Opinions on Catalog Value

Thank you Mr. Gordon Lee, I hadn't really thought about all those minimum value stamps, but you make a great point. Those typically are more like 4-8% of list price. I don't normally purchase those, but rather trade for them, or receive in a purchased mixture or kiloware.

I don't usually buy single stamps (whether minimum value or not), and don't own many stamps that would be listed as a high value in the catalogs, but I have been getting to the point in many of my collections that there aren't as many of those minimum value stamps needed any longer so was considering switching over from purchasing kiloware to buying some of the less expensive individual stamps.

For the last few years, I have primarily been switching from country to country as I fill in all the most common stamps from various mixtures, remainder collections, or kiloware. More and more I feel the urge to go back and fill in some of the gaps.

I pay absolutely no attention to catalog value as it seems too far from reality. The only reason that I even have catalogs is to identify stamps. If I want to see how much a stamp is worth, I go on eBay and HipStamp and see what it is actually selling for. Scott may say that a stamp is worth $100 but, if it is only selling for $12-15, what is the actual value of the stamp?

By the way, the best sources of stamps are always the ones who are only interested in make a quick % of their cost. They often don't care about actual catalog value. Yeah, that's how I got 2 of my Penny Blacks in one lot for a price-averaged cost of 5¢ each. I actually called the auction house about this. They said they knew about it, but they made their profit so they are fine with it. Most dealers, on the other hand, will pull out the valuable items and hold into stock to sell at a % of catalog.

But if you can find a dealer who is happy making a flat 10-25% quick-flipping an item, you will get a good price. The classic example, auction houses. The major auction houses, feel the need, for the sake of their reputation, to keep prices up, so they tend to push catalog values really hard. I have almost never bought from the major auction houses. There should be no reason (my opinion) to do so unless you are looking for a high-end item $500+ or rare specialty item. The items I bought from major auction houses, I've returned 50% of them because of "not as described". The items I kept, I would say my dissatisfaction rate is equally as high (in all fairness, the higher price probably biases my "dissatisfaction") I prefer the medium-sized auction houses. My return rate from those is <2% and my dissatisfaction rate is probably roughly ~5%. I avoid mail-bid only auctions (personal preference).

From the other perspective, if you can find a local dealer who is willing to quick-flip your item at your asking price for 10%, you will get the money quicker and likely at a higher price than auction house. Back when I flipped items, I knew of 2 B&M dealers who could flip certain items for me. They would know of a certain collector/dealer who specialized/wanted that specific item, and would serve as intermediary for me at my asking price. I would get the money same week, because the dealer knew/trusted both buyer/seller. Those days are gone.

I've strayed from the thread topic. Sorry.

Very good point, @salmantino.

There are some catalogs that don't even list price. Their sole purpose is to list. Just like the old-fashioned library card catalogs. They listed the book and pertinent info, but didn't list the cover price of the book.

Greetings Mr. zepherusbane, and Fellow SB Boarders
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Since I do not buy (except from the Post Office) nor sell stamps I use the CV only for the purpose for giving a rough rating of the rarity of a particular stamp.
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Respectfully,

Gordon Lee

A moose once bit my sister. 
Mynd you, moose bites Kan be pretti nasti.

This is from Scott. They are making assumptions on how a dealer prices stamps to set minimum value. It was 20 cents a few years ago.    I bet ebay and bidstart account for more individual minimum value stamps than a "traditional" dealer. Scott caters to a dealer who often buy catalogs every year to price material.  Values are not revisited every year.

I have tried to track price trends for collectibles (not stamps ... a much smaller secondary market) and I can tell you that it is a nightmare and almost impossible to do without cooperation from those online services. The data is there in the systems, but it is not readily available to the public. If eBay were to start providing a service of making "prices realized" for particular categories, I would expect it to be quite expensive.

Online sales could still be considered something of a disruptive force to the classic pricing model. The fact that it is not factored into the catalog prices does not invalidate those prices. Online sellers continue to list catalog prices as a reference model, even if many of them sell at a fraction of those prices.

To be fair ... the catalogues provide considerably more information than the price/value data. They do not revalue every entry every year or even revisit every country. They might update prices for "unique" and extraordinarily rare items when they learn that they have sold at auction. They will review pricing of entire countries when they find that market factors have changed. As a very simple example: when the Berlin Wall came down, and more economic opportunity became available to more Germans, more stamp collectors hit the market. Prices that people were willing to pay for German stamps went up, and Scott re-evaluated their pricing.

The "minimum value" is a nominal value. It increases with inflation over time. I think that I mentioned that when I started collecting, it was 3 cents. Remember that the value of a dollar (or insert your currency name here) decreases over time as well. I think that the house my parents owned at that time cost about $30,000 USD. Now, if it is still standing, it would probably be selling for something like $750,000 USD. The fundamental assumption behind a minimum value is that if a stamp dealer is going to have a store and pay for rent and utilities and staff and supplies, and someone will evaluate each stamp and pick the nice copies and put them on stock sheets and price them and arrange all those books and boxes and update them and do all the stuff that goes with running a "brick and mortar" business, that there will be a minimum price that they will charge for "a stamp." It is a lot of work! I have been helping with pricing items for sale at shows that come from dealer stocks and reviewing the prices. It is a lot of work for relatively low margin. There is also a lot of financial risk involved that a stamp dealer must take up front ... he/she must acquire and maintain a stock of material that may fluctuate in value.

Back to the original question though ... "what does catalog value mean?" I see it as a baseline relative price assigned to a philatelic item. No matter how inflated collectors believe that catalog values may be, most collectors use them as a basis for relative pricing. You might be willing to buy faultless stamps at no more than 25% of catalog value, but are you also adament that they are in VF grading? In times past, the grade that Scott used was F-VF and many stamps in the marketplace are that grade, or worse. I am going through my collection right now for an inventory and I find that some of the stamps I collected would be graded as AVG or F ... not even F-VF. I was happy to find something to fill the space that was not damaged. I think that dealers at shows and bourses are selling ordinary material at a multiple of 30% or 40%, but there is also a lot of horse-trading when you are face-to-face with a dealer. If there is a stamp that you really want to complete a set, or a page in your album, or to complete your presentation for a show exhibit, you might be willing to pay full catalog value for it. If it is an exceptional example, you might even pay more than catalog value. Look at what happens in online auctions some time, when something interesting is put up for sale.

Another use of catalog prices is for valuing collections when they are donated to a charity. People are all over the place on this, but usually they use the full catalog price, including the minimum price. I am not a professional appraiser, nor a tax professional, and I make this very clear to people when I advise them on this. Tax payers are required to assess the Fair Market Value (FMV) of their donation themselves. Charities may not advise them on the prices. The IRS then provides some very basic guidelines of what FMV might be. This boils it down to a question of honesty and a risk assessment of whether you'll get audited. If you do get audited, will you be audited by an IRS agent who is also a philatelist who is cognizant of what the "values" in a Scott Catalogue really mean. Most stamp collections are not a carefully assembled collection of flawless investment-grade stamps ... which should be sent off to a professional appraiser for tax purposes. So, for an ordinary stamp collection, I have recommended that an average FMV for items that are individually priced at a value above the "minimum price" be valued at 40% of catalog value. That probably should come down, given current market conditions. Items that are at the "minimum price" and any stamps that are not priced be counted and valued at 5 cents per stamp. Again, that should probably come down. This all comes with some boilerplate language that the assumption to realize that much money for the collection would require doing all the work of an online stamp dealer: lotting, photographing, identifying and listing all the stamps online and waiting until a willing buyer who wants that item finds it. Most donors / estate executors are not going to do that. So you get this really wide "spread." One donor took her grandfather's collection to a stamp dealer and was offered $35.00 for it. If you were to calculate catalog value for everything and accept those values as FMV, it would probably catalog at well above $6,000. Using the FMV estimate metrics above, I thought that it would be reasonable to expect $1,200 if all the work were put into it to extract as much as possible