Market Value Vs Catalogue Value

While the average dealer may have a smaller inventory compared to 25 years ago due to the impact of ebay, saying all dealers have only a piece meal inventory is a gross overstatement.

While it has been interesting to read the responses to the general question, I have been completely unprepared for the level of condescension and rudeness that was in Codehappy's response to a very genuine concern that I raised. I apologize if what I wrote seemed to be off-topic. I don't think it was. My issue was never with the actual question itself. It indeed has a correct and sound economic explanation that has been clearly enunciated by several people and I suspect, over and over again. My issue is with the refusal to accept that explanation, which is clearly the truth and to go off and use this topic as a springboard to attack dealers and suggest that they are greedy and they overprice stamps.

As a collector you are always and forever well within your right to politely decline to pay my price. But you have no inherent right to know what I paid for the stamps I am selling you. It is none of your business, and unless you have tried to earn a living buying and selling stamps, you have no idea what is involved in terms of costs and in terms of sacrifice financially. So even if you did know what my stamps cost, you aren't in a position to know what I need to charge to break even. Actually, I have no problem telling customers that I can trust with that information. But the truth is there are very few customers that I can trust with that information who treat me fairly as a dealer. That's the thing: trust is a two-way street and many on here seem to act like it is only the collectors who are entitled to be treated fairly.

My central point is that dealers are the lifeblood of the hobby. Without them there is no liquidity and to a large number of collectors that IS important to them, rightly or wrongly. There is also no organized and reliable source of supply. I understand that there are some who think that things will be just great when all collectors are trading with each other, but I would contend that is simply because dealers have NOT yet died out and it is a classic case of not appreciating what one has until it is completely gone. If bartering were an efficient way to conduct commerce, then we would be doing it for everything, and the fact is we don't.

I personally agree with Brixtonchrome. I have no problem at all with dealers, either in the stamp hobby or other collectible fields I have been involved in. They add structure to the hobby and as I think back on all of the transactions I have had, the best items have come from dealers. There are certain dealers, particularly in historic manuscripts, for whom I have never regretted making a purchase, even retrospectively over the past 35 yrs, even when I thought his prices might have been a little high at the time.

I personally don'tCare what a dealer paid for an item although you can sometimes find the price paid from auction realizations. In general it would appear that the markup is 70-100%. So what? At the end of the day, they found and bought the item and are offering it for sale. No one is forcing you to buy; it's a free market economy.

I think that dealers used to be the lifeblood of the hobby. They no longer are, as I am sure the percentage of sales that come from dealers has dropped dramatically, as direct collector to collector sales have increased (via E-bay). The need for a middleman has been reduced, and prices have dropped dramatically as a result. This may not apply to the top of the market, with the expensive, high end stamps, but in the under $100 area, I guess dealers are being squeezed out. In areas where dealers used to be able to charge premiums because as they would say when are you going to see another one? they no longer can, since you might see another 20 listed on E-bay at the same time.

Wow. I don't know what to say. You have this backwards. Collectors are the lifeblood of the hobby. At one time dealers saw a profit opportunity in providing easy access to stamps to collectors. Therefore it became a business.

Dealers providing liquidity? That is almost laughable. If anything, their exploitative approach of outbidding collectors to then further markup prices to retail price levels, and send those inflated numbers to catalogs to justify their own flawed business models isn't providing liquidity. It's a hoarding and cornering model aiming to extract the largest margins off collectors.

Then these collectors want to sell their collections they spent lifetimes acquiring, to then find those same dealers offering pennies on the dollar, for the very same wares they hawked. Dealers don't want to reveal their paid costs, because they are either embarrassed they overpaid, or more probably ripped off a widow at an estate sale. None of my business, yes, but the disservice is on you. Why not be transparent? Honesty will go along way to improving things. What you charge, has no relevance to what you paid. You could have bought a stamp for .50 at a USPS window, and it be worth 5k. So what. Same if you discovered a 233a in a bulk sale. You can charge whatever you want, but you will be out of business like all the others as collectors continue their shift to more sensible sources.

If a dealer provides a customer with value add, like knowledge expertise or whatever, that's one thing to pay over. But in online transactions that's largely not the case.

But if a collector just wants to buy stamps at the best price and they know what they want, I shouldn't have to pay a 50% vig on a Columbian because of your carrying costs. That's not my problem, but dealers made it as such.

In general I don't see dealers _really_ lowering prices to make sales. This is the lunacy of greed and it is what is undermining the hobby. Telling me a stamp is 1000 to buy despite 10 auctions in the last 2 years saying it is 500 is not about understanding a business model. I get you have to pay 100 in buyers fees. I get you have to pay listing fees. I get you have to advertise. I get you have to have an alarm system, a safe, insurance, etc. But the point is, for a collector that is your problem, not mine. Don't pass your costs on to me. It's a 500-700 stamp. Over that, its a rip-off. Ripoffs shouldn't be conflated with dealer scams, whereby small numbers of dealers collude to provide to ultimately provide seemingly independent liquidity, or whatnot.

If you weren't in my way at auction outbidding me, for the sake of simply profiting off me later, it would have been mine or another collectors in the first place.

When forums like hipstamp gain more traction, particularly as ebay becomes less sensitive to stamp buyers and sellers needs, dealers are going to feel the crunch even more. The desire to move wares faster is coming, and you waiting on your inflated price buyer soon will never arrive.

Outbidding collectors?????? NO dealer can afford to outbid collectors at auction 99.99% of the time. The only exception is on a unique item in a dealer's specific specialty area where he knows multiple collectors must have the item for an exhibit. Then he might be able to get away with it.

If anybody thinks that relatively anonymous online transactions on venues such as ebay are the way to go they need to perhaps rethink that position. If the day came when that was my only choice to purchase a thousand dollar stamp it would be my last day in the hobby. No, when I drop serious money I want a real business to deal with. NYStamps, Anthony's, Bargain Bill and so on are my choices? Laughable. By the way, if you calculate the profit on the crapola that many of the usual ebay suspects make off of their fine wares it is likely greater than the profit a real dealer makes on the real goods. When dealers disappear the hobby has disappeared. Sure as the sun rises.

This is really sad rismoney that you such a low opinion of us. The reason why we are at auction is because we need material to supply to our customers.

I can't speak for all dealers. We are just people. Some of us are good and some of us are not good people. Some collectors are not very nice people either. Philately is as varied as humans are.

I myself gave up a six figure accounting career and took on a lot of debt to make less than $30,000 a year as a dealer. If I never make more than enough to cover my debt, I am fine with that. I am not greedy. I write and publish in-depth weekly blog articles and I do so for free. I give back to the hobby that has been so good to me. I can appreciate that not everybody does this. But to say that I am ripping you off because I expect to cover my costs of acquiring and maintaining a stock is ridiculous. Go read my post under "Will stamp collecting survive?" if you want to understand where I am coming from.

Just because a stamp sold at the last 10 auctions for $500 means just that. It means that on 10 days the bidder competition was enough to realize $500. That's all it means. If you are happy only buying at auction, fine. Go ahead. The same goes for any other product or service you buy. If you know cars you can do your own brake jobs, if you know electricity you can do your own wiring without killing yourself. But not everybody wants to do that. Some collectors appreciate the knowledge and expertise that good dealers provide, as well as the fact that they save them the hassle of locating the stamps they want. A good dealer tries to help you get the very best collecting experience possible. I'm sorry that has not been your experience, or then again maybe it has, but you just can't see it to appreciate it.

People like you are the reason why dealers are only offering pennies on the dollar now. What are you supposed to do? You tell me. If I can't sell a VF hinged stamp that catalogues $100 for at least $30 then how much should I pay today, when I could have sold that stamp for $50 ten years ago? Huh? In the previous stable market, dealers could and did pay more. I know, because I used to work for one and he used to pay 30-40% of catalogue and then he sold for 80-90% of Scott. That may seem obscene to you, but that is only because you have no understanding of the cost structure of being a dealer and you don't care.

How many rich dealers who drive Ferraris and live in mansions do you know of? Name one please.

Oh, good grief people! There is far too much personal opinion being proclaimed as absolute fact here.

We all collect, invest, buy, and sell differently, for a myriad of reasons... and that's perfectly fine. There is no single right way to collect or buy/sell.

The relationship between collectors and dealers is a symbiotic one. One is not more important than the other, and both cause the other to succeed.

The declarative statement above about there only being one reason to collect, and that it must be for enjoyment and not investment, is frankly bovine excrement. Why can't one engage in both collecting and investing? I collect primarily for my enjoyment, but if I see an item or lot that I believe to be underpriced or unrecognized, you can be darned sure I'll consider buying it as a long-term hold for future trade or resale. Why wouldn't you?

We're getting caught up in the same old fruitless debate that ultimately stems from the egotistical notion that "everyone should be collecting, buying, and selling the way *I* do... any other way is wrong!"

And there you have it. The economics of dealing don't work if your inventory depreciates. This further escalates and causes you to adjust prices to new unrealistic levels based on current market conditions, or dare I say take a loss.

My opinion is low on dealers. It is because the decisions they made historically to get them where they are today as businesses, are not the ones to help them or collectors (customers) thrive for tomorrow. Perhaps it's a symbiotic relationship, whereby they realize the customer (collector) comes first. Go to where the ball will be, not where it was.

I just had a looks at your site, and you may be on the right track with regard to educating. Kudos for that.

As for the hobby disappearing when dealers do, that's laughable too. The hobby is stamp collecting, not stamp dealing. If all the legacy dealers disappeared, a new wave of businesses would surely appear and find new opportunities.

I posted a link about video game collecting and a guy who raked in 100k on a single game. New in box, grading, original printing, all the jazz. Just when you think there's nothing left, or noone cares an opportunity is born.

Oh well.

Where is your evidence about the decisions dealers have made? I acknowledge that there are obvious examples of some bad dealers ripping people off, but to you really believe that all dealers are like that?

I never said the hobby was stamp dealing. You are twisting what I said.

Actually I just lowered my prices across the board and I am 2-3 weeks away from developing a tool that will allow me to process stamps far more quickly and efficiently, and will allow me to charge less.

I also take consignments now. Of course I recognize that I have a duty to my consignors to get the best possible price, while selling their stamps in reasonable time.

All of my arguments here are made to show you that at least some of us are valuable to the hobby and do provide value, and I resent collectors like you going around and loudly tarring us with the same brush.

The thing is, I won't be able to keep my website up and running if I can't make a living - not because I'm greedy, but because it costs me $200-$300 a month to maintain and took me months to build. I simply won't have either the time or money. You see value in it now, but you aren't wiling to pay for that value, so guess what? if most collectors think like you, it's gone, along with all my devotion to trying to share the hobby with others and grow its base.

well, that was a lot of text.

and since "we" underthink things here, I go right ahead, skip most of the text and blurt out my thoughts.

catalogue prices hasn't changed much over the years (in europe). supply and demand has changed A LOT!

some countries cost around 2% catalogue, and some cost 25% as a general rule.. and the add premium for good quality and so on.

catalogue value is a useless number since so many factors can affect this number. The ONLY thing that matters is market value.



you CAN collect as an investment, but that investment won't be worth much long term.

what I do is I buy and sell the area I have most knowledge on, and I can always put something in my own collection for free, or make a profit to buy something for my collection - sometimes even both.
so I have a collection now that hasn't cost me much, what ever it sells for when I part with it will surely be a profit, it might not be much, but then I will have had so much more enjoyment from it from keeping it so long.

In my opinion many stamp dealers have made a slow and awkward transition to online; some have failed. Many stamp dealers originally just had a 'web presence'; this was good for a simple phone number lookup and was useless for anything else. Then slowly some began to add store fronts, many used a cookie-cutter WordPress add-in which made their sites look like every other site in the world.

But where are the online dealers which have successfully figured out how to emulate brick and mortar dealer service? Where can a person who just inherited stamps get help by using a real-time camera on their phone to get feedback from an online dealer? Which dealers support real-time chats with file uploads natively on their own sites? Which dealers offer extensive content, free tools, and other educational features which help hobbyists? Where are the online stamp dealers who offer the kind of transactional service and support that we are seeing out of sellers on Amazon? I think there are few online stamp dealers which are now slowly getting there but this is 2019 and not 2001. If more had mastered the transition years ago our hobby would have benefited.

And don't me started on how a better transition of philatelic publishers would have helped the hobby.
Don

Don, I am one such dealer. But don't take my word for it. Look at my site: www.brixtonchrome.com.