A few years back, there suddenly appeared very large ads in the philatelic press about this “stamp dealer” (I use that term loosely here) who was dealing in graded stamps. I never heard of the guy before and suddenly, there are his ads smacking you in the face. I advertise in the philatelic press and let me tell you, these large full page ads aren’t cheap. You have to sell a lot of stamps to pay for an ad like that.

This dealer had a website, his big splashy ads, and so forth. I thought he was kind of odd or geeky looking – almost sinister – like out of some Alfred Hitchcock movie. On the surface, this guy put up a very impressive façade. He looked and sounded professional. He was offering some graded stamps that achieved high grades (very little of his material went below an 85 and most material was 90 and higher). The prices were pretty steep in my opinion.

Where is this dealer at today? He’s nowhere to be found. His website is still active. But the content hasn’t changed in over 2 years. All of the big splashy ads have ceased. I’m sure the philatelic press misses his advertising dollars.

What happened? In my opinion, there are two things.

First is a change in the market for graded stamps. Yes, there is a market for graded stamps. However, I think the days of paying $1000 for a common stamp that catalogs at $2 just because it has a Superb 100 certificate are over. Although I still say those prices were driven up by investors and not stamp collectors. Enough about graded stamps because that isn’t my main point.

The second thing is a pattern I’ve seen several times over the years and this gentleman was not the first, nor will he be the last, to follow this pattern. The pattern is this:

A “dealer” comes out of nowhere with what seems like a ton of money. They deal in very expensive material. They place very expensive and large ads. And most collectors, like myself, are wondering, “Where did this person come from?”

To paraphrase, the ads are similar regardless of the individual. “Hi, I’m your buddy, Bob Smith. I pay the highest prices for stamps if you’re selling. And I sell at the lowest prices if you’re buying. Call me at 1-800-Got-Stamps for all of your needs.” These guys are the self-proclaimed messiah of the stamp world.

And then the bubble bursts. The market changes and they didn’t see it. Or they don’t generate enough customers and sales to keep up those full page ads. As quickly as they burst onto the scene, they are gone. Never to be heard from again.

To me, these guys are not stamp dealers, they are opportunists. Or you can use the term entrepreneurs or investors. The point is this: They see an opportunity to make money (hopefully lots of it) in stamps. So they dive in with their fancy stamps and big ads and hope to strike it rich.

What’s the moral here?

When I see big dealers come out of nowhere, I’m very skeptical. Yes, there are some dealers who have full page ads and they are very prominent. Many of those dealers are full time and they have steadily built their business over many years. They are solid, reputable dealers worthy of your business.

Most people who become stamp dealers are like me. They are small and start dealing part time in addition to holding down a day job. They build up their business over many years. A few eventually become full time dealers. Many dealers stay part time for as long as they are in business. A few don’t make it and close their doors.

As a collector, my business would go to two types of dealers. First, there are the full time dealers who have been around many years. There is a reason they’ve been around that many years. They have good material and a solid reputation. Second, I would patronize the small, everyday dealers. The small dealers are the ones just looking to make an honest dollar by turning their hobby into a part time job.

Sorry, but I’m very leery of “dealers” who come out of nowhere with large ads carrying expensive items. Many of these folks are out of business in a few years.