Achieving Harmony Between Collectors and The Philatelic Trade

Earlier this week a customer of mine and I had a rather heated disagreement over the value of some stamps he wished to sell. A number of e-mails were exchanged and he finally asked me: "how do we move forward and make the experience better for dealers and collectors?". 

I had many thoughts, and rather than write them in an e-mail, I was inspired to write a post about it.

In order to address that question, I think it is prudent to step back and take stock of the current situation facing the hobby, and then to try and explore the reasons why. Then, we can begin to answer the customer's question of how to move forward and make the experience better for collectors and dealers. 

You will notice that my picture attached to this post is the yin and yang. I have used this image because it has come to symbolize harmony, and most people recognize this. When you look at the current state of the hobby, what immediately stands out is a distinct lack of harmony between collectors and dealers, as well as the broader trade. Dealers are generally not well regarded by the collector population at large, judging from comments regularly appearing on social media. There is a very widespread perception that dealers are nothing more than middlemen who inflate the price of stamps and that collectors would be much better off without them, just buying and selling to each other. Other signs of this disharmony include:

• Dealers who are generally misanthropic and bad tempered until you spend a lot of money with them. 
• Dealers who refuse to spend any time selling modern material issued after world war 2, decrying it as "just postage" and "not worth their time". This becomes more ridiculous with the passage of time, as World War 2 ended 77 years ago. 
• A thriving discount postage trade, in which millions of older stamps are destroyed through usage each year, rather than being preserved for future collectors to study and enjoy.
• A reluctance on the part of collectors to support dealers' businesses, preferring instead to buy from one another on e-Bay, Hipstamp or from larger auction houses. This stems from a perception that dealers are not adding value. 
• A general lack of trust between collectors and sellers, to the point where everything valued over a few $100 needs a certificate, where none would be needed just 30 years ago, unless the stamp was valued at several thousand dollars. 
• A general race to the bottom, in terms of prices and general willingness to pay in accordance with the scarcity of specific stamps. Most stamps now sell for between 10 and 30% of catalogue, when sold in a completely free market, with no restrictions on competition. This fuels a vicious cycle where dealers are offering less and less for the collections they do buy and turning away many more, being unwilling to buy them at all. As this happens, collectors are willing to pay less and less, and so on. 
• A general death of retail stamp dealing in favour of auctions, almost exclusively. There are many collectors who will not buy unless it is at auction. 
• Philatelic societies that are almost exclusively focused on competitive exhibiting and spend very little resources to recruit new collectors to the hobby and offer them the guidance and mentorship they need.
• A general lack of philatelic mentorship between older and younger collectors. 
• Social media sites like Facebook, where the stamp groups have become cesspools, dominated by either know-it-alls who spend all their time showing off or knocking another collector's stamps with comments about how the stamps aren't worth much, aren't rare, aren't in good condition, etc., or by crusaders who have taken it upon themselves to police sellers on e-Bay or other sites. The atmosphere of these groups is unwelcoming to say the least, and is very off-putting to most novice collectors. 

If you look at this from 30,000 feet, it doesn't bode well for the future of the hobby, and I think most of us could agree. Many societies are slowly dying, as membership dwindles. Bricks and mortar stamp shops are a thing of the past, and retail dealers are disappearing too, and are being replaced by dealers who only sell by auction. This is fine for more expensive stamps, but if you are just trying to buy a $2 stamp to complete a set, it is hard to find a seller who carries it, especially if it is say a used stamp issued in the last 20 years.  New collectors are giving up when they find that they can't approach existing collectors for friendly guidance. The lower prices on the one hand have made a lot of stamps accessible, that were once outside the reach of many, but at the same time it has made finding specific stamps much more difficult than before. It works great if you are a generalist with no specific focus, but not so good if you are a specialist who is collecting at an intermediate to advanced level, and you are looking to add specific items to your collection. 

So, what lies at the heart of this? Why has the hobby gotten to this state, when 40 years ago there was far more harmony? Many will say it was the internet, that opened up the market, and that is true. But I think it has much more to do with the characteristics that are inherent to the Boomer generation as a whole. This isn't a criticism of the broader demographic of Boomers, but rather an observation that I've had over the many years that I have been dealing with them, both in this business, and in my former profession as a CPA. 

One defining characteristic of the Boomers is an extreme propensity for competitiveness and a desire to be "productive" at all times. This has manifested itself mostly in the pursuit of building and creating wealth. Boomers have traditionally gravitated to lucrative, brass-ring occupations, like lawyer, doctor, accountant, banker and so on, and away from low paid, but high fulfillment jobs.  If you attend any social gathering with Boomers, what are the topics of conversation? Generally things like: 

• The economy.
• Housing prices and the housing market.
• One's job and how one is progressing to the next promotion. 

All generations before and after have this propensity as well. But with the Boomers, it is dialed up to significantly higher levels. Of course there are exceptions and some Boomers are creative artistic types who have no interest in the above. But the general demographic fits this very closely. I believe that this stems from growing up in a time where they were fully provided for economically, but with parents who were incredibly hard working, and for the most part, not capable of freely discussing and dealing with their emotions. This competitive spirit stems from a deep and unfilled desire to win the approval of their parents - approval that more often than not was always there, but was not expressed openly, and never would be. 

Back when I was growing up in the 70's and early 80's it was commonly understood that if you wanted to be wealthy you had to create value. So, most businesses at that time offered a product or service, took pride in offering the best value, and charged accordingly for what they provided, to a public that was both willing and able to pay for that value. But sometime in the late 80's and 1990's the emphasis shifted away from value creation to value extraction. Companies might still produce a product, or offer a service, but it is little more than a means to an end, the end being market domination, and the ability to charge ever more, for ever less. And so, the product, in a sense is nothing more than elaborate form of bait. 

The easiest way for companies to achieve this dominance was to make everything cheap and accessible to the masses. Doing this would create consumer loyalty. At the same time, it would cheapen the experience offered by those products or services, while raising the public's expectations to the point where they would never be willing to pay the same amount for a particular level of quality than they were before. The result is a general decline in the quality of nearly everything. One example that comes to mind is air travel. When I was a child in 1982 and I flew for the first time on Qantas from Honolulu to Sydney it was an experience: everything was included from headsets to activity books and coloured pencils, to drinks whenever I was thirsty. Several meals were provided. You get the picture. Now? Air travel is an ordeal. Nothing is included, not even your bags. Well, not exactly nothing. You get a free drink and a tiny pack of crackers. 

How does all this relate to the hobby?  By the introduction of the profit motive to normal every day stamp collectors, because of a deeply rooted desire to be productive, coupled with companies like e-Bay whose mission it was to "disrupt: traditional commerce by making everything cheap, cheap cheap. 

See, dealers need to make a profit. They need it because it is how they stay in business. It's how they have the money to buy collections so as to be able to offer material to their customers. It's how they can tie up vast amounts of capital carrying inventories that will take decades to sell, so their customers can have the convenience of ordering when they want. It is how they can have the time to answer questions put to them by collectors and not be stressed out and short tempered all the time. Most of what we call "profit" to a dealer, is really just a reasonable salary available to the dealer for running the business. Most dealers don't pay themselves a salary, and so when you factor in what would be a reasonable salary for their level of expertise and skill, plus the considerable hours worked over the course of a year, there is really no profit left over to speak of, and in fact, most would be losing money if they paid themselves what they were truly worth. Seriously, if dealers can't make a living they can't help you, and while it is tempting to buy all your stamps from part time sellers, the rub comes when there are problems and the part-timer can't help you solve them. 

The problem Boomer collectors have, for the most part, is that they have a hard time enjoying the hobby for what it is, because of this need to compete and be productive. I mean really enjoying it - without having to prove anything to anyone, least of all to themselves. I mean collecting whatever they want without regard to what it will be worth, or whether it will win a gold, or whether it impresses the other collectors at their club. If they could just let go of the profit motive and get in their own lane - that of enjoying a hobby, then we would see the reversal of much of what I have mentioned above. It would take a long time, but slowly we would see prices for a lot of scarce material go up because more collectors would compete for it in auctions and more collectors would be willing to pay a professional dealer to source it for them. In turn, we would see dealers having more time for collectors, as they would not have to sell as many stamps to cover their costs, as they are having to do now. They would be more able to carry stocks and may be more agreeable to stocking lower value modern issues, and serving a much broader base of collectors than they are focused on serving now. 

As their ability to earn an honest living improves, dealers will be more willing to pay more for collections that they buy and will be willing to buy most of what is offered to them, which in turn will increase the liquidity of everyone's stamps. 

What can you as a collector do? Well, you have to decide which reality you want. Do you want the current one? Or do you want to see things improve and see the hobby continue to thrive into the next 50-100 years, even if you aren't here to benefit from it? If you want thigs to get better, you absolutely have to let go of the profit motive as a collector, and really focus on enjoying the hobby for what it is: a well deserved rest, and a getaway from the stresses of every day life. That will open up a lot of possibilities for you and very likely it will make many of you want to serve the hobby by getting involved with the philatelic societies, or just generally promoting the hobby to others. 

The next thing you can do is support those dealers who are doing it right. The dealers who are clearly trying to serve the hobby, as opposed to merely cashing in on their knowledge. The ones who are sharing their knowledge and building the hobby up. They need your help, because doing things right is not profitable in the short run. In fact, it is very expensive. The most challenging aspect to being a full time dealer is generating enough revenue to pay the ongoing expenses of the business, and getting the business to that point before their money runs out. Most banks will NOT lend to stamp dealers because they don't understand this business, which is really just a very fancy way of saying that they don't see it as a real business. So, don't succumb to the bystander effect, where you assume that some other collector will give that dealer business. If the dealer can help you in some way, give them the opportunity to earn your business, because they need it to be able to keep doing the good deeds for the benefit of the broader hobby. Conversely, don't reward the dealers who are damaging the hobby, and its not too difficult to figure out who they are. Be conscious of where your money is going and ask yourself when you spend money, is it building the hobby up?

This will necessarily mean that you will likely pay slightly more over the long run, but it won't matter, because you will be getting far more general enjoyment out of your stamps than you were before. Many possibilities will open up because dealers will be able to offer material that they simply couldn't before, and will be in a position to share knowledge that they just didn't have time to share before. You will find yourself more involved with other collectors in interactions that are more positive, because you are working together and not competing with one another. 

If you can embrace the hobby, as a hobby, and then allow those whose job it is to serve the hobbyists to thrive, it will completely transform the hobby. That is what I believe.