by Michael Generali
21st of May 2013

Many collectors keep track of the "value" of their collections, but they do not understand what exactly constitutes "value." They think of "catalog value" as the gospel truth, regardless of the condition of their stamps (despite the fact that catalogs state the condition that a stamp is "valued"). They also do not understand the difference between "catalog", "market" and "wholesale" values. They believe that they can buy at "market" and/or "wholesale" value and then sell to a dealer at "catalog" value. When a dealer doesn't offer to buy their stamps at "catalog" value, they question the dealer's integrity.

The fact is that "value" is a term that is relative to a specific point in time, namely, when a transaction takes place. The value of a stamp is subjective at best and is contingent on how much someone is willing to pay for it. Catalog values are the most inaccurate of the three. Many catalogs are published once a year. However, the values at the point of publication are out-of-date, often by a year or more, due to the lead time necessary to prepare the catalog for publication. Market values tend to  be the most accurate, being that the market value for a stamp is established when a collector buys the stamp. Wholesale values are what dealers use to purchase stamps. They can't normally buy at full market value, and they rarely can buy at catalog value since there is little to no profit for a dealer to resell at such high prices. Collectors have a tendency to refuse to pay full catalog value for their stamps, so they should not expect to receive what they themselves aren't willing to pay.

Collectors also tend to forget that stamps valued at less than $10.00 are common, and have little overall value. Yet, many sit at their desks and add up all their minimum catalog value stamps. When they get to 4,000 stamps, they think they have a quick $1,000.00 bill waiting for them, when in fact they have maybe $100 or less at best.

This lack of understanding is something during my 51 years in the hobby that I have continuously seen. This really comes to bear when, as a member of the American Philatelic Society (APS) Estate Advisory Service, I sit down with the family of a deceased APS member to discuss the collection that was left to them. The first hour is usually spent trying to explain the facts of stamp values, and trying to get them to understand that while there may be some good items in the collection, they should not expect that they have won the "lottery." We, as collectors, owe it to ourselves and others to make sure that we understand the true nature of the hobby (enjoyment) and true nature of the "value" of our collection (appreciation of those little pieces of paper). We should ensure that we impart that knowledge onto others who are joining the hobby, or to others to whom we will leave our collection.