A fellow dealer wrote an article for a philatelic publication. He said that years ago, collectors had no idea what their collection was worth because there was very little information available Thanks to the Internet, there is now a ton of information out there whereby collectors can look up similar material and see what it is selling for on the open market. This gives them an idea of what they can get for their collection.
Not so fast. Itís not that straightforward.
I agree that there is more information out there. Having it available has its rewards and drawbacks though.
Robert A. Siegel Auction Galleries auctions a lot of very valuable and very rare material. They have a disclaimer on their website. In summary, if you think you have something rare to sell, get a certificate of authenticity for it and then we will talk.
Why are they doing this? For example, they sell some rare copies of Scott #5 which has a very high catalog value. This is the imperforate 1Ę Blue Franklin from the 1851 series. For every 1 million emails/letters they receive from unknowledgeable sellers who think they have a Scott #5 too, the reality is that 999,999 of them probably have Scott #7 or #9 which are much more common. The amount of time they will consume dealing with those 999,999 sellers who think they are sitting on a gold mine is not worth it to find that 1 in a million seller who actually has something rare.
With all of their auction catalogs online, yes, there is much more information out there. But this also leads to a lot more people who think they have that rare stamp worth a lot of money.
What people donít see over the Internet is why something sells as well or as poorly as it does. Let me give you a few examples.
Suppose an auction house has a rare stamp with a catalog value of $10,000. The auction lists an estimated price of $3500-$4000 given its centering and condition.
As a dealer, I may look at that lot and think the retail price is, say, $3000. To make a profit though, I canít buy it at the estimated price.
Suppose I buy it for $2500 with plans to add it to my stock. Someone out there browsing the Internet is going to see a $3500 copy that sold for $2500. That seems kind of low, but there is a reason for it. It was bought by a dealer looking to make a profit. And maybe I feel the auction house was slightly on the high side of its true value.
Here is another example.
It only takes two collectors to have a bidding war. Suppose two collectors show up at the same auction and they really want this stamp. Before you know it, it just was knocked down for $6000 Ė almost twice the estimate.
The person searching the Internet isnít going to know any of this. Suppose they have a similar copy and they see the $6000 auction listed. They submit their stamp, no one else bids on it, and I secure the stamp with my $2500 bid. The seller is going to be upset because another copy sold for $6000 and they just got robbed for $2500. That is going to be one irate seller!
There is a reason why similar stamps, in this example, could sell between $2500 and $6000. As a collector browsing around on the Internet, youíre not going to know the circumstances behind each transaction. At best, a collector knows there stamp should be worth about $2500, but it could be worth more.
Stamp auctioneers arenít going to go into detail on the sale price either. They are going to list the hammer price and that is it. Youíre probably not going to see stories that the stamp sold so well because three collectors got into a bidding war. Or that a stamp sold for less than the estimate because it was bought by a dealer.
I have other concerns too for sellers looking around on the Internet.
Is their stamp in the same condition and centering as the one they are looking at on the Internet? These are important factors that affect the price. If a stamp has faults, no matter how small, itís not likely to fetch the same price as the sound copy listed on the Internet.
Does the seller have the stamp correctly identified? This is especially true for non-collectors who inherit a collection. They are on the Robert A. Siegel website looking at that $100,000 copy of Scott #5 and not realizing that the copy in front of them is Scott #9 and worth much less.
Does the seller take quantity into consideration? For example, suppose the seller sees a plate block of Scott #1622C on a published dealer buy list for $20. They have 50 copies in the collection they just inherited. A dealer isnít going to be able to move that many plate blocks that quickly. You canít take $20 for one copy and multiply it by 50 and assume you are sitting on $1000 of plate blocks. Depending on how fast the dealer estimates that they can sell that many blocks, their offer may be for, say, $550.
Itís not just what you are selling. Itís equally important on who buys it and what price they are willing to pay. Stamps must be correctly identified and in the same relative condition and centering. Selling multiple copies at once will drive the offer down from a quoted price of a single copy, depending on how long the dealer expects to sit on the duplicates before they are able to move them.
All of the information out there on the Internet is a useful thing. However, itís only the start of the story. There are other factors to take into consideration too and some of those factors will not be evident.