Should You Invest In Retired Webkinz?

The more Webkinz and Lil Kinz kids (and grownups) buy, the more popular the toys get, and more pets are coming out every month. Ganz is continuing to bring out more Webkinz, and the Webkinz World website is one of the biggest attractions for kids online. This may remind you of a previous craze for stuffed animals. Just like the Beanie Babies, Ganz has started “retiring” some pets. These pets can still be adopted online; their secret codes still work. But they’re no longer being made, and theoretically this could create a market for retired Webkinz.

When Ganz announces that a particular Webkinz will be retired, that pet sells out quickly. It’s a cycle; people hear it’s being retired and want to buy it. When the demand increases, more people buy that pet, because it’s popular and retiring. This goes on, creating artificial shortages, mostly created by people buying the pets to sell them later, after their retirement, when they’re in short supply.

The problem is that this doesn’t actually work. People buy retired Webkinz and put them up for sale with ridiculous markups—1,000%, even 5,000%. That’s nice money if you can get it, but people, as a rule, do not generally pay $1200 for a pet they could have bought for $11.99 when it was for sale. Yes, people list them for those prices, but they’re not actually selling them at those prices.
You can possibly make money selling retired Webkinz, while the craze lasts. If you mark them up 100% or 200%, and sell retired animals at $25 or $35, you can make a nice return, actually sell the stuffed animals, and make a nice extra income.

The key phrase here is, “while the craze lasts.” You may remember all the retail stores that sprung up selling Beanie Babies a few years ago. Not one of those brick-and-mortar stores is still in business. Those vendors actually lost their businesses because they were based on a fad.
When Webkinz fades, many people will lament that they had “tens of thousands of dollars” in inventory when the fad ended. Actually, while they have inventory priced at those levels, it was never worth that, or they could have sold it for that.

Buying retired Webkinz because you want to own them is great. Buying them because you’d like to turn them over at a reasonable profit is fine, too, if you’re willing to risk the money. But buying a retired Webkinz is not a retirement plan. They’re popular now, but they will not stay this popular, and like every bubble, this one will burst.

There is nothing inherently wrong with Webkinz, or even with buying the retired pets and reselling them. It’s just not an investment strategy. It’s a hobby, and it may be a way to make a little cash. But true “collectibles” increase in value over time. Webkinz only increase in value while Webkinz are popular. After that, they’re just stuffed animals. They’re cute and all, but they’re not an investment vehicle.