This was more common years ago. You do not hear much about this today. What is it?

In short, an attempt is made to buy as many copies of a certain stamp, or set of stamps, in order to manipulate the supply. If many copies are bought, the few that are left on the market will suddenly rise in value. The key is to buy as many copies as you can at as low of a price possible.

The key in doing this is to find a stamp (or set of stamps) that does not have a huge supply. You also want to select a stamp that has sufficient demand.

For example, you could not do this with the Famous Americans stamps (Scott #859-893). Yes it is a popular set of stamps with steady demand. However, there are millions of copies available. You just are not going to have enough money to buy that many sets of stamps. You will probably run out of cash before you buy enough copies to make a dent in the supply.

As you buy more and more of the stamps, the supply goes down. Prices begin to rise because the stamps are not as plentiful as they once were. As you continue to try and corner the market, that means you are paying a higher price to for the last few copies that are on the market.

Why would someone do this? To make a quick profit of course.

The idea is that this cornering of the market can be accomplished within a few months, maybe a year or so at the most. This is why you want to select an issue that has a small supply to begin with. The longer you are in the market buying material to further corner the market, the longer you delay turning your efforts into a profit.

Once you feel that you have sufficiently bought up most of the supply, you are ready to unload the stock that you have accumulated. Timing and manipulation of the market are important.

To unload your hoard of stamps, you have to utilize several different avenues.

You can try running an ad in philatelic publications to sell directly to some collectors. You can’t call one dealer and unload hundreds or a few thousand copies on them all at once. You’re going to have to contact multiple dealers and unload smaller parts of your hoard through each dealer.

If you read old articles in the philatelic press, you’ll learn of some attempts to do this from yesteryear.

I think it’s much harder to corner the market these days for a one major reason - technology. Thanks to email and cheap long distance charges, dealers can communicate with one another much more quickly and efficiently. Back in, say, the 1930s and 1940s, there was no email. Long distance phone calls were not inexpensive. Sometimes it took days or weeks for market changes to be noticed. Today, market changes are noticed instantly.

Today, dealer A can call/email dealer B with, “Jim Smith just walked into my store with 25 copies of this stamp for sale.” Dealer B can respond within minutes, “Yep, he was in my store two weeks ago with 40 copies.”

Stamp dealers are a friendly and helpful bunch by their nature. No one likes to see another dealer be taken advantage of. Someday the converse may come true and you would hope that another dealer would alert you to some kind of scam going on. Dealers are competitive and in business to make a profit. But we dealers tend to look out for one another. There aren’t that many of us left.

For example, one stamp that you could corner the market on is Scott #293, the $2 Trans-Mississippi issue. There were 25,000 printed, but an unknown quantity was returned and destroyed. Catalog values are around $1100 for a used copy, $875 for a mint, no gum copy, $1900 for a hinged copy, and $6000 for a never hinged copy. Cornering the market on this issue may be possible. Obviously, faulty or off center copies will sell for less. With a few hundred thousand dollars though, someone could buy most of the supply on the market.

When you unload the stamps though, you have to do it quickly before everyone realizes what is going on.

Those used copies that you bought for $1000, you’re hoping the market has moved the price to $5000 or $10,000 now since the supply has dried up. If you can sell a bunch of copies in that range, you’ll make money. Likewise with mint copies. You’re hoping the $1900 for a hinged copy is now more like $15,000.

The initial copies you unload will go for a very high price because you consumed all of the supply and drove the price upward. As the market absorbs this supply again, prices will drop quickly and some of the last copies sold may be at the price you paid or even below what you paid.

Again, the whole idea is timing and keeping others in the dark. Thanks to technology, keeping others in the dark is not so easy to do.