Cv (Catalog Value) Versus Reality...

Admitting, at the start, that my experience is limited, in my experience "CV" is out of touch with reality. CV is supposed to be "retail value," and take into account "public auctions." Are Internet auctions considered "public auctions?" I ask, because on ebay, auction style listings rarely bring more than 2/3's of CV (at least for the stamps I'm familiar with). And the average auction price is probably closer to 50% of CV.

I'm well aware that "graded" stamps are all over the place in value. I recently was the high bidder on a C6 that the seller graded (implicitly, based on the F-VF/LH description) 75, which in my 2013 catalog has a CV of $55. I won the auction with a final bid of just over $30, 55% of CV. Pretty typical, in my experience. In fact, I win better than 90% of the auctions I bid on by "sniping" with a high bid of 2/3 of catalog value.

How do we explain this? Are we to consider ebay prices "wholesale" prices? (I think not, as dealers sell on ebay too, and they will not stay in business long selling at "wholesale.") Is ebay untypical of the market for stamps as a whole?

Basil

I think you answered your own question in the first paragraph: "CV is supposed to be "retail value"". Catalog value is set up for dealers and insurance companies, not ebay sales or other local auctions.

It is unfortunate but that (to me) seems to be the way it is, has been and always will be.

Sometimes I just compare the catalog value of one stamp to that of another stamp in order to give me some idea of how much or how many times more or less one stamp is relative to another stamp.

In my opinion, for all but the most expensive items, ebay IS the retail market. The CV is useful for understanding relative value once you've pegged an overall percentage to reality, as you have already done. ebay search of completed listings is good for gauging what the going rate is for an item.

It all depends on what catalogue you're using, where the stamps are from, and what the catalogue values of the stamps are. There are plenty of cases in the Indian States I collect where a mere two-thirds of the current Gibbons' catalogue value would constitute a bargain.

Bottom line: generalisations (like this one) aren't to be trusted.

I'm not sure what Catalog Value is other than a very very rough guideline. Actual Value of an item is driven by demand for the item.

In a hobby that is declining in general, one would have to think demand is also declining. I would also imagine that the lowering of catalog values is a pretty unpopular thing to do, so it's only logical to think that items typically sell for a fraction of CV. Now throw into the mix the changing value of the $ and inflation and I have no idea what it all means.

I have noticed some specialized areas quite often sell for more than catalog value suggesting that demand is higher than the supply.

There, now thats all cleared up. lol

One of the more interesting comments. So if I insure my collection at CV, the insurance company will pay off at CV?

But how would CV benefit dealers? Do they buy up collections at particular fractions of CV? I'd think they'd want the CV deflated, not inflated. Insurance companies too, for that matter. I can see where dealers and insurance companies would like the existence of an "objective" third party for gauging value--kind of like the old "blue book" for used cars. But this works only if the values are accurate or reasonable, and I question that for stamp CV's.

I do realize that those interested in the hobby don't like to think of values stagnating or declining, but market forces rule, not the declaration of a catalog publisher.

Various reasons dealers like [irrationally] high catalog valuations.
1,Ego - they are proud to have hundreds of thousands in "inventory" even if they will never be able to sell ten percent of it at retail if they were in business for 600 years.
2,Marketing - they can sell 10$ catalog items for 6$ [40% off!] when replacement cost is 1$.
3,Wheeling & Dealing - when a collection 'walks in the door' the dealer is sizing up the seller as much as the collection. If she senses the seller will take 100$ - that will probably be the offer - so a boxfull cataloging 10,000 will be more desirable than one cataloging 2000 [if for no other reason than 1&2 above..]
I know this sounds cynical, but dealers are not too interested on cv's or percentages.

Most catalog values are not "irrationally high".
No dealer "wants" to have hundreds of thousands of $ in inventory, that is tied up money he can't use. Dealers always prefer the quick turnover.
"They can sell 10$ catalog items for 6$ [40% off!] when replacement cost is 1$". That's called "making a profit". That is what every retail business does with their products. Stamps are just another specialty item, one that often requires the right buyer at the right time.

"Wheeling & Dealing - when a collection 'walks in the door' the dealer is sizing up the seller as much as the collection. If she senses the seller will take 100$ - that will probably be the offer - so a box full cataloging 10,000 will be more desirable than one cataloging 2000"

Honest dealers don't do this, they make reasonable offers based on their ability to make a profit, which is why they are in business in the first place. And any dealer will tell you that most of what walks in the door is junk destined to walk right out again. Perhaps one lot in a hundred is actually worth the time to look at. Most dealers do the bulk of their buying either from other dealers or at auctions.
Most dealers pay close attention to catalog values and percentages if they want to make a profit and stay in business.
ebay is "an" retail market but it is not "the" retail market. Because every stamp is different and an individual item (even though there are many inexpensive stamps with thousands of examples, each of which might be considered about identical) the catalog value is always only a guide. And the items on ebay cost nothing or next to nothing to list, but a show dealer has serious expenses before he sells one item. And most sellers on ebay are not dealers in any professional meaning of the word, so making a profit is a very different concept to those sellers.

CV is based on a rather idealized situation, namely a single stamp in VF (i.e. better than average) condition/grade sold at retail. Dealers very often sell at a percentage of CV and I'd imagine their buy prices are based on CV at some point or another.

In practice, CV is a reference price, and it is useful in most cases as such. Dealers can sell on approval at x% of Scott, so one can make up a want list and know pretty much how much the stamps are going to cost them. For insurance purposes, CV is a published, 3rd party "industry standard" price, which negates the need for insurance company and policy holder to haggle over the value. Catalog numbers are pretty much the "skus" of the stamp world, and those that do business in the hobby need some sort of reference price list for those skus. Think of it as manufacturer's suggested retail price (MSRP) for other items. No one ever pays MSRP, and dealers don't mind a high MSRP because then they can sell at "50% off!".

Also, the catalog publishers really don't look at the price of every single stamp that closely every year. There are some stamps that always sell at a steep discount off catalog, and then there are others - even on ebay - that bring full CV or even higher on a consistent basis.

As stamp buyers and or sellers we develop an understanding of stamp pricing which becomes our own personal stamp catalogue reference.

Comment: "In my opinion, for all but the most expensive items, ebay is the retail market......." Not really. I'm just one person. But I have never used ebay and never will, period.

If one is going to try and determine what constitutes the retail market for stamps, ebay is but one component. APS Stamp Store is another component. Difference is that there are all sorts of complaints about ebay & sellers on the two philatelic boards that I frequent. I have yet to read one adverse comment about Stamp Store.

Have been thinking about this topic! And ebay is my example because that is what I do!

Reality with stamp pricing on ebay also includes mailing cost, ebay store cost, packaging, paypal fees, eBays FVF, listing cost + the time spent making it happen!

Have never seen a catalogue include these costs!But I sure have seen seller do it!

WAIT A MINUTE--------A few nice guys over 125 years ago decided to get many of the price list from many different dealers and sort thru this wide range of sell offers and try to figure a reasonable price to help people out. AND NOW .....AND NOW .....your crying about their idea that has helped tens of thousands if not millions of collectors thru 125 years ........well start your new method and develop your new system for the next 100 years .But I still trust the method these guys came up with over 125 years ago .

ebay seems to be the predominant retail market. At least it is for me. While APS stamp store is a retail market I would guess their volume is way below ebay and their prices aren't competitive though not horrible. I know there are other retail sources. Linns and the AP are full of advertisements. I've gotten solicitations from these advertisers and their asking prices are typically in fantasy land, as if online market places don't exist.

I just went to a stamp show (NAPEX) and every dealer had material selling for far more than the equivalent item on ebay from a trusted seller. I don't know how they stay in business. Ask these guys if they sell on ebay and they just grumble. While I enjoyed looking at the material, what was the point? I would never buy anything at those prices unless it was a misidentified gem.

ebay is the only marketplace I know of that allows easy assessment of the actual going price for an item from multiple sources. Dealers not on ebay must be struggling as I can't imagine they have any customers except those afraid to buy online. I could be wrong though.

Please tell me where to buy from at prices competitive with ebay.

In the stamp specialties I collect, ebay offers a very efficient, reliable, and often inexpensive venue to add to my collections. ebay works worse for some collectors. I can think of the case of 'never hinged' collectors. The best way, and maybe the only reliable way to get genuine classic NH stamps is to visit reputable dealers at shops or shows. You really have to see the stamps in person to feel good about pristine backs. Even stamps with certificates can look spooky and not be a confident, happy purchase.

The APS store is a good place to buy, I have bought there. However, as a guide to stamp value it has little value. It lacks the transparency of ebay in one critical area. ebay lets you search sold items, APS does not as far as I can tell. Basically, the APS store will tell you what price is too high and what has not sold, and may never sell.