Can Dealers Compete With Ebay?

What a fascinating, engaging topic for discussion! It seems to me that what has happened is a leveling of the playing field. This can only be good for collectors in general. For a dealer to thrive in this environment, they will have to provide excellent customer service, not ask moon money for common items, and turn over stuff fast.

John

True dealers (i.e. those that make a living from selling stamps) are an endangered species. Unless you specialise or carry stock that really must be viewed prior to purchase, full time dealing will no longer exist as we know it.

Those that survive today are living off the legacy of past purchases and an established customer base. But once that generation hangs up their tweezers, the web based collector/reseller will dominate.

And at some stage, the catalog publishers are going to have to wake up, smell the coffee and align their price points to the new reality.

Unless somehow there are changes I tend to agree with your evaluation of the situation. ebay is a situation where you have a wannabe big time dealer who has limited capitol. He may still work full time and supplements his income by working into the early hours of the morning on his second job. He is a workaholic. Being extra income he can sell the $100 stamp for $10 because this is not dependent on putting food on the table. Makes it difficult for full time dealers.
Tom

sdtom, I think you are missing the point. The person selling the $100 stamp for $10 on e-bay is not a wannabe dealer. It is a collector with duplicates to get rid of. He is listing the item for $10 to let the market set the price. The dealer trying to sell the same stamp for $100 is using the catalog to set his price. If the item sells for $20, it is because that is what the market has determined the value of that stamp to be on that day. Now, if the market has determined the price is $20, how can the dealer make a living trying to sell it at $100? Of course, the market could decide that the stamp is worth $200, and then the dealer selling it at $100 is actually a bargain. The problem is that dealers (and catalog vendors) are not accepting the new reality that market prices have changed due to the access that E-bay provides. Dealers who can adjust their business model to account for this will survive as viable enterprises, others will not.

Something does not sound right ,The stamp dealer selling a stamp with a catalog value of $100.00 for $10.00 does not make sense . What is his cost to purchase the stamp ? Is he purchasing it for $5.00 or less ,then scanning it and listing it and turn around and package it with a trip to the post office all for the $5.00 ----THAT DOES NOT SOUND LIKE A SUCCESSFUL BUSINESS .

The simple answer to the original question is threefold for the serious collector. 1)You cannot buy the low values at a reasonable price on e-bay. The shipping fee is 10 times the value of the stamp.
2) You cannot buy the high values from a dealer. Their legitimate mark-up makes that SCV $100.00 stamp a $75.00 dealer sale.
3)Conclusion? A good stamp dealer will always have their customers and e-bay will march on.
Here in Toronto I purchase from dealers, auctions, stamp shows AND e-bay. Of course I'm lucky because I live in a large city with multiple dealers and auction houses and several stamp shows a year.I realize not everyone is so fortunate and the collector who lives in a remote area has very few options at his/her disposal and e-bay really is a lifesaver.

No dealer trying to make a living can compete with the person selling $100 cat value stamps for $10 (unless those stamps the $10 person is offering are really low quality). If you drive all thge real dealers out of the market, you will have the blind leading the blind as the $10 seller is not nearly as knowledgeable as the full time dealer.

Who do you think these buyers are buying from?

The DEALERS are selling to them.

The dealers dont want to offer low quality or have
the time to handle at a low % thus they make
collections and lots for the unscrupulous buyers.
GO FIGURE!

Really fascinating input regarding our stamp markets!

I've come to the conclusion that there are multiple sales channels for
multiple type buyers. And I think we've discussed all of them in this thread.

1. Top-tier collectors & investors -- buy from trusted highly experienced top-tier dealers.
The most well-funded dealers can transact the most rare high value stamps, lots and collections
either buying or selling. They cater to high-value collectors through customized service as well as
public auctions; most have brick & mortar offices, travel to key shows, and own websites.

2. Auction houses provide lower cost collections and bulk lots at "wholesale" prices that supply many
mid-level dealers with their stock. Majority of collectors buy from these dealers who work shows, run ads, own websites and mail lists of catalogs. Much of this inventory is seen on ebay and on sell lists.

3. Strictly online dealers frequently handle mainstream collections and lots and rely on buying larger estate and hoard inventory at wholesale prices and breaking up their offerings into single albums, pages, small lots or single stamps -- much of this action drives ebay. I don't accept that all dealers on ebay are moonlighting and unable to turn a profit.

I bought a huge collection of Israel items at an auction for about $600 (which cost over $700 with the fees they charged). I added roughly 100 items to my collection from this (some sheets, souvenir leaves, and artist signed presentation folders). I have sold about 80% of the remainders on e-bay over the last few months, netting about $3500 after paypal and shipping fees were subtracted out. Without e-bay, I am not sure what I would have been able to get for the remainders, but I am pretty sure it would have been less than what I paid for the lot (after all, if a dealer would have given me more, why wouldn't they have bought the lot at auction themselves). Even though I netted out that $3500, the catalog value of what I sold was easily 2 or 3 times that amount. Most lots went in the $10-15 dollar range, although a couple went for over $100. Most buyers bought multiple items, several with weekly invoices of over $200. That kept my shipping costs way down (I offered free domestic shipping). I started most lots at $4.99 start price (I figured that was the minimum price where I would get enough to cover shipping on fees on each lot and not end up negative). I plan to sell the remaining items in the coming weeks.

adcaplan,

I have only attended one live auction held at a local auction house.
This company auctions many different collectibles, but focuses on stamp lots once a year.
I found it fascinating to preview a roomful of estate collections and dealer inventory by the carton load
and then see the very low wholesale sales bids that won most of the lots. I purchased a few small lots,
but I plan to visit this venue again and other similar ones) because as you've described, a collector can't beat the costs to add good material to our own collections, and then sell off the balance on ebay. Works for me!

I bought the lot from one of the major stamp auctions (I think it was at stampshow in August). The lot came up in my saved search at stampauctioncentral.com, and I actually e-mailed the auction house to get some more information on the lot. I didn't attend in person, I just submitted an online bid. If I would have seen the lot first, my bid probably would have been higher, it was a much bigger lot than I thought it would be.