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by Lloyd A. de Vries

Vol. 14 - Stamp Dealing On The Internet

It's easy to see why selling on the Internet is so popular, and affecting stamp shows: Low overhead, high traffic.

Take a table at a show, and there's a large fee for the table, whether or not you sell anything. At a major show, that can be $1,000 or more.

If the show is out of town, there are driving expenses, even if they're not cash expenditures: Wear-and-tear on your car, tolls, gasoline, and so on. If you fly, there's not only the price of the ticket, but also the cost of shipping your merchandise. You may also stay overnight, and even a fleabag hotel and fast-food cost money.

Then there's the time involved. Sure, one big sale can pay for all of the above, but how much is that per hour? (And don't forget to average it not only by the number of hours behind the table, but the time you spent preparing your stock for the show, driving to the show, and setting up at the show.)

Compare it to selling on the Internet: Maybe half a dollar per item in fees in advance, another half dollar per item if sold. It takes a few minutes to list a stamp or cover, and the "show" is as close as your personal computer. You don't even have to dress up! (You don't even have to get dressed!)

However, there are the shipping costs, which include the outer envelope. The upkeep of your computer (purchase, software, electricity, repairs) can be a factor, too. (I hear some of you snickering that you're using your computer at work, and don't have those expenses. Then please figure in the cost of looking for a new job, because many companies are becoming militant about employees' use of the Internet during work.)

In both cases, it's easy to convince yourself that you've made more money than you really did, by not figuring in your overhead.

Many collectors prefer to see the material in person before buying, especially if it's expensive. There's also impulse buying: You see a pretty stamp or cover, you pounce on it. For these transactions, the Internet is no substitute.

Where the Internet does excel, however, is in traffic. While a major stamp show might get 5,000 people attending, the potential audience on the Internet is millions.

But that figure is misleading: Not more than a tiny fraction of the Internet audience is interested in stamps, and only a fraction of that is interested in your stamps or covers. The trick, of course, is to get those people to view your listings, whether on auction sites or your own Web pages.

For most dealers, a mix of shows and Internet probably is the solution.

Where the Internet is really cutting into traditional stamp dealing isn't really at stamp shows but pricelist mailings: A single copy of a pricelist costs about 60 cents to mail, plus printing/photocopying, whether or not it makes a sale. Color photographs are easier and cheaper by far on the Web, too.

However, just as not all collectors are within range of a show at which you'll have a booth, not all collectors are on the Internet, or spending their time on the Internet looking at stamps. Again, a combination of media would seem to be the answer.

One advantage shows used to have over mail-order dealing was the acceptance of credit cards. Most banks are skittish about mail-order or telephone transactions, and would rather the merchant see the actual plastic card, either make an imprint or run it through a magnetic-strip reader, and get a signature.

That's because it's easier for a customer to cry "Fraud!" in a transaction that isn't face-to-face.

Mail-order stamp dealers who want a "merchant account" often pay higher fees than "brick-and-mortar" stores. The rules regarding customer dissatisfaction are stacked against the merchant in mail- and telephone-order transactions, too.

With the popularity of the online auction sites, the problem of how to handle mail-order payments became more acute. At least two companies, however, have leaped into the breach: PayPal (now owned by eBay) and Yahoo's competing PayDirect.

Both allow small-time dealers and even collectors just selling a few duplicates to accept payments at fairly low fees.

PayPal encourages its clients to keep a balance on hand, even offering interest on those balances. On the other hand, PayPal allows sellers to put "instant purchase" buttons and "shopping carts" (grouping purchases together, which means only one transaction fee) on their Web sites.

Just as PayPal and eBay's now-defunct Billpoint did when they were duking it out, PayPal and PayDirect sometimes push for exclusivity in your listings.

Frankly, PayPal is so dominant in this field — which is why eBay abandoned Billpoint and purchased PayPal — that I would consider using PayPal only, but I wouldn't — couldn't, really — consider it for PayDirect.

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