Monday, 24 April 2017

I Muse...On Premiums

Purchasing a sheet or a part-sheet of your favourite stamp can make a excellent addition to your collection. But what price does one pay for such an item? Should there be a premium paid on a sheet or part-sheet of stamps? And if so, what premium percentage is reasonable to ask for, and for that matter, to pay?

The other day while partaking of my daily ebay and Delcampe search for bargains, I spotted this stunning part-sheet of the France 1936 SG 526a Normandie issue on Delcampe. When I spotted the price it made me think - what is this worth? So I thought it might be fun to churn some numbers and consider potential prices...

So just what should one realistically expect to pay for such a lovely piece? Do we simply tally the numbers of stamps in the sheet - in this case 25 - and then multiply it by the current catalogue value, £80? Or do we pay a premium on top of this? Time for some maths.

Let's work out pure catalogue value first:
  • 25 (stamps) x £80 = £625 
So is £625 what I should reasonably expect to pay? Or do we add more to this value because: 
  1. It is on a sheet.
  2. The sheet includes the printing date.
  3. Because it is a rare stamp (certainly more rare than its 1935 counterpart SG 526).
If yes to any or all of those options, how does one attach a price to such arbitrary and somewhat biased parameters? Ten percent? Twenty percent? Perhaps as high as fifty percent? Here are some numbers to consider:
  • £625 + 10% premium = £687.50
  • £625 + 20% premium = £750.00
  • £625 + 30% premium = £812.50
  • £625 + 50% premium = £935.50
For myself, I wouldn't go any higher than a 50% premium, and I feel like that is maybe pushing it. To consider the price of the above example, there are creases in the borders which would have to reduce the value a bit. Perhaps now a premium of 30-40%. The centring seems good, so no reduction there. And according to the description there are no hinge marks to be found. Purely for argument's sake, I'll choose 30%. This gives us a rough price of £812.50. A good price? 

Well, before we answer that, let's consider the item's actual minimum bid. What do you think it is? Surely it would be below catalogue value in order to promote a bidding war. Let's say £500-550. Reasonable? Perhaps. But in this case, WAY off the mark. The minimum bid for this item is a staggering £1522!!

This is a massive 240% premium!! Now, I know that people can choose whatever prices they like for their goods, but in this case is the price simply outrageous or am I missing something in the calculation? What do you think? Is a 240% premium reasonable to ask for a stamp of this era? Would you pay such an amount?

Until next time...

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