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Tuesday, February 6, 2018

The Biggest and Most Destructive Lie in the Hobby of Stamp Collecting

I am compelled to write a post today after an exchange that occurred on Facebook, that left me so angry I just have to speak out. It happened after I commented on a post in a stamp collecting Facebook group. A collector had written about how disheartened he was with the hobby because he couldn't get reasonable offers from dealers or collectors for scarce stamps that he had. He gave examples: a US #1 he said he couldn't get $90 for, a complete set of NH mint 1897 Diamond Jubilee stamps from Canada - nobody was willing to give him more than $400. Sure, he didn't specify what the condition of the stamps was, but a VG set of the Jubilees in NH mint still catalogues at least $4,500 and is worth at a minimum of $1,000-$1,500. So I don't blame him.

What enraged me was the steady din of well meaning but ignorant comments from collectors and dealers alike who were trotting out the same tired lie: catalogue values are meaningless and the real market value of stamps is only 10-30% of Scott. It enraged me because it is so completely devoid of truth, and in most instances is completely self-serving. Some dealers and some collectors in this hobby are incredibly greedy and entitled, wanting something for nothing. To get it, they convince themselves and others that the hobby is in decline and that the market is depressed. The unscrupulous dealer does it so that he can look the widower that comes to him with a valuable collection straight in the eye and say: "I'm sorry sir/madam, it is a really beautiful collection that your wife/husband built, but you see, the market is not what it used to be and stamps really don't sell for more than a fraction of what your wife/husband paid. But I can offer you $X". The collector does it so that he or she can bully the dealer into selling him or her a superb never hinged Bluenose for $150 when it is really a $500-$600 stamp. What is unfortunate though is that the echo-chamber effect within the hobby means that well-meaning philatelists who aren't greedy, but who want to collect sensibly are misled into adopting a belief system that has no basis in reality and this negatively impacts their collecting and the hobby as a whole. In the rest of this post I will explain why and how this is so, as well as why this idea that catalogue values are meaningless is a lie.

So why is it a lie? For the following reasons, each of which I will explain in detail:

  1. There is no "one" stamp "market.
  2. Condition is everything.
  3. The internet has reduced demand for some stamps and increased it for others. 
  4. Correct identification is also everything. 
  5. Most collectors only buy when they are ready to. Price is only one factor in their decision to buy.
I will now explain these concepts in detail and hopefully you will agree after you read and consider them all. 

There is No "One" Stamp Market

Many collectors and dealers I have heard over the years speak of "the market" as if it were this monolithic entity that is perfect and omnipotent. In my recent Facebook argument I had a dealer from the UK try to tell me that the market for premium material was the same everywhere in the world, even when there is overwhelming evidence that such is not the case. It is a well-known fact that demand for material is highest in a stamp's country of origin: UK material does best in the UK, Australia sells best in Australia, Sweden sells best in Sweden and so forth. To assert otherwise is to completely ignore this fact. 

The reality is that there are many markets in philately:

  • There are retail stamp markets in which individually priced, identified and graded stamps are offered for sale individually.
  • There are wholesale auction markets in which both individually identified and larger lots are offered for sale to the highest bidder.
  • There are E-bay auctions, in which items are offered to the highest bidder, but which only receive 7 days of very limited publicity and exposure.
  • There are local show and bourse markets.
  • There are markets at local stamp clubs.
Each of these markets functions differently, both in terms of the quality of service provided with the product, with the quality of the material being offered, and with the types of buyers participating. Because of this, each market will have different price points and the same stamps can sell for very different prices in each market, but there is a reason for these differences, which I will now explain.

The Retail Dealer Market

Being a retail stamp dealer in which your focus is to enhance the collecting experience of your customers by offering an in-depth range of quality stamps and covers, that is comprehensive for your area of expertise, all identified completely and correctly, properly and consistently graded and reasonably priced is tremendously hard work. I say this from my own experience. It can take literally years to carefully build an inventory, identify it and list it for sale. The goal is not to sell stamps quickly, but to make sure that when your customers want something from your area of specialty, that you have the best possible chance of being able to supply it to them, and that you can answer correctly any question they may have about your area of expertise. Achieving this goal requires you to specialize, which in itself requires a tremendous amount of focus and discipline. The benefits to collectors as a whole are extensive: they can shop with confidence and convenience for the exact stamps they want, when they want. They can build collections that are as extensive and detailed as they wish knowing that they have a reliable source for material and when they are ready to sell, they have a trusted buyer with the financial resources and integrity to buy their collection back at a reasonable percentage of what they paid. Collectively, these types of dealers are the lynchpin of the organized hobby of philately and without them collectors' options would be very limited indeed. 

But all of that expertise and high quality service comes at a price. It is simply not feasible for a professional dealer to identify a stamp, scan it, upload the scan to E-bay, or their website, grade it properly, describe it and then price it for anything under $1. It doesn't matter at that point if it is the most common stamp in the world. As a collector, if you need that stamp to fill in a space in your album and you are coming to a professional dealer to help you fill it, you are buying a service from that dealer. To expect to pay anything less for that service, shows a complete lack of appreciation and understanding of what a professional dealer does. If you don't want to pay retail prices, as a collector you do have other options. But retail prices are what they are because of everything that goes on behind the scenes to offer stamps to collectors on an individual basis. Retail prices are based on a standard catalogue. The catalogue price represents an average retail price for the stamps in question. It will never be perfect, but it is actually fairly accurate when it is used for its intended purpose and the one that is very clearly stated in the front of every catalogue: to facilitate retail transactions. If you are using a catalogue for any other purpose than this, then you are misusing it. Period.

Why don't retail dealers monitor the market like E-bay and charge prices based on what things sell for on E-bay? The answer is that if they did, they would never be able to build comprehensive stocks and sell profitably from them because E-bay realizations are highly volatile for reasons I will get into in a moment. To be able to build and offer a stock over many years or decades a dealer has to make a significant monetary investment and they have to be confident that they can realize a return on that investment and their effort. They can only do that when they have a stable and reliable pricing framework from which to work. If dealers had to spend all their time watching E-bay to determine how much to charge, they would never have any time to build a comprehensive stock, or conduct the philatelic research that allows them to expand their service to their customers. This is why there are so many fly-by-night dealers online now, who have a rotating stock only that consists only of whatever they were able to buy cheaply, and lacks any real focus. So in short, dealers use a catalogue as a guide in their pricing and then it is negotiation with the customer in a commercial transaction that sets the final price.

Another very specific fact is that Scott changed its pricing model in 1989. Prior to that, Scott values were inflated by as much as 100%. It was common practice when I was a kid, for a dealer to charge you anywhere from 40% to 100% of catalogue depending on what you bought. If you went and bought $5 worth of stamps with your allowance, you got little if any discount. But if you spent a significant amount with a dealer, you would get a large discount. But in 1989, Scott adopted a retail pricing structure, which meant that prices for most things were slashed by up to 50%. It caused mass confusion within the hobby with a lot of collectors abandoning the hobby in disgust because they thought that the value of their collections had just dropped by half. Of course that hadn't happened. The new Scott values were supposed to represent actual retail prices so that dealers wouldn't offer large discounts anymore. Consequently, many of these large discounts did indeed stop. But unfortunately many older collectors did not adjust their thinking and many still expect discounts of 40-60% from Scott, and so many spaces in their albums never get filled. 

I for one start my retail stamps at between 60-100% of catalogue depending on condition, or 99c, minimum and I accept reasonable offers from my customers against those prices. Often, I will wind up selling for between 40 and 60% of catalogue, although for the 99c items I am selling for more than 100% to cover my time. But my customers over the long-term are buying quality, well described and consistently graded material for around 50-60% of catalogue on average, and because of that, I can afford to pay them much more than 5% when they approach me to sell. 

With all of that said, I have to go back and re-emphasize the point that the catalogue prices are not perfect indicators of value. The prices in them are generally an average of dealer's selling prices within North America in the case of Scott. So the reliability of those numbers is a clear function of how often particular stamps trade. Items that are scarce, for which the demand used to be very low, like Indian Feudatory states, and which didn't trade often because of their scarcity, had relatively low catalogue values. If you look at recent auctions of this type of material, and scores and scores of other scarce areas you can see realizations that are many multiples of catalogue. Other times, very common stamps, for which a large percentage of the catalogue price represents a handling charge to cover dealer overhead, will sell for very varied prices, depending on the dealer. 

So that is the retail dealer market in a nutshell.

The Auction Market

Then there is the auction market. Well established auctions offer individually rare stamps and larger accumulations of more common material in bulk. It is quite common to see the rare stamps selling for between 50-200% of catalogue depending on the popularity of the material, how well publicized the auction is and how strong the auction house's mailing list is for the area in question. These auction houses spend a lot of money on their catalogues and their advertising. They only accept consignments above a certain minimum dollar amount and they spend years if not decades building their clientele. Because of that, people forget that an auction house is a wholesale market. They forget it because a lot of the rare stamps wind up selling for far more money than any retail dealer would think of charging. But where the wholesale nature of the auction market becomes most apparent is in the way they handle common material and in the lack of ongoing service provided to the customer:

  • Descriptions for large lots are usually very brief. Very little if any photos are provided and generally any lot containing more than 10 stamps is usually not returnable under any circumstances. So if you aren't in a position to inspect the lot, you are relying completely on the reputation of the auction house, their description, and their estimate to decide if, and how much to bid.
  • There is very limited right of return on individual stamps too. You have to make prior arrangements for certificates and if you don't, you are SOL in most cases. 
  • Auction houses usually require you to buy at least once a year in order to continue receiving their catalogue. If you don't buy, they cut you off, because their catalogues cost a lot of money to print and mail. 
  • If you want information about specific stamps in a lot or have any kind of general philatelic question, you won't find many auction houses all that receptive. Most will be quite terse and will tell you that they don't have time because they are selling thousands of lots. 
So the auction market is specifically tailored to very sophisticated buyers who are very serious about acquiring top notch material and are able and willing to spend the money to do so. At the same time, they are knowledgeable, and are at the stage in their collecting where they do not need the individual service. 

Because of all this, large lots at auction will often sell for 10-30% of Scott. But that is because almost no work whatsoever has been put into identifying and grading the material. Not only that, but as a buyer you have no idea if the stamps are all different, or if there is massive duplication of 1 stamp. You don't know the quality of the better stamps - usually just that it is mixed. So there is a huge amount of inherent risk associated with buying large lots at auction. Because it is wholesale, it won't sell for anywhere near retail. But this doesn't mean that the catalogue values are wrong. What is happening, is that the lot is effectively discounted for the buyer's uncertainty over what it ultimately contains, what the quality is, the fact that the buyer has to do all the work of sorting and identifying and lastly, the fact that the buyer is buying in bulk. These are the reasons why these lots trade for as little as they do typically. 

Buying large lots at auction can make a great deal of sense when you are just starting your collection, because by definition, you need everything, and a large lot can be a cheap and effective way to get your hands dirty and see if the area you have chosen to collect is really as interesting to you as you thought it would be. But what you will find after a while - after you have bought 10 or so of these lots is that your gaps remain unfilled, or they fill very slowly because you are getting the same material over and over. At a certain point, it becomes very inefficient to collect this way. But if a collector believes that he or she should never pay more than 30% of catalogue, it will never occur to him or her to just approach a retail dealer to fill in the gaps. Consequently he or she will waste a lot of time and money accumulating a lot of unnecessary material. Many collectors will tell themselves that they will sell it, but very few ever get around to it. I know this because I have participated in buying enough lifetime collections to be able to see the vast amounts of duplicate material that they have accumulated, and I can tell that is is how they collected. 

Similarly, selling rare stamps at auction is the most efficient and most responsible way to sell because it allows for the most exposure to the class of buyers who can most appreciate its scarcity and value. The prices will be optimized for the owners of this material and at the same time the buyers who really want it have a chance to buy it because they are notified of the sale, and if they subscribe to all the major auction houses, they won't miss out on the opportunity. 


That brings us to the online marketplaces like E-bay. There are two types of E-bay customer and E-bay listing:

  • Material listed at auction, which is a very small percentage of the total listings on E-bay. Auctions usually represent less than 10% of the total listings in the stamp category. 
  • Material listed as retail "buy it now" or "buy it now or best offer".
Most stamps listed on E-bay are sold as "buy it now", or "buy it now or best offer", which is really retail. Except for some listings that are very cheap, most "buy it now" prices are reasonable retail prices, when the dealer is a professional with a large inventory, as opposed to a hobby seller who is just trying to sell his or her duplicates. 

It stands to reason that if selling at auction on E-bay were the best, most efficient and effective way to sell stamps then nearly all listings on there would be auction listings, rather than less than 10% of them. So why aren't E-bay auctions the dominant listing format? The answer is very simple: E-bay is a terrible place to sell stamps at auction unless your item happens to catch the interest of two bidders who want it very badly, and are willing to bid it up. Occasionally, this does happen. But more often than not, stamps auctioned on E-bay sell for far, far less than the same stamps would sell for at any reputable and established auction house. Does this mean that E-bay is the true market place and that E-bay bidders somehow possess a better understanding of stamp rarity and value than the bidders on the mailing lists of long established auction firms? I very highly doubt it. 

The central comment on the Facebook feed that really got my blood boiling came from a guy named Ryan who tried to tell me, with great authority, bordering on arrogance, that he had been following sales of US material on E-bay and had compiled a data base of prices realized and was about to publish a price guide. He went on to tell me that people were "lining up" to get their hands on a copy of it. Then he told me which sellers on E-bay, that he called reputable dealers, he was basing his guides on and then said that they all grade their material.  He told me that the "numbers don't lie" and they prove that VF stamps typically sell for 10-30% of Scott. Then he gave examples like the White Plains Sheet, which he says sells for $200 every day. Finally he gave me a very condescending lecture about what the business model of stamp dealing in the new age is. 

He was full of it. I have bought from many of the sellers he named on numerous occasions, and I can tell you absolutely, 100% that they DO NOT grade or describe in detail, anything that they sell, at least not for Canada. One seller gives you the Scott number and a non-zoomable picture. Not a scan, but a blurry picture that you can't zoom in on, and no description whatsoever. They just state a catalogue value, that may or may not be meaningful, since you can't actually ascertain the grade. The other seller is a bit better, giving a scan and stating what they consider to be obvious faults, but nothing else except the catalogue value for VF. Then they both start every one of their auctions at a penny. 

Long-established, reputable auctioneers never start anything at a penny. Ever. What they do is they estimate what an item will sell for, which by the way, they can do with a high degree of accuracy if they sell the material often and they know their bidders. They start the item at 50% to 75% of what they think it will ultimately sell for. This communicates to bidders where the bidding will start and it allows experienced bidders to judge what their maximum bid should be if they want to have a reasonable chance of winning the auction. But when you start something at a penny, you take all that information away from your bidders. You are effectively saying to both your bidders and your consignors "We actually don't know what the item is worth. We have no idea. You decide". That does a massive disservice to whomever the owners of those stamps are, because the fact is, collectors are the LEAST qualified to know objectively what stamps are worth. Why? because they don't participate in the broader market often enough to see objectively what market values are. Most collectors succumb to confirmation bias, only paying attention to the evidence that supports their perceptions and ignoring everything else. It is the auctioneer's job to lead the bidders by telling them what the approximate market value is and letting them ultimately decide what it will be for that item, on that day. 

Because of the way many of these auction firms on E-bay operate, material sells very cheaply. As a bidder, you are not going to pay top dollar for something that isn't described in detail and that you cannot clearly see. The exact reasons why will become apparent after I have made all my points. So you might wonder: if auction realizations on E-bay are so low, why does any firm sell there on a regular basis? The reason, as best I can determine is that these firms are able to convince large of stamp collectors, or the relatives of deceased stamp collectors to entrust their material to them, to sell on their behalf, promising a quick sale and convincing them that the market is "not what it used to be". Or, they buy it from estates for very, very low percentages of Scott. They employ large lotting teams of people with very limited skill, whose stamp knowledge is basically limited to being able to handle stamps without damaging them and being able to look something up in Scott, and that is it. That is the only reason I can see how they can process such a massive volume of stamps every week, and why there are never any descriptions, and why quite often, the identification is wrong. 

Most of the time the material I have bought from these outfits, I have been able to buy for the 10-30% of Scott that this Ryan fellow is talking about. But I have been able to re-sell it to my customers for much more than this. So you have to think, that firms like this are getting 25% of Scott on average, which is probably generous. They are paying E-bay and Paypal 10%, of the gross, which is 2.5% of Scott, which leaves 22.5%. That is before they have even begun to cover their overhead, which includes the wages of every lotter on their team and themselves. So you tell me, if they actually buy the material that they are auctioning, what do you think they pay as a percentage of Scott: 10%? 5%? 2%?

The other thing about E-bay auctions is that they only run for 7 days. During that time, there is no guarantee that bidders will see the listings every time they do a search. E-bay has now admitted that their search engine has a complicated algorithm, which they won't disclose, that manipulates search results. Not only that, but many sellers on E-bay have seen what they believe to be clear evidence that E-bay hides listings on a rolling blackout basis to conserve server space. Finally, even though the percentage of listings on E-bay represented by auction listings is low, the absolute number of those listings is very, very high. It would be a full time job for someone to view and follow every auction listing that comes up in a week. So there are far more listings on E-bay than any collector can ever hope to have the time to follow. This means that the amount of exposure and potential bidder competition for every listing is very limited and much less than what it would be for a long-established auction house that publicizes its sales for at least a month, or up to three months in advance. 

What I am trying to say here is that there is no single stamp market. The types of buyers in each one is different, although there is some overlap. The rules of engagement are different, and the prices are different. The the case of E-bay auctions, it is literally a free-for-all. If you offer too many listings that receive limited exposure, start everything off at a penny, don't describe what you are selling and you use catalogue values that may not be relevant because they quality of what is being sold does not meet the grading criteria in the catalogue, well guess what? The realizations are going to be relatively low. But that does not mean that they are in any way indicative of the true, average market value for stamps in general. 

Condition is Everything

Within collecting circles much has been said about the importance of condition. Despite this, there are many collectors and sellers who either do not understand how critical it is in determining value, or they conveniently ignore it in the hopes of being able to sell stamps for more than they otherwise could. If you look at realizations by long-established and reputable firms like Robert A. Siegel, Shreeves Philatelic Galleries and Mossgreen, you will see hundreds or thousands of cases where a difference of less than 1/4 of a mm in centering can mean a 300-400% difference in price and where hinged versus never hinged can command similar premiums. With graded US stamps, there are professional grading firms that issue certificates for stamps graded over XF-85, that I doubt the average collector could tell apart at first glance. For a lot of common US stamps that are worth 10 cents in XF-85, the same stamps in SUP-95 can be worth $30-$40, $200-$250 in SUP-98 and $1,000 and up in GEM-100.

Therefore, it makes absolutely no sense whatsoever to talk about stamp values without discussing condition in detail. Anyone who tells you that they know the market value of a stamp because they have averaged 10 separate auction realizations had better have physically examined the stamps themselves and otherwise ensured that the grades are truly the exact same. Otherwise their analysis is completely meaningless.

The Effect of the Internet on Demand For Stamps

This same Ryan fellow asserted that the internet had reduced demand for stamps by showing people how utterly common most stamps are. While that might be true for certain very common items, it is definitely not true for scarce material. If anything, the internet has increased demand for material by allowing collectors to form very specialized, in-depth collections that would have been almost impossible to form quickly 30 years ago.

For example, for 5 years I collected Nigeria and its component territories before 1914. I bought everything I could find online, from every source that I could find. So I know, that I have probably one of the largest holdings of Nigeria in the world. I don't have everything of course, but I doubt that there would be more than 2 or 3 other collectors in the world with the same amount of Nigeria as me. 30 years ago, when stamp buying was limited to making written and telephone inquiries of dealers it would have taken a lifetime to buy the amount of material that I was able to amass in just over 5 years.

Why does this matter? Well because one of the killers of a collector's interest is the inability to grow a collection. 30 years ago, many areas were so hard to find material for consistently, that they never became popular among the general collecting population. The result was that people stuck to countries and topics for which material could easily be found. Those tended to be countries for which the material as a whole was not scarce, and these collectors tended to cast a very wide net being generalist collectors, because it was the only easy way to collect back then.

But now, with the internet, you can find the most obscure items imaginable. You can decide to collect 1950's postmarks from Armstrong, BC and actually form a decent collection in a relatively short period of time. You can decide to collect one single stamp from one issue and form the most extensive collection ever put together. That holds a great deal of appeal for ambitious philatelists who want to meet a challenge and express themselves through their hobby.

The result is the decline of general collecting, and with it some softening of market values for general, run-of-the-mill material, and at the same time a tremendous upsurge in scarce and specialized material that would have been very cheap 30 years ago.

Correct Identification is Also Everything 

This is a hobby of details. Small details can make a huge difference in value. Some examples:

  1. Small differences in perforation, as small as 1/10th of a hole, can make hundreds of dollars difference in value (the 5 shilling George VI stamp of Jamaica). The 3c Small Queen of Canada perf. 12.5 x 12.5 instead of just 12, is worth over $1,000 for a VF used example compared for just $2-3 for a perf. 12 example.
  2. Differences in paper can also be worth hundreds of thousands of dollars - like the 2c Large Queen on laid paper, which is worth about $200,000-$250,000 versus just $20 or so for a VG used example on the commonest wove paper. 
  3. Watermarks - can make a huge difference in value also. Take early US or Great Britain as an example.
  4. Grills - both size and the presence or absence of can translate to hundreds of thousands of dollars. The 1c blue 1862 Franklin stamp from the US with the Z-grill is worth close to $1 million versus about $20 or so for a common example without any grill. 
  5. Postmarks - A penny black with a yellow Maltese cross cancel is worth over 2000 pounds versus just 100 pounds for a common red Maltese cross cancel. 
  6. Specific rare colour shades can also make a huge difference. The common 3c rose Washington from the same series as the Z-grill above, in the standard rose shade is a $2-$5 stamp in average condition. But there is a specific type of pink called the "Pigeon Blood Pink" that is worth over $1,000. Identifying this colour requires experience because there is no way that the average collector could possibly know what pigeon blood pink looks like without it. 
  7. Plate differences can also be worth thousands or hundreds of thousands. The 1c Franklin stamp from the early 1850's can be found in several "types". The cheapest type is about $100 or so for an average used example, while the scarcest one is over $200,000 last time I checked. In between, are other types that while not as high as $200,000 are several hundred dollars or several thousand. The differences between these types are extremely minute. 

Most of these attributes cannot be ascertained by looking at a scan, unless it is a high resolution scan, and even then, in most cases positive identification is still not possible. This also does not cover areas that are rife with re-prints and forgeries that can only be identified by referring to very minute details that are described in either Serrane or Earee. These areas include German and Italian States, many Portuguese colonies and most early issues of Europe.

This is why stamps that are not fully identified and described do not typically sell well on sites like E-bay.

Most Collectors Buy When They Are Ready

While some collectors buy whenever they see a bargain, most collectors only buy stamps when they are ready to buy them - either because their budget allows it, or because their interest has motivated them to seek the stamp out. I know this because I am a collector too and I cannot recall a single instance in which I have responded to the dozens of unsolicited e-mails I receive every week from dealers announcing % off sales on their stock. As a dealer with an anchor store on E-bay I have tried to run month-long 30% off sales in which I still allow customers to make offers to get even better deals. The effect on my store traffic and sales? Almost zero.  The only time that offering an extra discount really tips a collectors hand is when he or she is close to spending their budget and that one extra stamp or set would push them over and you give them enough of a discount that makes them say "Oh alright!" and buy it.

So while collectors like discounts and will buy wherever is least expensive when they are ready to buy, offering discounts will not usually induce them to buy when they weren't planning on doing so anyway, unless those discounts are so steep that they feel they would have to be crazy not to.

So for all of these reasons, the idea that catalogue values are not a realistic indication of value is at best an inaccurate over-generalization and at worst, it is an outright lie. It is generally very accurate in a retail market - the very market that catalogues were intended for. They are not accurate in the auction markets, but they don't need to be, because those markets rely on the auctioneer's historical experience and professional judgement. They are not accurate in the E-bay auction market, but then again, because of how inadequate most e-bay auction listings are, no pricing data that you could compile based on prices realized would ever be meaningful unless you carefully inspected every lot and controlled for differences in condition and identification. Even then, all it would be is a pricing guide for E-bay penny auctions and not stamps in general.

So why am I so passionate about this and why do I care so much? Several reasons:

 The first reason is that it represents an extreme threat to the continued health of the hobby. I can hear you asking, "but isn't it a good thing that stamps are getting cheaper and the market is getting softer?". Well, no. Not in the long run. The only incentive to preserve objects is a sense of historic and sentimental value to those who are interested in that thing. But to others who possess no inherent interest in that thing, economic value is then the only factor that will motivate them to preserve that thing. Having access to an endless supply of cheap stamps is a boon for the current generation of collectors. But what about when those collectors die? What happens when the relatives are going through the deceased's belongings? I can just hear the conversation: "Hey Jane, I found this large collection of stamps of Dad's, are you interested in them? No? Let's see if they are worth anything.". Then after they find out that they have little commercial value, they throw them out because neither of them are interested in collecting stamps, and those stamps are lost forever. That will happen on an absolutely massive scale in just 2 or three generations if that attitude is permitted to take hold. Consider this: given how ugly and faded the British Guiana 1c magenta stamp of 1856 is, do you think it would still exist today if it was only worth a $1? Probably not.

I happen to care very deeply about the survival of philatelic material, and of this hobby in general. I am on the autistic spectrum and stamps have literally provided my life with direction and purpose, while being a friend to me when no one else was willing to be.

The second reason is that it represents a huge economic threat threat to three groups of stakeholders:

  1. Existing collectors who have spent more on their hobby during their lifetimes than they can really afford to spend on a hobby that will have no financial return. Most dealers in the trade respond to my comments by saying that collectors should only collect for enjoyment and should not expect any financial return. They love to use the analogy of golf as their example. But the reality is that golf is only affordable for the very rich and that most collectors can only afford to spend $100,000-$200,000 on their collections over a lifetime if they can expect to be able to recover 25-50% of that amount when they get old and are ready to sell. But what happens to these people when the time comes and all they can get is 5-10% of what they paid or even less?
  2. Existing professional retail dealers who have invested very significant financial sums of money and time in building their retail stocks, and now cannot sell their stamps at a profit sufficient to make a living. Those dealers either go out of business over time, or they are forced to discontinue many of their offerings, focusing only on the more expensive stamps so that stamp collecting becomes a hobby that is only for the rich.
  3. Existing collectors and new collectors. As entire areas of philately become unprofitable to sell on a retail basis, the number of dealers offering the material will decline to the point where a collector's only option for acquiring material is from other collectors, which is cumbersome, and in bulk from auction houses. While this may be suitable for some collectors, it will not be suitable for most, and certainly not for the duration of their collecting lifetimes. 
In other words, nearly everybody involved in the hobby will be negatively affected over time. The only people that are not negatively affected are those dealers that are not invested in the continued growth of the hobby, and are not invested in general: people who carry no significant stock, never publish anything philatelic, never introduce newcomers to the hobby and can fold up their tent and close their e-bay account at any time. 

This is why I am so compelled to speak out about this. Think about it next time you hear someone saying that catalogue values are meaningless or not a good indication of a stamp's value, and if you agree with what I have said here, consider enlightening them and encouraging them to think about these ideas too. 


  1. Such a great post, thanks for the lesson! I hear frequently these days that the hobby is in decline and that the market is depressed, but I believe this is also a lie. A hobby with 170+ years is surely a hobby that knows the best how to be always in trends, don't you think! ;) Cătălin

    1. Thanks Catalin! I believe that this hobby has a long future ahead of it if we can all fight to save it and allow it to adapt to changing tastes. I think that what made stamps interesting to people is still present in all of us today. It's just that a lot of people now are simply not aware of what is out there and how much fun collecting stamps can be for them.

  2. Here's another amazing post, so pertinent. Actually, the same would goes for so many hobbies.
    The day you write a book, I want the first copy!

    1. Thanks so much JP! It is not my regular post for this week though. I am writing that now!