Wake Up And Smell The Roses @-'-,-'-,--

One of the most significant changes that has occurred with the advent of the internet and the technological revolution has been a shift from a 'seller's market' to a 'buyer's market'. In years past a dealer could simply buy inventory, add a mark-up, promote the business, and make a sale. Rinse and repeat. Because competition was relatively limited, this approach worked well.

But consider what happens to that approach if customers were suddenly presented with virtually unlimited offerings. No longer limited by a handful of choices, they now have hundreds or even thousands of possible places to spend their money. This is exactly what has happened with the arrival of the internet; hobbyists no longer have a few brick or mortar stamp dealers to support, they no longer have to wait for a stamp show to attend. Instead, they simply get online and spend their money at their leisure and with an unlimited number of sellers. The number of choices for buyers has exploded in breadth.

The first, traditional response to this change is to lower prices so that an offerings stand out from the herd and attract buyers. This painful approach will work to a degree but has an obviously negative impact to the bottom line. The lowering of prices across the board has also lead some to incorrectly believe that the hobby's health is in decline. But even if the market finds new bottoms, the fact remains that in this new era a seller has to find a way to stand out against a huge number of competing offerings.

And this same problem exists for organizations who are trying to sell memberships. Hobbyists now have an incredible amount of membership choices including those which are free (like many forums and online communities). No longer can philatelic organizations count on simply chasing and selling a renewal once a year.

The new marketplace is one where 'selling' is not effective and the focus has transitioned into 'serving'. This means that you have to provide help by sharing valuable information, proactively connecting with buyers to help them, adding value via technology, and demonstrating expertise in your content. This 'value-as-a-service' has been written up by SCF member cjpalermo1964 in an excellent article "Collector's View: Philatelic Value as a Service" which can be seen in the current ASDA Magazine and is also posted on Stamp Smarter here http://www.stampsmarter.com/learnin...Service.html

Don

Good article.

"Limited" is a very relative term. Back in the day, there were FAR more dealers around then today. It's true that it was not at an ebay level, but there were a lot of choices in those days.

Granted that there were in the past many more true dealers than there are today, but realistically an individual collector had easy access to only a limited number of those dealers.

There is also a need to accept the fact that the Internet has changed things to the point of no return. And to embrace and leverage on the Internet if one is to survive in the new business order.

How many times have I seen stubborn dealers refuse to acknowledge that the Internet has changed the way business is done, preferring to cling on to their traditional ways of selling. Most, if not all, have fallen by the wayside over the years. On the other hand, many who accepted and embraced the Internet in the early years, and are now effectively using the Internet to provide value as a service, are thriving.

While the same also applies to philatelic societies, I think the societies face other equally daunting challenges, such as getting volunteers to fill key positions such as journal editors and webmasters. Let's face it - how many of our stamp clubs have their own websites to establish their presence and reach out to others?

There were a lot more traditional dealers (primary sellers) in the past but that is a narrow measure. The measure is how many are selling and how many are buying. ebay has many sellers but not necessarily traditional dealers.

A better measurement of the hobby really should be transactions (commerce). For example, if a dealer has the same transactions as the past and the total revenue is down, the dealer will consider the mark is down. Actually, the market is fine but the valuations have dropped. There is way to much focus on measuring market sale valuation. Dealers looking for the big sale. This is where margins (ability to make a profit) come into play.

One key to business measurement is inventory turnover. You make money when you sell it not when you buy it at a low price. Too many dealers sit on their stock for years hoping for that one buyer. The best situation is to have high turns and make money with less margin rather than slower sales and higher margins. Stock that is not moving ties up cash that is not making any money because most values are not rising while being held.

revcollector - and in the good ole days when you were buying from a brick and mortar dealer you had some assurance of quality and authenticity, often a guaranteed return if not satisfied, and a wealth of knowledge - about the entire world. Also these dealers were also very good at managing customer want lists - they'd keep an eye out for stuff they knew their regulars wanted. As an on-line seller I try to meet those standards.....but I know at best I'm only at 10% on world issues.

Morning Don and all,

Might need a strong language warning on this thread as some of what has been said or may be said is fighting words to some? Most folks realize that the world has changed, is changing, and will change in the future since the first postage stamp was birthed back in 1840.

The biggest change the internet has made in our hobby is most routine business and personal communication now goes over the either as a string of ones and zeros. Still, keep up the battle cry,"stamps forever" - pun intended.

The economics of our hobby today reflect this change.

Perhaps I did not communicate well, I intended limited to also mean timely access to material.

Not everyone lived in metropolitan locations which offered access to multiple dealers or clubs. Many collectors were relegated to mail order or driving long distances just to find a dealer or club meeting.
Don

Don,

Even back in the day, whenever that was, the "rule of accumulation" kept material desired by other, especially newer, devotes to our affliction unavailable because they were already in the collection of others.

Angore,



Tell that to Langs.

Otherwise...I read the article. I'm struggling with the notion that the idea of "pilatelic value as a service" is particularly novel. Isn't one of things old timers miss about the brick and mortar dealers of the past is the quality of service they provided? I think the article provides some good advice on how to go about doing that in the ecommerce world, but I don't think the idea itself is particularly novel. In economics it is called "product differentiation." It is ubiquitous in commodity markets.

Basil

2 ITEMS THAT CHANGED ------It no longer takes a lifetime to accumulate a nice collection . The access to so many dealer offerings and so many stamp auction firms . On top of ebay listings it becomes a matter of weeks to put together a decent showing on any philatelic subject .

Second , it is so easy for me to sell off what I don't need. So the huge inventories are a thing of the past . Prices are stronger because collectors are buying what they need to increase their collection and selling off un-needed stuff that sat on shelves for years. Giving me the ability to buy new material.

Interesting points in the posts.
The internet has really changed a lot of collectibles markets.

If I had a choice, choice being the key word, I would hands down choose a brick and mortar dealer over the internet any day of the week. Alas, that option is virtually gone. The city that I grew up in had six dealers to choose from. All gone.

Great article. I'm trying to track down the image on Page Two. I've looked on the source website - wystamps.com - and have not found the 3c identification guide. I'm having trouble doing a search on google by image as well. Has anyone been able to locate this useful summary? Many thanks.

Don: I quickly skimmed the linked article. Good points. I'll disagree slightly with comments made thus far about how easy it is now to find material a collector wants. That's easy to say, but not always true. An example for me would be classic US stamps, going through the 1930s, to include all the Farleys, Shanghai overprints, etc.

I'll opine that dealers in those classic US stamps are a dime a dozen. If one dealer doesn't have the desired product, try another, and another, and so on. What if one collects a place like Zambezia? Good luck trying to find even one US or Canada dealer with a decent stock, especially if one does not have all day to sit in front of a computer screen surfing dealer sites.