Maybe a sacrilegious question....How do you go about coming up with a offer price on auctions.
In this case, it's Vance Auctions. I recently won one of their Canada auctions (my first). I paid $650 for it, and I have listed most of the older (pre 1940) stamps. The total BIN price of the combined listing, IF realized, should make me a tidy profit. When I made the bid, I just used their estimate as to an auction value. So...really a wing and a prayer. I've now got their catalog for the September auction, and am looking for my next possible purchase. Mind you...I haven't sold ONE from my $650 purchase. Lots or collections in their catalog include info on some of the pricier issues. However, if you add those, you are still we'll below their estimated total CV. So...how do you approach establishing an offer price without knowing anything about the majority of the collection or lot. I realize these might be personal trade secrets, but wondered if anyone is willing to share their methodology. Thanks
Comments
I've bought Vance lots before along with a number of others. While they are a mainly Canada focused house, they do offer other non-Canada lots that can be quite attractive. The exchange rate is to a US buyers advantage too. Not much to it for me other than to ignore the auction estimate (I equate those to the current HipValues, mostly meaningless to me) and decide to place my max bid based upon what I can evaluate on the given lot. Most auction houses will show images of only the best material from the lot and without an easy ability to view and evaluate the lot, it is difficult to properly determine what your max bid should be. I try and figure out with what I know of the lot and its description what the approximate CV might be then multiply that by 25%. That usually gets me to a max bid that I can live with because I can then price material at 50% of my estimated CV (which is usually a fair market price) and a price that tends to have items move fairly well. To me though, the most important thing is to not get into a bidding war on a lot. Pick the price, including commission, that you are willing to pay for it and let that ride. If you win it, great! If you don't, just look for the next one to try and pick off.
Experience is, however, the best teacher. You learn when you do well, and you learn when you get burned.
The best way to avoid mistakes is to study the market. If the lot you are bidding on has several key items, look here on Hipstamp and elsewhere to see how other sellers have priced those stamps. Make your bid in line with the return you want to make off the key items assuming you can match or undersell the competition. (Don’t forget to account for all fees and postage as a buyer and a reseller – Now that Biden is hiring tens of thousands of new IRS auditors you better make allowances for a hefty income tax bite as well).
I use several rules-of-thumb when buying auction lots. You will need to develop your own rules and values:
1. I always start with the assumption that a collection of stamps is worth no more than an average of x cents each MNH and x cents each hinged or used (delivered to me) then add or subtract value based on the amount of wallpaper or key stamps the lot contains. If I cannot cover my required mark-up with the key items in the lot, I do not bid.
2. I always bid less than XX% for common USA Mint stamp lots. I resell the nicely centered MNH stuff and use the rest as postage. Singles, plate blocks, PNC3s and sheets generally resell for a small percentage over face. PNC5s often do a little better.
3. I start with a base price for full red boxes of stamps stored in dealer cards. This price is higher than what I would pay for the same quantity & quality of stamps in an album or glassines because I make use of the cards and boxes.
4. I never pay more than xx cents each for lots of used PNC singles, xx for perfins or xx for pre-cancels unless something interesting jumps out at me.
5. I tend to ignore auction estimates and catalogue value and look more at quality as it relates to condition and potential resale. Why buy a bunch of stuff at 10% of catalogue if you can only resell it for 10% of catalogue? Why should you care is someone else is willing to pay more if you can't make any money with the lot?
Good luck. Remember that it is hard to be a seller/collector. I recommend that you make every future purchase as a business manager - not a stamp collector.
You have to realize that you need to make a profit. You said that you have not sold a single item yet from the lot so you have to keep that in mind. I do not know what you are trying to sell the items for since I do not know where your store is at. The common way to figure a lot is that if the items are going to sit you have to be able to mark it up at 3 times what you pay. If not you are just spinning your wheels.
I think this is the best advice. There is always a next lot. Study study study... remember reputation and business practice of the seller and be patient. Also remember that if you are going to pay up, make sure that it is a lot that will improve the customer experience in your store.... ie new material that might drive customers to pick up something that you have had around for awhile. This is an under appreciated fact.
All a bit ephemeral but that is what makes this stamp business art, not science. And that is what makes it interesting.
Bob
I like some of the online auctions that have a scan or photo of every page or stamp in a lot. The online sales don't have the buyers gouge that many public auctions have, and if I can at least seee the front of every stamp in a lot I should be able to figure out a bid, ie what is likely to sell quickly , what is on customers waantlists, and what will still be around when my great grandson takes over the business.
I looked at your store and the prices are very fair. You should be able to sell the items but it will take time. The unfortunate thing is that people need to see your items and you are a small fish in a large sea.
Try some auctions to get people to look at your store and keep on adding items to the store.