Some time ago, I decided to enter the approval business as a way to increase my business. I offer both worldwide and US approvals. Approvals will be a 100% different customer base than what I have with my US business. Itís new territory for me. Itís exciting and a little scary too because itís a completely new business. Itís taken some time and money to build my initial stock. Iím just starting to get my first set of customers and my advertising will be hitting the press soon. But off I go.
There are many stamp dealers that offer approvals. Yes, I did my due diligence and investigated how these other approval dealers operate. I saw some things that I really like. I incorporated those ideas into my business model. I saw some things made me scratch my head. I put together their best ideas along with my own ideas to develop my business.
One thing that I noticed is that many of the smaller approval dealers (like me) offer the same kind of material. What you buy from one dealer, you can get from another dealer. For example, one dealer has 100 Romania stamps and another dealer has 100 Hungary stamps. Not identical, but very similar. And in general, these other dealers tend to offer more inexpensive material and some moderately priced material.
This pointed me in a different direction. Iím sure this isnít a new idea. However, I donít see anyone doing this in todayís market. I plan to offer some moderately priced material, but what sets me apart from the herd is that Iím also going to include some high end (read, expensive) material that others arenít carrying. One of the most valuable sets Iím offering is $150. Itís a scarce issue.
I have some inexpensive material too. Itís more for introductory purposes. The bulk of my material are things that retail for several dollars per set, or more. Many of my sets run from about $10 to $50 each.
One thing that I noticed is that customers tend to like the mint material more than used. Mint stamps are prettier and unobstructed by any cancellation. Also, collectors tend to like complete sets of stamps versus short sets. I have a few short sets in my inventory, but most of them are complete sets. Souvenir sheets are very desirable too.
Yes, I have some inexpensive used material too. However, those are mostly offered in mixed packets of stamps where the customer can pick what they want and return the rest. I have some used sets in my inventory. Most of my inventory is better mint material though.
Here is something you may not know about the stamp market. Many dealers view the stamp market in two distinct segments.
The smaller segment is called the ďinsideĒ market. These are collectors like you. They own a stamp catalog, many join one or more stamp clubs, they read philatelic publications, and so forth. Many of these collectors specialize in one or a few countries. They study stamps and enjoy identifying the catalog number of various stamps. There are disagreements about how large this segment is, but itís several hundred thousand collectors.
The ďoutsideĒ market are collectors who donít own catalogs, generally donít subscribe to philatelic to philatelic publications, and donít join stamp clubs. Not surprisingly, many of the collectors in this segment tend to collect pretty stamps, mainly topicals. They want stamps depicting Elvis, butterflies, sports, or any other of the long list of topical subjects. They donít measure perforation gauges, check for watermarks, or anything like that. They collect stamps that hold their interest. Completion isnít a concern. This market is very fluid. Many collectors will collect for a few months or years before losing interest and they stop collecting. The size of this market is a few million collectors.
Between my two stamp businesses, I have plenty of work to keep me busy. Iím looking forward to learning more about the outside market.