Master Guide to Buying Postage Stamps from Ebay

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Introduction to Stamp Collecting on Ebay
Hi all the following paragraphs are ideas I have formed over the last few years while buying stamps on Ebay. I hope this guide will help people out as they enter into stamp collecting in general and as they use Ebay, because lets face it, stamp collecting is now mostly done on Ebay. 

First things first, stamp collecting is actually one of the most competitive past times I have ever encountered- and that's including sports! This is  simply due to the fact that big money can be made by knowing more about a stamp than the other guy. People make a living out of buying off Ebay and selling to collectors they know either through clubs or to a client of their proper business.

Unfortunately this means that as you get deeper into the hobby fewer and fewer people are willing to help you out. Knowledge is power and in a competitive market where peoples' livelihoods are at stake, why should they pass on this knowledge and loose their advantage ? 

Sniping Method of Buying Stamps
One way around this is to form a specialty quite early on in your time at stamp collecting. This way you will know when something good pops up on Ebay that others might miss. You can exert your advantage and more often than not score some bargains buy snipping the bid or buying it now when newly listed.

I have previously talked about 'buy now' but snipping a bid is essential in all sales by auction. Take your knowledge about an issue and decide what you are willing to pay for it, next enter this amount at the five seconds to go mark of the auction to ensure you do not over pay due to pride or overpay due to the seller having a false account bumping up the bid.   

In the last few months I have had sellers do this to me. They create a private profile where you cannot see the buyer rating, (sometimes you can see it and it is zero), then they bump up the bid on items with no reserve, baiting buyers into paying more than they would like. Snipping circumvents this because you are not baited and pay exactly what you thought it was worth- as your specialty you have the best idea what it is worth not the seller and not the casual bidder. The most recent case of this was was for a stamp cover that I was willing to pay around 20% more  than what the account had bumped the auction up to, but because I snipped I got it for much less than what I was willing to pay.

Great Deals Go "Missing" in the Post
OK so you have just bought something from Ebay and you know you got it for way way less than what you know its worth. This makes the final transaction processes a little dubious and a dishonest seller has the potential to take advantage of you.

At the beginning of this year I purchased about $400 worth of stamps (the rate that these have been sold on average on Ebay recently) for about $75. The seller has a shop on Ebay and sells a lot of other nick nacks and antiques too so they did not have a great customer base of stamp collectors. I paid for standard parcel post of about $5 which is what the seller and buyer normally agrees to for a purchase under $100. The parcel was sent domestic so after one month passed with no delivery I became worried and so I emailed the seller. The response I got was very interesting because the way he acted and communicated was  suspiciously dismissive. He was more than willing to refund my $75 no questions asked no explanation needed and he did not appear surprised that it was lost in the mail for some reason. 

There is no way I can prove that he intentionally did not send the parcel but this is my feeling on the matter. The deal I received for the stamps surprised me greatly and I was rubbing my hands together with glee so I can only imagine how the seller felt. Since then any purchase I make that is an extremely good deal I request registered post even I  paid $20 for an item. The loss of the stamp "in the post" is a far worse circumstance than paying registered postage. 

Investing in Stamps
So I have written a lot about how to use Ebay to buy stamps in this guide and others but not a lot about what you should buy. 

In my opinion stamp collecting is in kind of a slump period at the moment. Collecting was huge in the 1970s and 1980s as per all the collected entire sheets of stamps, first day covers, stationary, yearbooks and more. 

I read somewhere that there was a bust period in the 1990s when people suddenly realised that their stamps were in fact extremely common and anyone who would want to buy them already had multiple copies and sheets of that issue already, greatly devaluing their stamps to 60%-70% of face value. I think because there are fewer collectors per population now than there was back then, these stamps are still valued at the same rate 60%-70% of face value. The kicker is that since then inflation has been increasing in Australia at a rate of about 3% on average each year. 

The average wage for an Australian in 1977 was about $10 000 per year so it follows that 10000/50/5/8 =$5 per hour (probably not correct at all but you get the ball park figure). 

Some of these people were buying $10 face value stamps at this point. Now they are only worth about $5 if you are lucky enough to sell it for that in today's market. 

$10/$200 * %100= 5% of their weekly earnings

$5/$850 * %100= 0.6% of weekly earning
Approximated Loss in Value
1- (0.6/5)* 100% = 88%

Therefore we say that stamps of the 1970s and 1980s are at about 60%-%70 face value when in actual real money terms they are at about 12% of there previous face value taking in to account of inflation.  

This means that investing in stamps in the 1970s and 1980s through buying whole sheets of stamps proved to be a very bad decision. Hindsight is 20/20 and I may have done the same, but unfortunately many people did this which lead to the bust in the 1990s. The lesson we have learned from this is that demand rules all stamp valuation and demand for the 'modern issues' in the current market is terrible at best and will continue that way indefinitely. 

I've thought many times that I would like to finish my Australia collection to date, but its basically like throwing thousands of dollars down the toilet when you consider the above mentioned rationale.

In conclusion do not buy modern material if you are looking to invest. 

Stamps to Buy and Sell on Ebay
The stamps to buy are the 'medium' ticket items. Those are the individual stamps that go for between $50-$500. These ones will be easy to sell because the buyer will most likely be looking to add to their own collection, not buy an entire other collection.  The thing to remember on Ebay specifically is that it is hard to sell cheap common items the same as it is hard to sell expensive rarities. 

These mid range items I'm talking about  are more often than not Victorian era mint and used stamps, and Victorian era covers. Victorian era stamps are highly collectible for a start, they are often extremely rare, there is a finite quantity of them left in good condition, and there will always be stamp collectors in the market for these stamps.   
But there is more to stamp collecting than just being an investor. Many people will not want a small collection of one off good quality stamps. This is were the 'smart' greater collection comes in.

The Best Sellable Collection
A  good easy to sell collection   (at least one I would look to buy) might be a mainstream country collection which might be made up of fine used 1800's to WW2 stamps including the very rare stamps, from WW2 to 1990 all lightly hinged mint, and >1990 fine used (or wait 20 years to buy not hinged mint). Once this is complete I would look into buying only >$100 dollar stamps mint for the Victorian era. This way you are fulfilling your want to complete a collection whilst focusing on the stamps that you can easily sell later down the track. 

Reselling Auction stock on Ebay
Be weary of both selling on Ebay after buying from large auctions, and also buying on Ebay from these Auction goers. So either side of the coin. Remember that the Ebay market is standalone from the Auction market. There is some opportunity to be had moving stamps between markets  but most likely buying stamps at Auction then selling on Ebay will not pay off. I would think buying from Ebay and selling at Auction would be the more likely  profit scenario.  

Many Ebay business owners go to large Auctions to buy expensive lots just to try and sell them on Ebay. I don't know what percentage these people are looking to gain on Ebay but hopefully it is worth their effort, many times I don't think it is. A lot of auctions offer a particular lot with just left over material from a greater extensive collection which is the Ebay sellers prime target. Little do they know that they are left over material for a reason. Many stamps will have faults, be faked, forged, trimmed and so forth. Collectors on Ebay have a world wide selection of stamps to choose from, faulty stamps will not sell well at all unless appropriately priced. So considering all this, an Ebay seller needs to compete with collectors on auction day to buy the lot at an extremely good price to have any chance selling on Ebay. A very hard ask. 

There is a man selling New South Wales stamps on Ebay who has probably done this. They went to an Auction, purchased the left-over material and he is now trying to sell it on Ebay. Well it is mostly trash. Most of the supposed better quality ones are faked and have their perforations trimmed. The rest are way, way over priced for the Ebay market and will probably never sell. This man has gambled on auction day and probably lost thousands in the process considering he is asking for $1000s total over the sum of his lots. When you become a specialist it is very easy to pick out the weeds and I know for a fact most of his lots are.

I know that there is opportunity to buy off Ebay and sell to collectors not on Ebay. Because Ebay prices are 'truer' and quoting catalog value to a collector will invariably equate to profit. But I am fairly sure the collectors with their finger not on the pulse are not in the market to purchase very expensive stamps anyway. So either way this approach would be difficult too.

Buying off Ebay to sell on Ebay
The best practice is to assume that what you bought something off Ebay for is its price everywhere. Hence don't expect to snipe a bid and then try and resell later on Ebay to make a profit because if you won it via auction its most likely worth what you paid for it. 

For example I recently emailed a well established Ebay seller when I saw he was selling the same cover that I saw sell the week prior. Turns out the man thought the cover was under valued when he bought it for $100 and he was planning to resell it on his account with the hope that his client base would help him turn a profit. As the auction had a few days left to go I emailed him and told him I thought $100 was a more than fair price based on my specialist knowledge. Anyway the cover ended up selling for $50 an instant 50% loss. This is because it may have been only he and one other bidder boosting the price to $100.  

Stamp Albums
Hingeless stamp albums for Australia from 1913 to 2014 are about $1000 to buy from any major album producer. But when people sell their collection they cannot factor in this cost because otherwise their collection will not be competitive and wont sell. That's already $1000s of dollars written off from such a collection. I have been using computer generated stamp album pages offered online for a small yearly subscription fee at www. stampalbums .com.  You can print your own albums and either hinge or mount your stamps in place. Furthermore I have bought a fair few hingeless albums that had lightly hinged mint put in them anyway. I think people might be afraid to hinge stamps these days for fear of ruining them, but stamps have been hinged in collections since the beginning. In my opinion they present the stamp better than glossy mounts anyway. I put my pages into binders that come with a dust jacket and clear sleeves or not-  the stamps are fully protected even having been hinged. 

Buying specialist modern items
I have seen many modern Australia stamp collections all mint with the full range of blocks, strips, sheets, gutters, booklets, FDC, stationary etc not sell because these extras are not mainstream and not everyone collects all the extra bits and pieces sold by the post office. These collections don't even sell at 50% of face value and will never appreciate in value for its life time.

So there you have it. I will probably add more paragraphs later down the track. My other guides also have relevant information for buying from Ebay, but are probably not as articulate as this guide. I was pretty frustrated when I wrote the postage guide so hopefully it comes off just the write amount of preachy without rambling on too much. I hope these tips will help everyone form a great stamp collection that can easily be resold when the time comes.  Happy hunting everyone!   
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