We have come to accept that stamp prices have been weak for some time with a general understanding that the Internet is primarily to blame. While there are other factors affecting prices, advances in technology will continue to be the driving force in philately, which it is for so many other industries. As with other affected industries, philately must embrace change through adapting evolving technologies or lose out to a new generation of dealers as well as stamp buyers. More on this, but first let’s see what the numbers are telling us.
We surveyed the market via catalog value changes because it is the only readily available information at present. While it probably understates what is happening with retail prices, it does provide meaningful insight into price direction and trends. Our measure is of stamps priced at $25 or more and issued prior to 1950. We created this universe for what it excludes, that is, the vast majority of stamps that have little chance for price appreciation and are the main interest of collectors who only buy what is cheap. What is included in our survey is a universe of some 57,000 stamps with a cumulative value of over $91 million in mint and $97 million in used stamps. These are the money stamps of interest to the well-to-do and investor type buyers, i.e. the 20% that spend 80% of the money in the philatelic industry.
To get meaningful information from this mountain of data, we parsed it into pricing cohorts that would demonstrate the performance difference of stamps based on their absolute prices. We have pointed out in previous articles that the higher the price of a stamp, the faster it appreciates. The data bears this out. We looked at a five and ten year time period in order to measure short and long term trends. We left out stamps priced above $100,000 because they trade infrequently and would only distort any meaningful conclusion. Witness the British Guiana which sold for $9.5 million thereby accounting for why the used is greater than the mint dollar amount.
The survey results below show the price appreciation over the last 5 years (2013 to 2018 Scott Catalogue) and 10 years (2008 to 2018). The table shows, for mint and for used stamps; the number of items in the survey, their cumulative dollar value, and their percentage appreciation during that time period. There is a clear pattern of increasing rates of appreciation the higher the price with the exception being for used stamps in the $50,000 to $100,000 category. Given how few items are there (72) the explanation could be as simple as that Bill Gross was selling rather than buying of late (just kidding, Bill). What is clear is that Internet sales, while becoming the dominant sales outlet in the industry over the last five years, are playing the major role in driving down the entire price level of stamps. This is great for collectors and dealers as buyers. Not so good for dealers and collectors as sellers. But dealers and collectors have some factors working in their favor to deal with this.
Dealer’s main problem is adapting technology to decrease the amount of labor readying stamps for resale and thereby improving their turnover. It is widely understood in business that when margins are eroding you need to sell more, faster to keep up. Technology is available that will allow speeding up the sales process in a variety of ways. The listing process for major sales sites is being simplified to speed up the listing and updating of inventories on multiple locations simultaneously. File images for modern mint materials will be available for those who use our standardized stamp identification protocols. Software applications exist which automates stamp pricing and will allow market pricing information to be available electronically, on demand. Even collectors will help in this process through our CollectionBuilder program which allows them to inventory their collection in order to get an idea of what it is worth. In the process they will be increasing the value of the collection by doing most of the work a dealer would otherwise have to do since it will already be digitized and market priced item by item.
To further help collectors and dealer turnover, StampFinder has developed a want list service that allows collectors to list their wants and even indicate a buy price. This allows dealers to find buyers for material that has not even been listed on the Internet. For most dealers, this is the majority of their stock which they can offer to buyers without going through their multi-dealer sales site. Even more dramatic changes are in the works which I can’t yet discuss, but stay tuned. Technology will be the salvation and revitalization of our industry.