Auctions and Pricing
I have been looking on SAN, especially Commonwealth and Canada, for some potential buys. The auction suggested bids are usually 20 or more percentage of catalog value. However, if you look on Ebay you can find what appear to be very nice stamps ( obviously there are many outliers) that sell for 10% of catalog value. Why would an auction house command a higher price? I have stamps right now for sale at less than 20% of CV that are never hinged, and (IMO) in very fine condition.
Also, can someone explain "buyer premium for me".
Thanks
Also, can someone explain "buyer premium for me".
Thanks
Comments
You may be looking at the suggested opening bid if you're looking at auctions that are still to take place. The most important thing you have to consider is CONDITION. And just "looks good" (particularly on The Bay), is far from an endorsement that the item is of a particular quality. And also by comparison, you may be looking at items on the Bay that are under auction, but haven't closed yet. Most of those auction see 95% of their bidding within the last 2 minutes of the sale (apparently stamp collectors are impulse buyers ><).
With SAN, many of the auction houses there have established philatelic reputations. Their staff have looked over the items, and (while not infallible) have a more reasonable approach to value, and also market data from previous sales (not only their own but others).
As a dealer, collector and expertizer, I have found there is a human tendency to be "star struck" in the face of some items by collectors, even when the centering is HORRIBLE! And while there are quality dealers an any platform with quality items, there are some who are better than others. It's like any retail... there are luxury brands, and there are practical brands, and there are discount brands. Same thing applies in Stamps. One of the biggest mistakes I see people make (collecting and selling) is that they quote "CV" of a stamp without considering condition. The CV for Scott is for VF (well centered) stamps WITHOUT other faults, (unless otherwise noted, like the entire series of Private Die is noted that CVs are with "usual faults" because most were attached to packaging, and subject to rough treatment by consumers, BUT if you have one that is PRISTINE, then you can command sometimes as much as 100x or more the CV for such an item.
The same goes the opposite way though, and so many people don't know how to accurately judge "VF". Grading also, is not exclusively "centering" based either, and flaws that require examination to be seen (up to magnification of 15x) will also affect the value of a stamp. You can't see many of these flaws in just a "face" photo, or perhaps a back photo. And alterations (especially on The Bay) of stamps to make them appear more attractive are also rampant (though interestingly, most of these alterations were applied decades ago, and the items continue to fool people into buying them.) I had a beautiful 120 with great margins. But when I examined it closely, ALL 4 margins had been added to the stamp. You can't see that in a scan. You can only see it in fluid, and perhaps only with magnification as well.
So there are so many factors at play. The dealers on SAN can't peddle crap and remain there. On The Bay, it's the wild west, and anything goes if you can find a sucker...
In the last few years I bought items on eBay and it was a bunch of crap which I had to return.
I do not buy anything on eBay any more since most of the items are complete garbage.
Unless you have very very very deep pockets and can hold items for decades, and even that's not a guarantee.
Can you hit the occasional score on an item or two, yes, but if you really want to be a dealer, making descent money out of this as a primary or secondary job, it's the only way to do it in any reasonable timeframe.
Buyer Premiums on auctions can be annoying and the range is anywhere from 0% (one auction house on SAN) to 20% (or higher, especially the European houses), so I simply adjust my bidding accordingly so its pretty much a wash. It seems the better-quality items are sold thru the auction houses although the HipStamp market is pretty close (not counting the psychos, the wishful thinkers, and the bums).
John O'neil: SAN can be as simple or as complicated as you make it. I just have a free annual membership and on my home page, the current auctions are all listed at the top right. Once you click on the auction, you will see what's being sold and a link for the house's terms. You need to register with any house you want to bid with, but that's all found in the 'My SAN' link. I don't feel the need to go any deeper there. SAN offers various memberships that include trends and the like...once you get involved with those options, navigation gets a bit busier. Once you've used it for a while, it becomes second nature.
Greg: I agree, and wouldn't give up the names of my main suppliers either LOL.
Thou shalt not give away the secret of thy success.
LOL!
I was making small talk with a dealer I've know for many years.
I know that at one time he was a buyer for one of the big houses.
When I casually asked "So where do you get all your stamps?"
He got real quiet and wouldn't say.
If someone were to buy my collection ninety percent of it would be junk.
Postage at best.
How do dealers deal with all that accumulation from over years?
Do you sell it by the pound?
Behold the Fisherman! Mighty are his preparations. He rouses the household in the early morning. He conspires with scoundrals and liars, and when the day is long spent he returns, smelling of strong drink, and the truth is not in him!
..
I had a shopping bag full of stamps that little old ladies have been giving me for thirty something years.
I always say thank so much, then throw them in the bag.
I soaked and sorted them. Picked one of each for myself, one of each for a friend,
Then bagged handfuls in little bags and took them to the Goodwill.
They were happy and thought they could sell them.
Maybe for kids or adult art projects, or kid art projects.
I left eBay last year because of all of the junk that was being sold and since I can not use PayPal as my payment provider who I have been with since 2001 before eBay bought them.
Oh, the two other secret ingredients there: Knowledge and Integrity.
So here goes. You want sources?
Siegel Auction Networks
Kelleher Auction House
Smits Philately (Based in Netherlands)
James Lee
Hipstamp
eBay (yes still some there, especially seek out Pete Billis PAVSTAMPS, tell him I sent you)
You may have found that my philosophy is sharing as much stamp knowledge as possible with anyone who will listen to me. This is no different. The "Scarcity mentality of the world" is fatally flawed, mostly because no one lives forever. But also because it unnecessarily excludes others, discourages those who may otherwise contribute/buy/promote/discover something philatelically useful. This isn't limited to Stamps.
Challenge: List your sources. Walk the talk.
Sparks Auctions (and most other Canadian houses where the US dollar has strength over the Canadian dollar)
Dutch Country Auctions
Modern Stamps Auctions (zero buyer's premium)
Harmer's Auctions
Rasdale
Yes, eBay: Noble Spirit
Agree with Noble Spirit
Adding in Northstamp
I think they are selling here now as well.
Also, John didn't explicitly state "entry level lots", and I'm suggesting, get OUT of those lots as fast as you can, as you will never "make money" at it. It's like selling cheeseburgers off your grill in the front yard vs. franchising a shop with supply chain and logos that look like yellow M's (hint hint). You have to get to economy of scale if you want to do this as a serious venture, and for those of you who say you "aren't interested in that", ask yourself why not? The risk too high? It's not... if you follow what I pointed out earlier. Does anyone here REALLY prefer to sell $500 a month spending 100+ hours with 10% margins (after all the fees and shipping, etc etc), or would you rather sell $5,000 a month spending 20+ hours at 40% margins? This is the "tipping point" I'm suggesting. Why not tell everyone how to really do it? We'd have a bunch of great sellers with great material, increasing the value of philatelic collecting, instead of driving it into the race to the bottom cesspool that The Bay and a few others have created.
Just being goofy folks but I can guarantee you that it is an actual story. I do agree with George that most HS dealers don't have the wherewithal to invest tens of thousands of dollars to purchase inventory. Some certainly do but most don't. I'm guessing that John falls into that category and just looking for advice as to what are some good sources for purchasing inventory. Some of George's houses are good places to look as are a few of Scott's but don't forget to look ol' Larry up.
For the first year, I kept none of what I made from selling/buying/selling/buying, and at the end of the year I bought a collection for $27,000. That's when I really became a Dealer and not a Seller. It also was pivotal in my understanding of how to evaluate the value of a collection (the single most important thing you can do) so that no matter what the condition is when you get it in hand, you can still make money off of it. If it sells for more than your maximum valuation, let it go. This is how you are COMPETITIVE.
Anyone can sell something cheap. It takes skill, hard work and a modicum of talent to sell value.
Just having great sources are not what makes this a "competitive business". If you buy high and sell low, you're not going to last long. The real "business" in this business is understanding how to do just that. And there is NO auction I've ever been to (in person or virtually) where one bidder bought EVERYTHING. There have been auctions where I won nothing, and I'm fine with that because people get caught up in the "spirit" of the auction. Don't do that. Set your max, (ensure you including buyer premium, shipping, customs, etc) total cost of collection, and make all those together your max bid. You will win some, you will lose some. And so will everyone else.