New Issue Double Catalogue Face Value

It is interesting how some stamp catalogues automatically price new issues at least at double face when in fact this is not true in terms of their price. I overheard a collector of new issues at a stamp show commenting on how his investment in new issues over the last few years has at least doubled in catalogue value over what he paid in face value and how he is adding more new issues and holding on to them for more appreciation. The real eye opener will come when he tries to sell his new issues and he will have to sell them for below face value.

Could not agree more. But the problem extends beyond contemporary issues. We philatelists assume that catalogue vendors check markets to verify their values. I suspect that rarely do. If ever. The sad part of this is that while we may know the facts around these "values" novices continually look at these catalogues and assume they are sitting on - or trying to sell - a gold mine.

I'll re-post the same thing I posted in another thread. People just need to understand what catalog value is based on - a single stamp in the grade of VF purchased from a full service dealer. Being that a dealer has to purchase new issues at face value and has a reasonable expectation of a profit (as well as recouping any packaging expenses), 2x face is realistic. Few people are going to sell a single stamp at much below face as it's not worth their time. Even Scott themselves says in the introduction to their catalogs that one can expect to pay below catalog for collections, lots, lower quality items, etc, which is what a discount postage lot would be categorized as. A lot of misconceptions about catalog values could be cleared up if people would just read the introduction to the Scott Catalogs.

Catalog values need to be looked at as a point of reference, not as an expected retail value. This applies to almost any stamp, period, not just new issues.

Edited to add that if Scott valued new issues at below face (or even, say, 1.25x face), collectors would start to expect dealers to sell them in that price range, even on an indvidual basis, which is also unrealistic. Discount postage lots are sold by total face value, the particular stamps that make up that value are irrelevant to most buyers. Catalog values are based on the price for a specific stamp, whereas you usually don't get to pick the stamps in a discount postage lot.

The catalog editors try to point out that the catalog values represent regular retail price of that single stamp/set (not in a large lot, not as part of a larger purchase) from a full time dealer. In other words, it factors in a dealer's labor/profit. Other than just going to the post office, I think we would all be hard-pressed to find a dealer who is willing to sell us a very specific new issue (our choice) for face value or less. Buy a whole batch of assorted (dealer's choice) or from their face value or less bin (again, dealer's choice), then no problems.

That being said, I don't really think 2x face value is remotely close to the average retail price of new issues, even from full-time dealers. I can only think of 1-2 full time dealers that sell new issues at 2x face value or higher. The 2x catalog pricing is an editorial policy issue, and I'm pretty sure the new issue dealers would like to keep it that way.

There will always be "investors" (I do not call them collectors) who will go around buying pads of 1c stamps thinking that they can make instant 2500% profit according to the Scott catalog values. As with any "investment", you have to thoroughly do your homework first.

Artful and khj are correct. Even in the Netherlands when I was a lad in the 50's, a stamp dealer explained to me that catalog values are strictly retail. Hence we always used the 50% rule when trading!

Peter

Mis-posted.

Catalogs pricing modern stamps seems to be more an accommodation to dealers rather than buyers.

After spending a lot of time on ebay, I do not think Scott is even close to the true market for common material. It supports dealers even though they rarely pay face. That is the 2x face pricing within 1 year is not representative of the market. Stamps at or near catalog do not sell well on ebay. I am not saying they do not sell but many lots end without bids. I suspect dealers not selling through ebay account for a lot less than ebay yet suspect catalog prices are based upon published lists and not ebay.

Al

angore: Are you saying that some dealers/advertisers can have an influence on the pricing of stamps in some catalogues? Also, could this extend to influencing what stamps are and are not listed and included in catalogues too? Would this not be a conflict of interest if a dealer/advertiser was affecting both if they were trying to push the sale of something that they had for sale? Should stamp catalogue editors/consultants mostly be stamp dealers/advertisers and/or stamp specialists/expertizers? Should dealers/advertisers be on the editorial board of any catalogue or not given that they have an interest in selling their stamps? Dealers and auctioneers probably have the best experience at knowing what the current market value are for stamps, but is this ever really/actually reflected/shown in any catalogue pricing?

Catalogues were traditionally the price-list of an individual dealer and, in the case of Gibbons and Yvert, still are. As I understand Scott, with whose catalogues I am not familiar, it arrives at US prices by looking at a market that consists of domestic dealers and auctioneers. I suspect that its pricing for overseas issues may entail translating £s or €s into dollars.

What is the purpose of a 'catalog'? If it simply a publication used to communicate details and assist with identification then we don't have much to talk about. The issue arises when they cross into trying to assign value. Perhaps they ought to change the titles from 'Catalog' to 'Retail Price Guide'?

But in this day and age any hardcopy catalog trying to communicate values is going to be out-of-touch as soon as it is published. Prices constantly fluctuate; the most feasible way to communicate value is in real-time and online.

So I agree that hardcopy stamp catalog values are, at very best, rough guides for understanding the actual value. Philately doesn't seem to mind this; on some level requiring 'special knowledge' has always been embraced by this hobby.

I think that some folks are now avoiding buying these expensive hardcopy catalogs (except for the old school folks and specialists). For these hobbyists it is far easier, cheaper, and quicker to go to the SCF forum and post ID/value questions. (And no special knowledge needed.) This is demonstrated by the number of posters who are not simply asking about one or two difficult stamps, but rather use the forum for IDing many, many stamps.
Don

Scott publishes new listing for stamps still on sale by USPS. For example, the new 2016 American Landmarks LaCueva del Indio, face value $6.45, is listed as a value of $13.00 by Scott. The basis has been to just mark at 2x face value. Scott states their values are retail: "an amount one would expect to pay for a stamp in the grade of Very Fine with no faults". Scott prices based upon auctioneers, published dealer price lists, etc.

So, how did the $13.00 get determined. Scott is making assumptions for a "dealer" (they do not define dealer). The dealer of 1989 (the first year revalued everything) is different than now and more are selling person to person through places like ebay. They claim to use published dealer lists, etc. but that is not where all the stamps are sold.

When they make the assumption of 2x face for initial value they are making accommodations to dealers. In the above example, if a dealer has fixed costs, I would expect it to be fixed amount over face not 2x.

It is sort of a game since some dealers very often say SCV $x, priced at $y (often well below SCV) to imply a bargain. Others use Brookman to make the percentage even higher. Some dealers revolted back in 1989 since the "value" decreased and shows how Scott can influence market prices rather than just report the market prices. It is interconnected.

Dealers often sell using SCV and Scott bases upon dealers...kind of a circular loop. Only when a specific item has much higher demand does the price change such as one a particular issue (like topical issues) or like the Jenny has a lot more interest than general ones.

Thanks to ebay and other outlets, we see the true economy that is not reflected in retail catalogue prices and people are always surprised that when they try to sell their collection they will get a very low percentage of catalog...like any collections with post 1940 material.

For modern material,I find it nearly useless since you can get many issues including high face plate blocks at face if you wait a few days and you do not need to buy $100 work to get a collection to get one.

Al