Auctions and Pricing

I have been looking on SAN, especially Commonwealth and Canada, for some potential buys. The auction suggested bids are usually 20 or more percentage of catalog value. However, if you look on Ebay you can find what appear to be very nice stamps ( obviously there are many outliers) that sell for 10% of catalog value. Why would an auction house command a higher price? I have stamps right now for sale at less than 20% of CV that are never hinged, and (IMO) in very fine condition.
Also, can someone explain "buyer premium for me".
Thanks
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Comments

  • 32 Comments sorted by Votes Date Added
  • Overhead and there are often reserves on items such that it won't sell unless it meets or exceeds the reserve. Buyers premium is what you pay the auction house as a percent of "hammer" price. So if you win an auction at say $100 and the buyers premium is 15% (yeah right!) then your actual cost is $115 plus whatever tax and shipping costs may be
  • Buyer's premium aka the Auction House's "tip."
  • John,
    You may be looking at the suggested opening bid if you're looking at auctions that are still to take place. The most important thing you have to consider is CONDITION. And just "looks good" (particularly on The Bay), is far from an endorsement that the item is of a particular quality. And also by comparison, you may be looking at items on the Bay that are under auction, but haven't closed yet. Most of those auction see 95% of their bidding within the last 2 minutes of the sale (apparently stamp collectors are impulse buyers ><).

    With SAN, many of the auction houses there have established philatelic reputations. Their staff have looked over the items, and (while not infallible) have a more reasonable approach to value, and also market data from previous sales (not only their own but others).

    As a dealer, collector and expertizer, I have found there is a human tendency to be "star struck" in the face of some items by collectors, even when the centering is HORRIBLE! And while there are quality dealers an any platform with quality items, there are some who are better than others. It's like any retail... there are luxury brands, and there are practical brands, and there are discount brands. Same thing applies in Stamps. One of the biggest mistakes I see people make (collecting and selling) is that they quote "CV" of a stamp without considering condition. The CV for Scott is for VF (well centered) stamps WITHOUT other faults, (unless otherwise noted, like the entire series of Private Die is noted that CVs are with "usual faults" because most were attached to packaging, and subject to rough treatment by consumers, BUT if you have one that is PRISTINE, then you can command sometimes as much as 100x or more the CV for such an item.
    The same goes the opposite way though, and so many people don't know how to accurately judge "VF". Grading also, is not exclusively "centering" based either, and flaws that require examination to be seen (up to magnification of 15x) will also affect the value of a stamp. You can't see many of these flaws in just a "face" photo, or perhaps a back photo. And alterations (especially on The Bay) of stamps to make them appear more attractive are also rampant (though interestingly, most of these alterations were applied decades ago, and the items continue to fool people into buying them.) I had a beautiful 120 with great margins. But when I examined it closely, ALL 4 margins had been added to the stamp. You can't see that in a scan. You can only see it in fluid, and perhaps only with magnification as well.
    So there are so many factors at play. The dealers on SAN can't peddle crap and remain there. On The Bay, it's the wild west, and anything goes if you can find a sucker...
  • Years ago I bought stuff on eBay and I did not have a problem.
    In the last few years I bought items on eBay and it was a bunch of crap which I had to return.
    I do not buy anything on eBay any more since most of the items are complete garbage.
  • edited June 2022 0 LikesVote Down
    Rubbish! Most stamp auction sites have a small percentage of garbage, SAN and SG excepted.
  • Buyers Premium seems awful painful.
  • And his hypothetical 15% BP is low, these days. Consider, also, there is a seller's commission, and the auction house makes out like a bandit.
  • So it seems. If you assume that a fairly active auction closing price represents market value, how do you make much profit if you need to add another 15% to that? Obviously, I'm speaking as a reseller. Is it "better" to focus on unbroken collections where some value may be "hidden" until subject to deeper scrutiny? This is a tough business. Much more time consuming than I thought it would be, but I do enjoy it. Still way early in the game to determine if worth my time. But....Excelsior!
  • Trade Secret: Buying collections and breaking them up is the ONLY way to make money in this business...
    Unless you have very very very deep pockets and can hold items for decades, and even that's not a guarantee.
    Can you hit the occasional score on an item or two, yes, but if you really want to be a dealer, making descent money out of this as a primary or secondary job, it's the only way to do it in any reasonable timeframe.
  • Been looking on Kelleher....don't see collections. I must admit though, trying to navigate on SAN is a bitch for me personally.
  • Anyone ever deal with the Stamp Collection Center? If so, any bad experiences?
  • Scott is correct. I have purchased many lots, mostly worldwide but some country specific, and have done very well with most of them. A few in fact have come to me almost unchecked. I had one in which almost half were mis-identified, some to my detriment but many to my advantage. Almost all contain minimum value items but a lot are full sets so, marketable. I have a few favorite auction houses that I can rely on for quality lot descriptions (I won't share them because there is enough competition already) but one can tell fairly easily who the dependable ones are. I have almost never done very well by purchasing individual stamps or even sets. Good quality items like that often sell at a premium at auction and at private treaty sales and typically cannot resell them at any reasonable profit. Breaking down quality collections has given me anyway the best bang for the buck.
  • It all depends on what hat you're wearing at the time. I just came from an auction where I had my collector's hat on for two lots (individual stamps) and my seller's hat (well, sorta...there are a few items I'll be keeping for my collections) for a large lot that I'll be selling to offset my collection purchases.
    Buyer Premiums on auctions can be annoying and the range is anywhere from 0% (one auction house on SAN) to 20% (or higher, especially the European houses), so I simply adjust my bidding accordingly so its pretty much a wash. It seems the better-quality items are sold thru the auction houses although the HipStamp market is pretty close (not counting the psychos, the wishful thinkers, and the bums).
    John O'neil: SAN can be as simple or as complicated as you make it. I just have a free annual membership and on my home page, the current auctions are all listed at the top right. Once you click on the auction, you will see what's being sold and a link for the house's terms. You need to register with any house you want to bid with, but that's all found in the 'My SAN' link. I don't feel the need to go any deeper there. SAN offers various memberships that include trends and the like...once you get involved with those options, navigation gets a bit busier. Once you've used it for a while, it becomes second nature.
    Greg: I agree, and wouldn't give up the names of my main suppliers either LOL.
  • I can't believe it. No one will give up their sites? This confirms it.....you are all fisherman!
  • The Sixth Commandment of Fishing:

    Thou shalt not give away the secret of thy success.

    LOL!
  • Reminds me a lot my old days running around Matagorda Bay. I think the specks and reds put out an APB on me when I showed up at the boat ramp.
  • At the last stamp show I went to,
    I was making small talk with a dealer I've know for many years.
    I know that at one time he was a buyer for one of the big houses.
    When I casually asked "So where do you get all your stamps?"
    He got real quiet and wouldn't say.

    If someone were to buy my collection ninety percent of it would be junk.
    Postage at best.

    How do dealers deal with all that accumulation from over years?
    Do you sell it by the pound?
  • Although I am slightly short of begging for some Brit Commonwealth auction sites, I will admit that when I get questioned about where I caught a quite nice northern Michigan brown trout I posted on Facebook, here is my typical response......" it was on the Holy Water of the Au Sable....or wait, I have my days mixed up, it was the upper reaches of the Jordan, but, crap...that was later in the day...it was on the Manistee upper water......etc etc. So....all you closed mouth folks, you will never know where I caught several huge brown trout...in northern Michigan...on dry flies no less...in freakin daylight!!!
  • Interesting Alan....Last first, a lot of the "junk" I have gets turned into "gratis". Freebies with purchases, given to friends with kids, donated to the local stamp club for their kiddie tables at shows. That kind of thing. I even do a little "stamp club" lunch at my office on occasion where I just dump a bunch of stamps on the conference room table and folks can have whatever they like. It is really easy to accumulate a bunch of "stuff" and just as easy to get rid of it.
  • Oh, stop me. Please, somebody stop me! No! No, here it comes.....

    Behold the Fisherman! Mighty are his preparations. He rouses the household in the early morning. He conspires with scoundrals and liars, and when the day is long spent he returns, smelling of strong drink, and the truth is not in him!

    ..
  • At the start of the lock down I needed something to do.
    I had a shopping bag full of stamps that little old ladies have been giving me for thirty something years.
    I always say thank so much, then throw them in the bag.
    I soaked and sorted them. Picked one of each for myself, one of each for a friend,
    Then bagged handfuls in little bags and took them to the Goodwill.
    They were happy and thought they could sell them.
    Maybe for kids or adult art projects, or kid art projects.
  • All of the common everyday items I usually just give them away. That is about all you can do and hopefully it will make a new collector out of them.
  • I was selling on eBay for over 20 years and I was also buying. In recent times I got nothing but garbage and had to return the lots.
    I left eBay last year because of all of the junk that was being sold and since I can not use PayPal as my payment provider who I have been with since 2001 before eBay bought them.
  • There is another factor, and that is "How deep are your pockets". We crossed a threshold a few years ago that was a big milestone (and epiphany) for me. If it makes sense (seems we have consensus already) that buying collections, breaking them up, and selling them is where the most likely "profitability" lives, then just think that through the next extension. The highest cost collections have the highest value items... We used to focus on the $5k - $10k collections, but when we started to be able to focus on the $40k - $60k collections, we had a LOT less competition for these, our margin on high value stamps (those we sell for $100 or higher) went up (we do have a "secret sauce" for how we valuate a large collection just from photos of pages, and no backs), and with those upticks, having more desirable material also went up with them, which meant more sales (total items) per week. That is all the magic formula.
    Oh, the two other secret ingredients there: Knowledge and Integrity.

    So here goes. You want sources?
    Siegel Auction Networks
    Kelleher Auction House
    Smits Philately (Based in Netherlands)
    James Lee
    Hipstamp
    eBay (yes still some there, especially seek out Pete Billis PAVSTAMPS, tell him I sent you)

    You may have found that my philosophy is sharing as much stamp knowledge as possible with anyone who will listen to me. This is no different. The "Scarcity mentality of the world" is fatally flawed, mostly because no one lives forever. But also because it unnecessarily excludes others, discourages those who may otherwise contribute/buy/promote/discover something philatelically useful. This isn't limited to Stamps.

    Challenge: List your sources. Walk the talk.
  • How magnanimous of you to share your shopping list, but all of your sources (save the bottom two) are hardly the place to go for someone seeking to buy entry level lots for resale (ie someone just starting out). However, I accept your challenge, to wit:
    Sparks Auctions (and most other Canadian houses where the US dollar has strength over the Canadian dollar)
    Dutch Country Auctions
    Modern Stamps Auctions (zero buyer's premium)
    Harmer's Auctions
    Rasdale
    Yes, eBay: Noble Spirit
  • edited June 2022 1 LikesVote Down
    George, you did remind me of two others:
    Agree with Noble Spirit
    Adding in Northstamp
    I think they are selling here now as well.

    Also, John didn't explicitly state "entry level lots", and I'm suggesting, get OUT of those lots as fast as you can, as you will never "make money" at it. It's like selling cheeseburgers off your grill in the front yard vs. franchising a shop with supply chain and logos that look like yellow M's (hint hint). You have to get to economy of scale if you want to do this as a serious venture, and for those of you who say you "aren't interested in that", ask yourself why not? The risk too high? It's not... if you follow what I pointed out earlier. Does anyone here REALLY prefer to sell $500 a month spending 100+ hours with 10% margins (after all the fees and shipping, etc etc), or would you rather sell $5,000 a month spending 20+ hours at 40% margins? This is the "tipping point" I'm suggesting. Why not tell everyone how to really do it? We'd have a bunch of great sellers with great material, increasing the value of philatelic collecting, instead of driving it into the race to the bottom cesspool that The Bay and a few others have created.
  • There's a guy who calls himself Larry (I'm not convinced that's his real name) who runs a Frito Pie cart in downtown Houston at the corner of Travis and Louisiana Streets. That's his day job. His does a Door Dash gig in the evening delivering Big Macs and fries but late at night when most are asleep, he slings high quality stamps, most with good certs, from behind the old fern bar, La Carafe', down on Market Square. That is where I get most of my material and the occasional leftover Frito Pie. If you approach him, you need to know the password. It's "can I get cheese with that?"

    Just being goofy folks but I can guarantee you that it is an actual story. I do agree with George that most HS dealers don't have the wherewithal to invest tens of thousands of dollars to purchase inventory. Some certainly do but most don't. I'm guessing that John falls into that category and just looking for advice as to what are some good sources for purchasing inventory. Some of George's houses are good places to look as are a few of Scott's but don't forget to look ol' Larry up.
  • True story: I started selling with a collection I bought for $1,500.
    For the first year, I kept none of what I made from selling/buying/selling/buying, and at the end of the year I bought a collection for $27,000. That's when I really became a Dealer and not a Seller. It also was pivotal in my understanding of how to evaluate the value of a collection (the single most important thing you can do) so that no matter what the condition is when you get it in hand, you can still make money off of it. If it sells for more than your maximum valuation, let it go. This is how you are COMPETITIVE.
    Anyone can sell something cheap. It takes skill, hard work and a modicum of talent to sell value.
    Just having great sources are not what makes this a "competitive business". If you buy high and sell low, you're not going to last long. The real "business" in this business is understanding how to do just that. And there is NO auction I've ever been to (in person or virtually) where one bidder bought EVERYTHING. There have been auctions where I won nothing, and I'm fine with that because people get caught up in the "spirit" of the auction. Don't do that. Set your max, (ensure you including buyer premium, shipping, customs, etc) total cost of collection, and make all those together your max bid. You will win some, you will lose some. And so will everyone else.
  • Maybe I'll just start selling my fish. In fact, I am presently heading to the M.......wow, I almost slipped up. I'll report back on my day on the .....ahh...Mississipi.
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