performance bonus game that encourages participants to hoard the few players most likely to meet bonus thresholds. My only critique of the concept is that at the end of the day (or at least at the end of the two year window for the cards to be eligible for contests), the actual cards will have to stand on their own as something desirable for collectors. Games and gimmicks can help add value and boost sales, but the core value will still need to be a premium, desirable sports card -- not just a used game piece for a past contest.

Feasibility: B

eTopps' past track record includes one successful contest (the performance bonus for baseball cards) and several flawed efforts at simple fantasy games, such as the post-season home run contest and the pilot of a football contest. I initially mildly enjoyed the home run contest, even if my small collection required me to field Mike Mussina as a power hitter (a prospect only slightly less laughable after Kerry Wood hit a playoff home run). But that is the point: if eTopps regularly ran such contests, I would be sure to have more home run hitters or strikeout pitchers in my collection. My interest in the contest waned quickly, though, not just due to its limited scope but because eTopps failed to accurately and timely keep up on even such simple statistics as the daily home run count for a small group of players. Even for the more successful performance bonus game, participants had to turn to external resources, including CardTarget and a web page created by an individual member, to track players' performance. While more frequent and improved versions of the games eTopps has run in 2003 will help add value and retain existing members, attracting new fantasy gamers to eTopps will require sophistication in statistical resources and contest rules that has been far beyond eTopps' abilities to date. Another issue is that in at least one prior contest residents of certain states and Canada were not eligible to win prizes. To be effective, the legal status of future contests will have to allow as widespread of participation as possible.

Redesigned catalog

More contests require more prizes, and to achieve this the White Paper would greatly expand the reward points and catalog items available to participants. The current catalog is frustratingly limited. It is available for a few random minutes on most Thursday afternoons when many participants are at work or school. In addition, the catalog has a limited stock and widely varying values for the same number of points (some cards valued at more than $2.00 per point, others with a total value of $2.00 for 5 points). This leads to a rush for the lucky few who have the time to wait for, or stumble across, the catalog at the right time. A few winners may get a high-value card, but many others cannot access the catalog or resign themselves to the less valuable remaining items. Even those who successfully redeem a card often aim for one that will obtain the highest eBay price rather than one to keep for a personal collection. To correct these fundamental problems the White Paper would make the catalog more widely available and stock it with a variety of eTopps cards and other Topps and sports products. Also, the proposal would "normalize" the points required for rewards by revaluing each reward point to equal about $1.

Conceptual soundness: A-

Removing the mad rush and inequal opportunity of the existing catalog by making it available continually, or at least often, and pricing the items in the catalog consistently at $1 per point will greatly expand the value of the catalog to more participants. My own experience strongly demonstrates the authors' criticisms. The two times I have successfully accessed the catalog (once when home sick and once when I took time to access eTopps at work) I have gotten cards in sports I do not even enjoy that I sold immediately on eBay. I have also sold baseball cards that were certain to earn a performance bonus before the end of the season because the higher price the card would yield was more valuable to me than the nuisance and uncertainty of using reward points. Topps has already begun adding items other than eTopps cards to the catalog and allowing rewards points to be redeemed for shipping fees, which helps expand the value of the catalog for those who cannot access the catalog. The authors may go one step too far, though, in recommending catalog items that having nothing to do with eTopps or Topps, such as McFarlane sports figures and sports team jerseys. While Topps can gain from cross-selling its cardboard products in the catalog, requiring Topps to purchase items from other companies seems contrary to the goal of increasing eTopps sales. Another flaw with the proposal is that participants could purchase extra reward points. Allowing direct purchase of reward points adds convenience for participants, but strongly dilutes the incentive to earn reward points by buying at IPO, holding a diverse portfolio for contests, and participating in other eTopps programs.

Feasibility: contingent A

Revaluing rewards points to consistently be worth $1 each is simple, costless (perhaps even revenue enhancing), and could be done immediately even if none of the other catalog changes are implemented. A few participants who have "won" the lottery will complain since they collected their points for a lucky day when they can get top value per point, but more participants will gain ability to get items that they want. Similarly, offering the catalog around the clock, or at least more frequently at different times of the day, should not be difficult if (and this is a big IF) sufficient stock is available in the catalog. But the White Paper addresses this potentially difficult supply issue through other proposals that I turn to next. Therefore I will not question the feasibility here.

Part 2 - Print Run Floors & Buybacks

Part 3 - Shipping Fees, Website Redesign, and Concluding Thoughts