The Washington Stamp Exchange (once known as the Washington Press) announced that it is discontinuing sales of the ArtCraft First Day Covers. It cited the increasing costs of producing these engraved cachets and the downturn in sales. Their exit ends a seventy-five year legacy of First Day Cover collecting.
Unexpected, but I’m not surprised by their decision.
They cited the rising costs of engraved cachets as part of their reason for exiting the market. In my opinion, I think that was a very minor contributing factor. They could have moved to other methods of creating cachets. However, engraved cachets are their hallmark. Changing printing methods would have reduced costs at the expense of some collectors who would not like the new product and stopped buying it.
I think the main reason for them getting out of the business was declining sales that could not cover the costs. For example, suppose that it costs $5000 to create an engraving for one cachet. I have no idea if that is a realistic cost or not, but follow me for a minute. If you sell 100,000 cacheted covers, the cost per cover is 5˘. If the cost rises to $6000 to engrave a cachet, that only increases the cost per cover by a penny to 6˘.
However, if you’re only producing, say, 1000 covers, then the cost per cover is $5 for the cachet. The cost rises to $6 per cover as the engraving cost increases. As the number of covers sold decreases, it is increasingly difficult to pass additional costs on to customers.
You get the point though. When selling large quantities, cost increases are easier to pass on to the customer. That is why I feel that the main reason they exited the business is because demand for the covers was decreasing, making it all the more difficult to pass those costs on to customers. Non-trivial increases would drive even more customers away.
I think there are two main reasons for decreasing demand for ArtCraft covers.
Computers and color printers are readily available. Some collectors have taken to creating their own cachets for FDCs. Some have created a business of their own too by offering their FDC cachets to other collectors. It’s hard for a company that needs to generate a profit to go up against an army of collectors producing their own FDCs and they are doing it for fun or at cost because profit is not a motivating factor for them.
The USPS decision of several years ago to (mostly) eliminate the use of an official First Day city and make the stamps available to all post offices on the day of issue has changed the market for First Day collectors. To some, that “elite” First Day of Issue postmark from the one and only post office that had the first stamps available to the public was gone. Now there are potentially hundreds/thousands of first day postmarks possible. Some collectors threw in the towel. In some cases, the USPS does not even have a first day ceremony for some stamp issues.
This isn’t meant to take anything away from FDC collectors. If that is what you enjoy – by all means – continue collecting and have fun. That is what the hobby is about. But the number of FDC collectors has been declining over time. Collectors just don’t seem to be as interested in that area of philately like they were in the 1950s-1970s, what I consider the heyday of FDC collecting.
ArtCraft is gone, but First Day Cover collecting will continue on.