Selling at Auction
Selling stamps at auction is one of the most popular ways for collectors to dispose of their stamps. There are a few different types of auctions that a collector may use.
Public Auctions are one of the biggest sectors in the stamp market. More stamp business is done through public auction sales than any other facet of the stamp market. Most of the world’s great rarities are sold via public auction. There is usually at least one public auction house in virtually every major city in this country. The larger cities, of course, have several.
Public auctions publish catalogs with photos and descriptions of each item in the sale. These catalogs are mailed or delivered to collectors throughout the world. These collectors mail, fax, phone, or use the Internet to send their bids in for a particular sale. All public auctions have a closing date. On this date, all the mail, phone, fax, and Internet bids are compiled to determine the high bid going into the public part of the auction sale. Once the floor bidders are assembled, the auctioneer announces the opening bid. Floor bidders may choose to bid or not bid at that level. If they choose not to bid, the lot is hammered down to the absentee, or mail bidder. If the floor chooses to bid, then they will compete against other floor bidders or the high mail bidder until the hinge mail bidders bid has been exceeded. Once the high mail bid is exceeded by the floor, the bidding process continues on the floor until there is only one bidder. It is at this time the lot is hammered down to the floor bidder. One can assume that emotions and the drama of the floor bidding can push hammer prices quite high.
Auction houses charge a fee for selling your stamps. This fee usually ranges in the 5-20% range depending on the collection and the selling costs. Also, many auction houses charge a buyers fee to the buyers of the stamps in their auctions. This fee usually ranges in the 5-15% range. The national standard for the most part is 10 and 10, that is to say, 10% to the seller and 10% to the buyer. These fees are what the auction houses use to cover the expenses of catalog production, mailing costs, advertising, and overhead costs.
There is another type of auction that can be a good selling avenue. Mail auctions use many of the same processes of public auctions except that there is no floor or public selling of the lots. Mail auctions have a closing date and all bids must be received by this deadline. At the time of closing, the auction house sells each lot to the highest bidder on that lot, many times at a slight increase over the second high bidder. Mail sales tend to be larger sales that contain thousands of lots. Some mail auction sales can exceed 10,000 lots. It would be difficult and time consuming to sell 10,000 lots at a public auction when the standard selling rate is about 250 lots per hour.
Mail auctions also tend to have a wider scope of material. Usually many countries are represented in each sale. The value of the material along with the quality tends to be on the lower side in comparison to public auctions. Selling stamps via mail sales can be a good way to dispose of some of your lower quality and lower value stamps. Most public auctions have minimum standards of value and quality that they will include in their sales. It is not unusual for a public auction house to have a minimum estimated value of $250 per lot. Many mail auctions can go as low as $25 per lot in their sales.
Advantages of selling at Auction:
- You will usually get higher prices for your stamps.
- The competitive atmosphere of auctions helps to yield higher prices.
- More people have an opportunity to buy your stamps.
- The market determines the value.
- Professional describes and evaluators handle your stamps.
Disadvantages of selling at Auction:
- Depending on the auction house, the selling process can extend over a long period of time, sometimes up to a year.
- Often there are lots that do not sell in the sale. These have to be dealt with in a future sale.