Market Value Vs Catalogue Value

Hi Brixtonchrome,
I looked at your site when you first started supporting the forum; I think that you are getting there and that is great. (No offense, but surely you could find a prettier face for us to look at on top of every page! )

Service and support will be the differentiators between successful dealers and those who fade away. No one will be able to capture the 'hobbyists' who simply sort ebay listing by cheapest first and buy the crap that often pops up. But those hobbyists who are willing to recognize the value of a true business relationship, dealers who can figure out how to provide the service/support stand the greatest chance of long term success. And tying this back in to the original question, these dealers will also find that they can often enjoy greater margins.
Don

Spot on Don.

A bit off topic we wandered from market prices from cat but, fun nonetheless;

It's also not about just adding video chat per se, but as you mention emulating the face to face. If your nearest dealer is 1000 miles away, then dealers are useless? Why.. So how do you shrink that distance to your iPad, phone or PC?

Live webcams I think could be amazingly popular with chat rooms. Imagine a busy interactive bourse with live action online? Not just customer to dealer talk, but customer to customer, like in here. Bidding wars! It's time to put back fun. That's what is missing.

The dealer product just isn't compelling today when you hone in on price vs product. A dealer relationship is independent of the transaction. I may not like a dealer but I might love his wares. So I have to be a fake person?
Or can I just get a good price and be in my way.

What do chat rooms and web cams have to do with dealers. You want to see a stamp on Facetime instead of in scans? You want a dealer to host a social site for fellow collectors? Huh? I can see utilizing video for viewing large lots in depth while speaking with the proprietor. Harmer Schau is doing that. I am missing something I am sure.

Would you be willing to pay more for the added capabilities/features or should the dealer eat it because they "already make too much"?

Bang on Rogdcam! I think you know the answer to your question.

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

For sure there are a few. Now how many got rich before becoming a dealer and how many made it in stamps is a different question. But walking around the APS show or WESTPEX or NAPEX will let anyone see who clearly has really serious money to spend on their stock.

Just because a dealer spends a lot of money on their stock does not mean that the money came from equity. A lot of businesses borrow and are highly leveraged. I'm just about to apply for 275K of debt to help me do just that. Am I rich? No way.

Most of them are in debt. They scramble to pay their auction purchase bills. Recently a well known East Coast auction house could not pay me my fat five figure auction proceeds check after 90 days had elapsed because the dealer who bid on it was "late". He waltzed into their office eventually and paid because he was there to view and bid on more lots. It was tolerated because he pays eventually. If you cannot afford it do not play. How many of the "players" sweat their net 90 payments? I have been told quite a few. Are some well off? Probably, but not many. In life there are one percenters and the other ninety nine percent. Same with stamp dealers. Businesses borrow money.

And there in lies the misunderstood state of affairs. It's not those specific ideas per se, but rather understanding the ecosystem of how people interact. Sharing expertise and relationship building with people who are no longer going into your main street store. Maybe if you folks start interacting with people in the new ways people are already interacting you can engage new people.

This so called relationship building you all talk about with your dealer, I just don't get. If you live in Kansas and you want US EFO material, you have a few guys in NJ, NY, NH and a few other states. Do you just start emailing, or paying their insane prices to grab their attention. If your not spending money in some short period of time, I can't imagine these guys just talking to you ad-nauseum. Half of them are curmudgeons from the moment you pick up the phone if you call them.

Here's an anecdote:

I bought a stamp that came out in 2018 for 1000. I knew it was high price to pay because it got a lot of press. I bought it via ebay, via a dealer that I learned is local to me. After the deal, he calls me up like 2 days later, and asks if would I like to buy another recent popular discovery. This other issue, is also available on ebay by 2 other sellers for 500. While it also got press it's not well received. He tells me his price is 800 firm. Now why in the world would I pay him 300 more. He said he couldn't do it for 500. I was like, I appreciate you extended me the offer but I must decline, because your price is too high. He has never called me since, with another idea. So he tried to peg me as a patsy since I was willing to pay a high price for one issue, but then when he saw I had a firm handle on market availability he knows he can't turn another sale, and he can't believe bothered with someone despite striking a 1k deal previously. You are only as good as your last sale. In these cases we were talking post office fresh material, apples to apples without subjectivity in the material itself.

I know of dealers who always have trouble with liquidity, and dealers who don't. I assure you that there are dealers who don't have to worry about money. Maybe not a huge number, but they are certainly out there.

There is nothing new here. Klein and his like did business just like it is done now. They used snail mail instead of email. You had a personal relationship either by communicating or, for a few, by entering his store. Everything depends upon trust. Building it and protecting it. Video chatting with someone with dishonest intentions does little but let you see and hear the person with those intentions. Trust and expertise that are founded in your experience not nonsense such as a feedback rating on a third parties platform.

I would think a good dealer is trying to turn over inventory to keep revenue coming in a some profit rather than holding it for long periods for a higher price. All that inventory has an expense. If a dealer blindly prices stamps against a catalog, they may think they have a fair price but it may not sell fast enough.

Quick turnover is the name of the game today. It didn't used to be, but it's the way to survive now. Obviously in large lots not everything will turn over quickly, and dealers always have a certain amount of relatively dead stock, but very few buy much of anything on spec any more. For decades almost every dealer did at least some speculating, in those days they could afford to.

"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. "

rismoney, you only have yourself to blame if you let a dealer outbid you

Don - the kind if stuff you are advocating for requires knowledge and skills that many dealers do not possess.

.
I am surprised by how few of us seem to grasp how dealers made their money for the first 100 years of the hobby.

No, it was not by finding ways to screw collectors.

In the world of business & economics, what stamp dealers did is called 'arbitrage'.

Simply put, dealers moved stamps from one venue (where they were being sold in bulk) (estate sales, auctions, etc) to another venue (where they were being bought onesy-twosy) (brick'n'mortar stores, and mail order stores).

If a collector had a job or a life, the dealer performed a valuable service.

(Consider antique furniture: yes, anyone could drive thru the countryside, reading obituaries and knocking on farmhouse doors, but that was only worthwhile for someone who was 'in the business', and could both buy and sell enough to pay for the gas, meals, motels, etc.)

My favorite arbitrage story is Pat Herst running off to Europe in the after-mid-40s, waving American Dollars (hard currency) and buying low and, upon his return to New York, selling high.

Now that was arbitrage!

But all that distance is collapsing all around us, and the arbitrage plays are fewer & far between. The internet allows every buyer to be a seller (albeit in an imperfect system), so I can buy a large pile of stamps, take out the very few I want, and (relatively easily) sell the rest. In the past, I needed the dealer to buy'n'break large lots; today, I (and a whole bunch of unqualified twits) can do that ourselves.

Today, it is easier than ever for collectors to be where the dealers are buying stamps, and for collectors to be where the dealers are selling stamps.




This misunderstands the penny starts. If I have a well-trafficked auction, on an eCommerce venue or on my own proprietary site, there is little fear that anything of value will actually close at its one penny opening price ... and there is plenty of reason & experience to think that once you get people bidding, you get more bidding, and the bidders get invested, and Bob's Your Uncle.

(It is amazing how we throw that word 'reputable' around, as if latching our argument to The Moral High Ground makes it impregnable.)




I am reluctant to be optimistic about the level of resources catalog companies devote to gathering & evaluating contemporary sales data for each new edition of their catalogs.

I am also working very hard to prove the value of understatement - even on the internet - but that's me.




Q/ When, pray tell, have declining prices brought more people into a collectibles market hobby?

Near as I can tell, in every market, it is the bubbles that bring in the buyers, not their collapse.

Why? Rising prices trigger greed, while falling prices trigger fears.

Which of these brings out the wallets?

Cheers,

/s/ ikeyPikey