It’s always compelling to read about the future of anything of interest to you because it stimulates thought and, in this age of the Internet, lots of on-line blogging and discussion. This can be amazingly productive in helping to shape the very future itself. StampFinder has undertaken an effort to change the way stamps are bought and sold in some very profound and disruptive ways in the belief that these changes will truly enhance stamp collecting and grow the hobby.
A basic assumption in our effort is that stamp selling has only embraced a fraction of the opportunities that computerization and the Internet offer the hobby. What we have today is a market place on the Internet which tries to emulate the old time business model of stamp shows where hundreds of dealers congregate in one place where collectors can come and peruse their offerings and haggle over quality and price. The Internet market instead offers thousands of websites where collectors can view hundreds of dealers’ offerings, view images of the offerings and compare prices. The haggling can still take place electronically, albeit losing some of the charm many find in the personal interaction. Still and all, this change has been a lifesaver to an industry whose death has been predicted for the last 50 years.
The industry survives on a cycle of stamp turnover driven by the death of older collectors and the buying by younger ones whose economic well being allows them to expand the scope of their collecting activity. The survival problem comes from the fact that the rate of collectors dying is greater than of new collectors joining or increased buying by existing ones. Add to this the fact that the quantity of existing stamps remains fairly static and you have an industry where available supply is increasing at a faster rate than demand. As a result, for the vast majority of stamps, their value does not increase at more than the rate of inflation, if even that. The Internet has allowed dealers to sell more and thereby, overcome a slow death spiral, but things need not be this way.
The Internet offers a huge opportunity for attracting new collectors from areas of the world where stamp collecting is practically unknown but its natural and economic appeal make it attractive. There are several constraints to this broadening of the hobby which I won’t get into here. Rather, let me take you forward a few years to see how StampFinder is changing stamp selling and buying and even how people choose to collect.
STAMP IDENTIFICATION & VALUATION
Stamp identification and valuation is, of past necessity, done via a catalog identification system. There are four systems (Scott, Michel, Yvert and Gibbons) which attempt to identify the entire universe of stamps and there are dozens of country and regional catalogs which address individual countries, regions and specialties. None of the big four systems come close to identifying the universe, in fact, they don’t even agree on which items to include. They are constrained by what I choose to call the page count problem, i.e. a broader inclusion would easily double the size of what is already an overwhelming publication. Their valuations are based on a variety of sources of which true market prices is only reflected in the pricier items traded at auction. They inflate market prices to accommodate dealers’ ability to haggle with buyers and give the appearance that a bargain is being offered.
StampFinder is breaking this catalog model with a digital catalog that offers images of all the stamps thereby making them less number dependant. In fact, the catalog operates only under existing numbering systems since its identification system is there to accommodate stamp selling and buying, not to provide detailed descriptions and histories found in the hard copy ones. The virtue of a digital catalog is that it allows collectors to buy only those catalog section they need for their specialties, be it a country or specific topics. It also allows an unlimited expansion of listings to provide in-depth coverage only now found in specialty catalogs. For example, the foreign mail stamps produced by Mexico from 1879 to 1883 are covered by fewer than two dozen listings by the big four despite huge value and rarity differences depending on the overprints on each stamp. The StampFinder catalog identifies over 2800 overprint varieties and provides pricing guidance for each.
But it is in the pricing information in the StampFinder catalog that collectors and dealers will truly benefit. While traditional catalogs are published only annually, at best, this catalog draws its pricing from stamp sales and offering data currently on the Internet and re-prices weekly and monthly based on true market information. In a world where currency values fluctuate dramatically and stamp dealing crosses national borders, such information creates country specific buying opportunities which an annual catalog cannot address.
An added feature of the StampFinder digital catalog is in providing an investment grade rating for some 65,000 classic stamps valued at $25 or more by the big four. The metrics used to provide such ratings are described in detail elsewhere herein. The attraction here is that the rating provides stamp buyers for whom investment is their primary consideration a guide for which stamps offer the best potential. For the collector who is missing more such stamps than he can ever expect to buy, it tells him which items will add the most value to his collection over time.
The Internet has been the salvation of philately or, as others believe, it has just extended its death throes. We believe in the salvation theory and hold that the industry has only scratched the surface of what can be done. Stamp dealing remains a cottage industry due to a failure to develop the tools to break out of the traditional trading model.
StampFinder has developed an identification protocol that allows the integration of all stamp offerings by all dealers into one searchable database. This allows dealers to offer their inventory on numerous multi-dealer stamp sales sites such as ours, EBay or Bidprice without special processing. But even more, our system allows them to prepare an inventory for sale and then run it against our digital catalog to provide recommended pricing based on the latest sales and wants information. This is a huge labor saving and avoids pricings which make an offering uncompetitive. In turn, such a pricing service will increase inventory turnover since it also allows for automatic re-pricing for slow moving items and allows a dealer to tag an offering with its investment grade rating. Our system also provides for dealers to access file images of lower priced stamps where condition is not an issue, but the topic of the stamp is.
It is stamp buyers who have the greatest opportunities to benefit from technology and the Internet. StampFinder has developed a variety of tools to benefit the stamp buyer, be he a collector, investor or speculator. We addressed above how our catalog will allow him better information of what is available, what it trades for and how good an investment it may be. But it is in their trading that we offer the best new benefits. Let’s begin in the search for what he wants.
StampFinder has created a want list service that takes the time out of searching multiple sites or the loss of opportunities due to not knowing what has become available before someone else. We provide a service where you indicate what they want and even indicate how much they are willing to pay, i.e. a bid price. As often as they wish, they can go to their private list and see what has come up which you previously did not see. They can also opt to receive an email when new listings they seek appear or when an upcoming auction will be offering the item. This is how a true market place operates, but it is missing today.
Another feature being offered collectors is the ability to list their collections on our site either in detail or by album pages. An album page listing will, for example, allow heirs to a collection to offer it to any buyer worldwide. It can also be shown, at the collectors’ option for an appraisal in order to evaluate offerings. This is particularly valuable to heirs who have no idea what to accept as a fair price. But it is in the listing by a collector of his collection in detail with images of key items that offers the greatest value for eventual resale. A properly described collection can save a dealer hundreds of hours of labor in preparing it for resale. Such a collection can also be better evaluated for the value of the items the dealer knows are quickly saleable. All this translates into a higher offering price for the collection.
The above brief overview demonstrates how much change is coming to philately. Not addressed is how those changes can affect the audience of participants or how stamps can be used for other commercial purposes. I know from my columns on stamp investing that stamps serve as a legitimate investment diversification for wealthy individuals, especially with the economic and currency uncertainties we see today. A transparent stamp market will also attract speculators and those desiring to use stamps as an underground currency for hiding wealth or for transactions into or out of nations with repressive governments or where banking systems don’t allow free foreign exchange access. Certainly some of what is going on can be branded as illegal, but then, illegal activities always find a conduit.