Stamp Auctions - All You Wanted to Know . . . But Didn't Know Whom to Ask
by Gilbert M. Roderick
with comments in italics by Thomas Droege. This article reprinted with
permission from the author.
Just in case you have never bid in auctions, we hope this article will be
helpful in answering some of your questions.
Are All Auctions the Same? No. Although most dealers operate
honestly, there are some with shady practices. They tend to overgrade and
mis-describe stamps, generally misleading the bidder. It is best to do
business only with those dealers who supply good references,m such as
membership in the American Stamp Dealers Association (ASDA), or the
American Philatelic Association (APS), who list a phone number and a
person who can be contacted for any questions, who list their terms plainly
and specifically (not just "Usual Auction Terms"), and who guarantee all
stamps to be as described and offer an immediate refund if the stamps are
found otherwise.
As this directory also shows, auction firms differ greatly in their specialty areas,
their terms and their methods of awarding the bid.
How Can I Benefit by Buying from Auctions? You will find that auction
buying is the least expensive way to buy stamps. You can save money
whether you are a general collector, an advanced collector, or an investor.
Except for unusual, rare, or exceptional stamps, usually you will be paying
much below retail. You will be buying from the same sources that dealers
buy from and at the same or just slightly higher prices than dealers pay.
In effect, you eliminate the dealer's mark-up.
Who Will I Be Bidding Against? You will be bidding against other
collectors, investors, dealers, and auction agents. The smart collectors
know that this is the least expensive way to buy stamps. The dealer buys
here from his stock and for his retail customers.
How do I Read an Auction Catalog? First, familiarize yourself with the
auctioneer's terms for the sale which are located in the catalog. Also read
all of the special instructions paying particular attention to the list of
abbreviation used in the descriptions. Then check the heading at the top
of each page to be sure that you are bidding on the right stamps.
Here is a sample lot:
1217 o BAHAMA #2a, weak cnr pf, o./w Fine,
pen cc (P) 900.00
This line would be interpreted as follows: Lot number 1217, a used stamp
from Bahamas, Scott catalog number 2a. It has a weak corner perforation
but is otherwise sound with the design clear of the perforations on all
sides. The cancel was made by pen. The stamp is pictured in the photo
section of the catalog. The latest Scott valuation is $900.
If there is more than one stamp in a lot and the Scott numbers are
consecutive, the number would be listed as: 704-15, meaning all the stamps
from 704 through 715 inclusive. On the other hand, a listing of 704/715
(5) means that there are five stamps in the lot including 704 and 715 plus
three others between those numbers. Sometimes the stamp denomination,
color and other information will also be listed.
How Do I Know How Much a Stamp is Worth? Read and study about
the stamps that you want in nationally published price lists such as Scott's,
Brookman's and Linn's trends. Study the dealer buy and sell ads in the
trade papers. Note the spread between these prices. Subscribe to the
prices realized from various auctions ("Stamp Auction News" provides
consolidated prices realizations). Learn what your local retail dealer
would charge for a similar stamp.
How Can I Tell in What Condition the Stamp Will Be? Check the
auctioneer's grading terms and descriptions very carefully. Not all dealers
mean the same thing when they describe a stamp as "Fine". Study the
pictures of the lots in comparison with the lot descriptions. If there are
no photos or if the catalog does not define the terms "Fine, Very Fine,
etc", be careful not to expect more than the lot descriptions actually offers.
If you are looking only for well centered stamps without faults, then do
not bid on stamp described as "sh pf o/w Fine, OG" expecting to get a
perfectly centered,never hinged stamp.
How Are Stamps Graded? The actual grading of a stamp is quite
subjective because so many factors should be taken into consideration such
as the centering, color, freshness, visible and/or hidden faults, gum
condition, type and heaviness of cancel it used, etc. We use the following
to briefly describe overall appearance.
SF Space Filler: pieces missing, very heavy cancel, etc.
Av Average: perfs cut into design, but stamp is otherwise
sound; if use, cancel is moderate to light
F Fine: all perfs clear design, but may be off center.
FVF Fine to Very Fine: design is 50% centered with the
margins on at least two sides of equal size.
VF Very Fine: design is 75% centered with three margins of
equal size and the fourth margin is not less than half the
size of the other three.
XF Extra Fine: the four margins are about equal in size.
S Superb: Perfect centering with large margins.
We describe gum as follows:
NH Never Hinged.
LH Lightly Hinged: gum shows evidence of hinging.
Hr Hinge Remnant: a piece of hinge(s) remains.
OG Original Gum: disturbed by hinging and may also have
other marks due to multiple handling and aging.
NG No Gum: none remaining, or stamp was issued without
gum originally.
RG Regummed: gum is not original.
How Do I Make a Bid? Examine the catalog and select the lots that
interest you. Decide what price you are willing to pay for each lot. Now
fill in the bid sheet with the Lot Number (not the catalog number) and
the amount of your bid. Do not bid in odd amounts that do not follow
the bidding levels given in the catalog. List your bids in numerical order
starting with the lowest lot number (this will help record your bids, it may
not be possible when entering "or" bids). Recheck your bid amounts and lot
number. You are responsible for any errors that you make. Finally,
complete all other requested information on the bid sheet and mail it to
the address on the bid sheet.
How Much Should I Bid? This will depend on such things as what you
can buy it for at various retail outlets, how scarce it is , whether you need
it to complete a set or an album page, it's condition, etc. Generally, you
should bid as high as you are willing to pay for the lot as described. Your
bid amount will be reduced if other bids are more than one level less than
yours. Note: the majority of auction and mail bid firms award the lot at
"one advance over the under bid", however, some award the lot to the highest
bidder. Check the terms carefully. Do not waste your time entering
unrealistic bids hoping to get a bargain. (some firms may note the trend
of your bidding and toss your entire bid sheet into the circular file).
Good stamps rarely go for low prices because demand for them is too
great. Stamps with faults do sell for low prices. In general, VF stamps
will realize 60-80% of Scott, with XF and Superb bringing much more.
Fine quality sell in the 30-50% range, while average can be bought at 20-
30%. Stamps with faults will realize from 10-30% depending upon the
severity of the faults and the overall appearance of the stamps.
When Should I Send In My Bids? Your bids must be received by the
auctioneer on or before the date of the sale. Send your bids well before
that date. In case of tie bids, the bidder whose bids were received first
will receive the lot. Many firms will now accept Phone and/or Fax bids.
Many will also give the opening bid if you request it by phone.
What Are Bidding Levels? These are the amounts that you should enter
on the bid sheet according to the value of the lot that you want. The
following is a sample table of bidding levels:
Bid Level Increase
$10-$30 $1.00
$30-$70 $2.00
$70-$150 $5.00
$150-$300 $10.00
$300-$500 $25.00
$500-$1000 $50.00
$1000 and up $100.00
What this means is that if you are willing to pay between $10 and $30 for
a lot, the amount you enter on a bid sheet must be multiple of $1.00. A
bid of $17.75 would be incorrect and would be lowered to $17.00.
Likewise a bid between $30 and $70 must be in even $2 amount, such as
$44, $56, etc. A bid of $31.50 or $35 would be lowered to $30 and $34.
Check the bidding levels carefully, some use a percentage method.
How Are Prices Determined? In the case of "first advance/increment over
2nd highest bid", prices are determined by the second highest bid on each
lot. If the high bid on a lot is $19 and the next highest is only $15, then
the high bidder would get the lot for only $16., just one bid increase over
the second high bid. Note, in a reserve sale, the reserve can count as a bid.
If there is only one bidder, the reserve may function as the second bid. For
example, if there is only one bid of $80 on a lot with a reserve of $50, the lot
will be awarded at the next increment over $50. Also, in many cases,
auctioneers will not award a lot at first advance over the underbid, if the
underbid is ridiculously low.
Although not as popular, there are other methods of determining the amount
to award the lot at. "High Bid" will award the lot to the highest bidder, at his
bid. Some firms use a percentage above or below the underbid or the high
bid. Some firms will split the difference between the high bid and the
underbid. Check the terms of the auction firm.
What Happens In Case of Tie Bids? If identical high bids are received
from two ore more bidders, the bidder whose bid was received first will
get the lot. This is the only advantage that one mail bidder has over
another, thus it is to your advantage to mail your bids early, especially if
you are bidding on popular items.
What Protection Do I Have if Lots Are Not As Described? If the stamps
are not as described in the catalog, return them immediately in the same
condition as you received them and your money will be refunded.
However, before you bid, read the catalog descriptions and conditions of
sale carefully, as some lots may not be returned. The descriptions may
vary from your own preconceived ideas of stamp quality. There must be
a clear discrepancy between the description and the actual stamps before
you are entitled to a refund. In the processing of thousands of stamps for
each sale, some errors are bound to occur for which we apologize, being
after all, only human. Remember, however, bidding by mail in an auction
is not an approval service.
Most firms will do everything they can to insure your satisfaction. Some will
take the attitude that "the customer is always right". If you are not satisfied,
call immediately. Although, most terms will state that the item must "not be
as described", many will rather sell the lot to the underbidder than lose a
customer.
Also in the area of "expertization", most firms are very flexible here. The key
is immediate communication. Let the auction firm know immediately that
you are having the item expertized. There is usually a period of up to 2
months for the opinion to be returned. Most firms will refund the price you
paid for the lot, plus the cost of expertization if the lot is found not to be
genuine. Some have a limit on the fee they will pay. None will pay for the
opinion if the lot is found to be genuine.
Can I Limit My Purchases? Yes. Just write on the bid sheet the
maximum that you want to spend, but please do not send in $500 worth
of bids if your maximum is only $25. Most firms also allow "or" bidding.
This allows you to bid on several similar lots, while guaranteeing that you will
not be awarded similar lots. Just indicate on the bid sheets which are "or"
bids.
Is There a Minimum Bid or Reserve On Any Lot? The auction firm may
set minimum bids. It may not be economical to list less valuable lots due
to the high cost of printing and postage. If a lot is not worth the
minimum bid to you, please do not waste your time or ours. Bids under
the minimum bid will not be recorded. The majority of lots have no
reserve. However, some owners will direct us not to sell some lots below
certain levels. This is to protect the seller from giving away stamps of
high value for unreasonable prices. In most cases, this reserve is set at or
below wholesale levels.
Why Is the Value For Some Lots an Estimate? Some lots contain
specialized items not listed in the standard catalogs or bearing no
relationship to normal catalog values. On these we have placed a fair net
value based upon our experience, expertise, and knowledge of current
market realizations, as a guide for bidding. Lots may realize more or less
than our estimates, but generally bids at less than 60% of the estimates
will seldom win since we try to be conservative.
Do You Offer Prices Realized? We feel that bidders should know what
lots are sold for and offer this service for less than the cost of compiling,
printing, and mailing. We list the actual reduced price at which each lot
was sold. This is not necessarily the highest bid amount. As a guide for
future bidding, prices realized can be quite helpful. Each firm may or may
not provide prices realized, and they can be provided in different forms. Some
will publish them with the following catalog, some will send them by mail
after the sale for a fee.
I Bid On Many Lots But Never Get Any. You are bidding too low. Bids
which are too low only waste your time and postage. You must do your
homework to be aware of current prices. Today, demand for good stamps
is high, therefore you must bid realistically. In order to be informed of
current prices, you should subscribe to stamp publications such as Linn's,
Stamp Collector, Stamps, Stamp Auction News, etc... To be successful
with your bids, you must be aware of what fair and realistic prices are.
Auction prices for sound stamps fall close to wholesale prices. However,
prices for rare stamps with high quality and demand may very often exceed
Scott catalog prices.
Is Every Lot In A Sale Sold? Unfortunately no. A few lots are
withdrawn because of inaccurate descriptions discovered after the catalogs
have been published. A few more are not sold because bidding did not
reach the reserve level. However, the majority of lots remain unsold
because nobody bid on them.
Where Do You Get Material For Your Sales? This varies, but the
majority is received on consignment from collectors and dealers. Some we
buy outright from local sources. If you have surplus stamps gathering dust
on your shelves, why not turn them into cash?
Why Should I Sell In an Auction? Auction selling offers you a relatively
quick sale at very favorable prices with the least amount of work by you.
In an auction, your material is offered to customers located all over the
US and in many foreign countries. Thus, you can generally get a better
price than a local dealer can offer you and you won't have to haggle to get
it. If a local dealer takes it on consignment, it might sit on his shelf for
months or longer before he finds the right buyer.
Gilbert M. Roderick is President of Downeast Stamps, Bangor, Maine.
