Stamp market commentary
Commentary No. 19 - 17 March, 2001
An Introduction to Bidding at Auction
This is the first of a series articles
to be presented for the collector who
would like to learn more about this valuable
tool for building a more complete collection.
Stamp auctions have been around for a long time in Canada. Those of us who have attended an auction with the intention of purchasing philatelic material find it an exciting but sometimes terrifying experience. To sit in a crowd of 100 to 200 people, knowing that there are perhaps a dozen other people wanting "your stamp" can set your pulse racing. It's not a game for the faint of heart.
A collector can spend considerable time buying stamps through a dealer. It's interesting but not exactly nerve wracking to flip through pages of all too often off-center copies of stamps to find that little gem that attracts you. Once the stamp is found, the collector can purchase it right away. There isn't any competition. Participating in a stamp auction on the other hand means lots of competition.
There are two ways to participate in an auction. One either attends the auction at the appointed location or one sends the bids by fax or email ahead of time. Some auctions are "mail auctions" only i.e. there is no physical sale attended by a group of bidders.
When attending an auction, it is best to select which particular stamps one intends to bid on well ahead of time. One should also mark down the price range and then keep to it most carefully. Otherwise, there is a natural tendency in the excitement of the moment to bid an unreasonably high figure. One must keep in mind that some collectors, or their representatives, have deep pockets and do not care what the price is if they are determined to have a particular stamp. At some auctions, a bidder may be so determined that if he cannot attend the sale, he will participate by telephone. This can be very challenging for the auctioneer who has to listen on the phone, keep his eye on the mail bids and on the floor, all at the same time.
Occasionally at auction there will be an opportunity to purchase a particular item at a very low price. This is something that only happens to those who attend the auction and is not available to the mail bidders. It's the "dream situation" when one can hope to make a killing. It doesn't happen very often.
Most people who participate in auctions do so through the mail by subscribing each year for the auction catalogues and prices realized reports. Some auction houses produce catalogues that are works of art. There are only a selected number of lots, the images are beautifully and faithfully reproduced often in full colour and the descriptions of the stamps are very complete. These catalogues are expensive to produce and the fees received only cover a portion of the auctioneer's cost of production. Other auction houses issue catalogues of lesser quality, but with a much greater number of lots and briefer descriptions. One cannot say that one type is better than the other one since each serves an important purpose.
The advanced collector will usually go for the glossy catalogue with its full descriptions and artful reproductions because he may be intending to spend a considerable amount of money and wants to be very sure what he is buying. Similarly, the owner of some valuable stamps for sale will not want to have them buried amongst a group of ordinary stamps where they may be overlooked.
The less advanced collector or the collector of modest means will have different objectives than the above. He will be looking for the less sophisticated type of auction where there is a large variety of stamps being offered. These collectors may not be particularly interested in the detailed descriptions nor in the more expensive material; they simply want quality at the least expensive price. When it comes time for them to sell their material, often it is not in the price range that the more sophisticated auction houses will want to handle. Therefore it is better for them to deal with the auction houses that handle the more popular material.
Each auction house in Canada has a certain profile. One can only learn about these profiles by either speaking to the auctioneer's staff or by reviewing a particular auction house's catalogues over a period of time. It is especially important to know these distinctions when selling one's stamps.
When selling stamps, one should listen carefully to the auctioneer's advice. But one should not allow him too much latitude. Sometimes the auctioneer will offer some of your particularly nice stamps as a group, rather than singly, because this is easier for them. From the vendor's point of view, a better price might have been achieved overall if some or all of the stamps had been "lotted" separately. This is an area where a careful discussion with the auctioneer beforehand is important.
When buying stamps, there are a number of rules one must observe which are generally set out at the front or back of the auction catalogue. Most auctioneers will allow stamps to be returned if they are not "as described". Where this is not allowed for a particular lot, the auctioneer will generally so indicate in his catalogue. This is particularly true for large bulky lots. This is a tricky area and one where a good relationship between the bidder and the auctioneer is important. Such a relationship generally only develops over time as the collector gets to know the auctioneer and vice versa.
We at Canadian Stamp Auctions will have further comments to make about the bidding process.