Common stamps come in two varieties: used and mint. Letís discuss each separately.
Used stamps, sold individually, have a catalog value of 20Ę. The Scott catalog is about to increase that to 25Ę. Here is where I think many people are misinformed. Many people believe that 20Ę or 25Ę is the price of the stamp. It is not. The catalog value reflects the cost of labor to handle that one stamp.
Honestly, common used stamps are worth almost nothing. Why? As a dealer, I have millions of used stamps in my stock already. Adding another couple hundred or a few thousand does nothing for me. It will be decades or centuries until I sell that many used stamps. More correctly, Iíll be dead before I sell that many used stamps. My great-great-great grandchildren will be trying to peddle these common, used stamps, assuming the philatelic bug lasts that long in my family line.
When you buy a single, used stamp that is very common, youíre not paying for the stamp. The stamp has almost no value because there are so many of them. What you are paying for is the labor involved for a dealer to put a stamp in his stock, remove it, and put it in an order to you. That takes time and time is money. If a dealer could process 100 used stamps per hour, this means the dealer is getting $20/hour to fill your order. You are paying for the convenience of buying specific used stamps for your collection.
There are cheaper ways to buy common used stamps. For example, you could buy a large packet. Letís say a packet of 100 stamps costs $5. Why the price difference? The dealer is taking 100 random stamps Ė whatever he can grab Ė and throwing them in a packet for $5. The labor per packet is a little less because the dealer doesnít have to use specific stamps. The dealer can process, say, six packets per hour. Now the dealer is making $30 per hour. Itís a little less work and a little more money.
The collector may save money with packets too. Here is the catch though. When you buy a packet of 100 mixed stamps, chances are (unless youíre a brand new collector), youíre not going to need every stamp in the packet. Youíre saving $15 compared to buying the stamps individually. To get the lower price, you sacrifice by putting up with duplicates that you donít need. Maybe you can trade the duplicates to friends? However, at $5, hopefully you find 25 or more stamps that you need for your collection. Why 25? Because 25 stamps bought individually would have cost you $5 at a dealer. If you find 26 or more stamps you need, you saved money. If the packet has too many duplicates to you, youíre better offer buying specific stamps from a dealer.
Hereís another example. How many times have you gone to a show and a dealer has a big box of mixed stamps where you can pick out anything you want for a penny, nickel, or dime each? Why? Because you are the one providing the labor! Youíre digging through the box looking for the stamps you need. The dealer cut his time down to almost nothing. If youíre willing to dig for the stamps, the dealer is making a couple of bucks while you find what you need.
Thatís why when you go to sell used stamps, they are worth almost nothing to a dealer. Sure, you have 1000 used stamps with a catalog value of $200. I have millions in my stock already, so Iím not selling your copies for 20Ę each. Iíll give you very little for those used stamps and Iíll try to quickly sell them as a large lot for a low price. I am not going to sort all of those stamps, one by one, and put them into my inventory. No way!
If the used stamps you are selling are all mixed, my offer is going to be very low because Iím going to sell them as a mixture. If the used stamps you are selling are sorted by Scott number, my offer will be a little higher, but not much. Because they are sorted, now I can quickly grab 100 different stamps and put them into a packet for $5 (per my earlier example). I can make 10 packets if you have 1000 different stamps. Thatís $50 in sales. If it takes me 2 hours to make those 10 packets, my offer to you may be $5. I have $50 in sales, but I have $5 in stamps, another couple bucks for the envelopes used to make the packets, and 2 hours of my time to make the packets. If Iím lucky and sell the packets really quick, Iíll make $20 or $30 for my 2 hours invested in labor, after expenses.
Enough about used stamps. Mint stamps are similar, but there is always some value there.
Again, dealers tend to have hundreds of mint singles or more per Scott catalog item. Dealers may even have sheets of mint stamps. Maybe itís not a lifetime supply, but dealers will have months (maybe years) worth of mint stamps on hand. As a dealer, buying more of your mint stamps to add to my already bulging stock is not something I really want to do.
Unlike used stamps, mint stamps have some value. They can be used for postage.
Suppose you have a pane of 100 stamps that are 20Ę denomination. The face value is $20. Suppose I offer you 80% of face. Iím buying your pane of stamps for $16. If I sell it for 90% of face, Iím making $2. If I use the pane of stamps myself for mailing out orders, Iím saving $4 in postage.
Sometimes I get comments like, ďI bought discount postage from you. You have stamps in there that you charge a lot more for on your pricelist.Ē Yes, that is true. Here is why.
I have lots of mint stamps and, again, adding more is not something Iím eager to do. Just like used stamps, part of what youíre paying for is the labor involved in selecting that single stamp.
Discount postage is a hodge-podge of whatever I have. I can usually accommodate general requests such as ďCan you send me low denomination stamps like 3, 4, and 5 cent issues?Ē Or requests like, ďCan you give me configurations that equal the first class rate?Ē Sure, Iíll do that because itís not that much more work for me.
What I canít do is accept requests for specific stamps. You canít order discount postage and say, ďI want Scott #2013, 2022, 2546 ÖĒ Sorry; that takes work. Work means money.
Discount postage is whatever I have on hand. I donít send out junk. But if I have common mint stamps that are hinged and no one wants to buy them, sure, you might get hinged stamps in what I send you. Itís being used for postage so hinging doesnít matter.
For that 20Ę stamp, you might get lucky and find something you need in discount postage and you bought it for 18Ę (90% of face). If you buy it separately, the cost is, say, 35Ę. Because 35Ę is the cost of the stamp (80% of face is 16Ę) and the labor to bring that stamp to you (20Ę, just like a used stamp). If I process 100 mint stamps an hour, Iím making $20/hour for my labor.
When I buy mint stamps as discount postage, sure, a few of the stamps may go into my stock for sale as singles if my inventory is running a little low on a particular issue. But most of it is going to be used up for postage.
When a seller sees 35Ę retail price on a stamp and then my offer is just 16Ę for that same stamp, they think Iím robbing them. No! The truth is, I already have plenty of mint singles of that stamp already. Most of the time, that stamp will be used up for postage or sold for 90% of face value. But yes, I will divert a few copies into my mint singles inventory when needed, but thatís not very often. Whatever copies I divert to my inventory will probably sit there for months or a few years. Iím not going to turn around and sell all of those mint stamps for 35Ę within days of buying them.