Can Dealers Compete With Ebay?

The entire question is wrong.

Dealers do not compete with ebay. ebay is not selling stamps. ebay is providing a platform for businesses and individuals to sell their stamps.

The only way the question is correct is if you mean how can a dealer compete with ebay, as in using ebay as a competitive tool.

ebay is one tool that is available to a stamp seller (dealer or collector) may or may not use to sell their goods. There are lots of other tools as well. It is up to the stamp dealer to determine how to best use each tool (if he chooses to use said tool) to move his or her inventory at the highest possible price.

I don't think it's "grumpy collectors", Jenny2U. It's grumpy dealers.
I am a very happy collector - happy to snap up all those low-priced stamps.

Totally agree with Jenny2U. Everyone collects in their own way. I would have to place myself in the category of "bottom feeder." The Austria definitives set I posted about yesterday in the "recent acquisitions" thread cost me $300. There are several other sets being offered on eBay- for $500 and up. Why would I pay over $500 when I can add that set to my collection for $300?

The stamps haven't changed and neither have the players. The difference is evolving market trends-

1- We all know the hobby has declining numbers of participants thus demand is dropping
2- ebay increases the degree of competition which is causing adjustments in the price of goods

Lower demand and increased competition cause downward pressure on prices. It's a basic law of economics. Dealers and the major catalogs must catch up.

I'm with Jenny too (not literally,as I'm looking at the rain in London). There's nothing inherently better about buying expensive stamps than building up a collection of cheap ones. They're both just ways of filling time, with the former being easier for the wealthy. Probably the only expensive stamp I've blown money on was a George V £1UPC. Does it give me more pleasure than hundreds of cheaper stamps from, say, the French Colonies? No, and I probably wouldn't lay that sort of money out again for just that reason. And I didn't become nobler for buying it and owning it. On ebay versus dealers, I'm somewhere between the two. I don't buy from either, but I do buy every month at auctions, which seem to enjoy vigorous sales to mugs like me and, to ebay dealers.

Geoff

Geoff do you typically buy intact mounted collections, box lots, or...?

shermae

I still sometimes buy mixed lots, although the thrill of the sort tends to be dissipated by the quality of some of the content. I mainly buy country lots, usually, but not always, housed in albums/stockbooks (which is a useful source of otherwise expensive accessories). I tend to move around the world, although I've picked up a lot of French-related material lately. So, for example, my hope (not necessarily expectation) would be to find the Austrian set you posted in a collection, rather than singly, although at some point the gaps will probably drive me back to ebay. The worrying thing is that my price range seems to be edging upwards, even at low/middle-range auction houses!

Geoff

The issue isn't buying 100 common stamps for $1.99. The problem is the aforementioned Race to the Bottom where prices keep going down and down and down in a viscious circle. It certainly isn't good for sellers. As for buyers, it depends on whether you are starting out or already have a lot of stuff, but either way, it means what ever you buy this year will be worth less next year.

I wouldn't say that the result has been a "race to the bottom" per se. Rather, I think what ebay and other online portals have done is democratize the retail stamp trade business. Before the internet the overhead costs of running a professional stamp business were quite high, which I would say ensured that only a small percent of collectors who has dreams of turning their passion into their profession actually were able to succeed in the endeavor. Now however, one can simply start up a business with a few keystrokes and reach a much larger audience than traditional stamp dealers ever could.

More retailers with more product, even if the number of collectors remained the same over the past thirty years, undoubtedly will result in a drop in retail prices for those items that are in large enough supply but were never seen as packet material fodder back in the day. These meat & potato middle-level value items of a few dollars to say around a thousand dollars have therefore dropped in value for the most part because the supply now available on the marketplace is much larger than before, without the number of collectors growing demand for these items at a similar rate. Eventually an equilibrium point will be reached but the cold hard reality is that a lot of stamps that were solid steady growers in value pre-internet era had those values because the amount of material in the marketplace was limited by the small number of dealers who could provide the material. Retail dealers in the 1970s and 1980s were a classic oligarchy, in a sense, and the power of this oligarchy has been broken apart thanks to the internet.

For the collector who is not overly concerned with how much a collection might bring in the years to come, these really are the best of times to be starting (or in my case, starting over) a collection. It's only once you get to the truly rare stamps that things begin to be challenging financially, and it is exactly these items that are continuing to appreciate in value, as there remains more demand for the items than supply in the marketplace.

But many of the collectors who are now selling on ebay are not being dealers, they are merely playing around, or at best just trying to recover their cost on a part of a collection they bought that they don't want to keep. No dealer can possibly compete with that.




But that is exactly what it is when you have impatient sellers like nystamps offering up tons of stamps every week starting at 99c, most of which they will be selling another example of the same Scott number again the next week.

If the impatient dealer sells at 99¢ that must indicate the supply of the stamp is high enough to warrant that low a price. In the end the dealer will run out of supply and the cost to replace to sell again will be too high to justify the low price. Or the dealer will simply run out of his or her personal supply and be glad to be rid of it. In any case the laws of supply and demand will eventually work out the value of the item.

And I don't see any reason not to call the casual sellers of stamps dealers. They are dealing in stamps in the marketplace. They may not do so as a full time profession, but they are still dealers nonetheless and it makes no sense to try and limit the term solely to professionals.

And how is this a bad thing? The marketplace will determine true value, at least at that moment in time. Next week or next month the price might be dramatically higher or lower, depending on the exact condition of the stamp and the parties bidding at that time. Is that not better than prices artificially propped up by the traditional establishment?

ebay has opened the door to collector-to-collector sales more so than anything else in the last several decades: a fundamental paradigm shift. Instead of stamp prices being kept artificially high because collectors had no choice but to buy from or sell to brick and mortar dealers, now anyone can sell to anyone.

Now, granted, this "new frontier" has its own hazards, especially for the unwary or the unknowledgeable. There is no guarantee that any given seller knows what the heck they are talking about or is accurately portraying the condition of the stamp.

There will always be a need for both ebay and show dealers, *BUT* I think that in order to survive, show dealers will need to either find a niche or deal strictly with high-quality or high-end material. The show dealers that deal in "everyman" stamps are likely the ones to fall by the wayside.

It is all about who, what, where, how, why and cost!

Nothing ever really changes.......

I think that is incorrect....
EX: A young boy falls off his bicycle....
Has brush burns, etc....his mother cleans the wounds
and applies a bandage.
Now she is a doctor??

Think about it.

kevin504 - Not a good example as to be a doctor you needs years of formal education and experience. To compare a doctor to a philatelic dealer is a false equivalence.

No one needs formal education to be a stamp dealer - that's a given. Also while some dealers have years of experience so do many collectors. Even dealers and collectors don't know everything there is in the world of philately. Experience as a litmus test isn't a very good as it may only focus on a niche area. It's one reason I can pull what I can out of a dealer's $1 box and sell it for more.

I think this has been one of our more interesting threads as it truly gets down to the economics of buying in our society and the choices of where we can buy from. Here is a good example and tell me if I'm wrong. And purely at random I'll choose artful hinger. Art, looking through the auction list sees a collection he is interested in because there are ten stamps he wants and is willing to pay $1000 for them. He now has 990 stamps he doesn't want and his goal will be to sell them off for a profit thus he is actually getting paid for the stamps he wants. Since he isn't really a dealer he pays no taxes on his resale (s) including not collecting sales tax he can compete very well with Mystic who does pay taxes along with employees and overhead. If he does this 11 more times during the year that is a nice chunk of change say $20,000 that is tax free (assume he doubles his money on the unwanted stamps). However, his stamps which he values at 25% of Scott are being sold by someone else at 10% of Scott as he just wants to collect enough money to recover his $1000. The competition begins. The smaller guy will always win. No overhead or taxes.