The Relationship Between Catalogue Values, Market Values and Condition
We live in exciting times philatelically speaking. In the past decade, the market for philatelic items has seen fantastic price records being set for items in extraordinary condition. This has been especially pronounced in the market for Large Queens and Admirals, where I have seen superb NH Admirals sell for hundreds of dollars each. How can this be? On the other hand one can buy mixed condition lots for as little as 10-25% of Untrade, and modern commemoratives at face value Why? With these kinds of disparities, how useful is Unitrade in determining a fair price for a stamp or cover?
The answer is very useful, provided that you understand what level of quality the catalogue price corresponds to and you possess some appreciation for the relative abundance of examples in lesser grades, or corresponding rarity of examples in higher grades.
One factor that makes this confusing to many collectors is the use of relative grading by Unitrade on issues like the First Cents Issue, or the failure of Unitrade to define grades below fine, or to price grades higher than very fine, which can lead collectors to assume that very fine represents the highest grade that there is. Unitrade has begun to include a section at the front addressing the pricing of “Gem” material, but has declined to attempt to price grades higher than VF.
What the Unitrade price for VF represents is a fair retail price for an example grading 75 or less, if a special note qualifies their definition of very fine. A fair price means that a typical example in the correct grade may sell for between about 80% and 125% of the Scott price depending on whether it falls at the lower end or the higher end of the grade, which for very fine is between 75 and 84.
Take, for example the 3 cent Jubilee #53 from the Jubilee Issue. Unitrade lists a very fine NH copy for $75. So a VF example may sell at auction for between $60 and $125 depending on where on the scale it falls.
Fine examples are much more common, so a fine example may sell for $4-5.
Very good examples are more common still, and may bring $1-2.
Grades lower than VG would sell for less than $1.
On the other hand, as the grade approaches superb, the rarity increases exponentially. If VF examples of classic Canadian stamps comprise the top 5% of all stamps in the population, extremely fine stamps may account for less than 1%, and superb for less than 0.1%. Obviously, the value can also be expected to rise exponentially as well.
Going back to the 3 cent Jubilee, Eastern Auctions sold an extremely fine example graded 95 for $170. So a truly superb example, (i.e one that objectively grades at least 95 on a scale of 0-100) is a very rare stamp indeed, and would likely sell for upwards of $200.
Is this trend in the stamp market a fad? I think not. It is merely another stage in the evolution of the hobby. This is not hard to see when you consider that in the 1850's dealers used to display stamps on a pin-up board with pins (hence the pinhole); that in the 1930's very few collectors paid attention to centering, and finally that until the late 60's very few collectors or dealers distinguished between hinged and never hinged stamps.
What about gum? Well although Unitrade prices in the classic period are for stamps with gum, this does not generally mean full gum. Most stamps issued before the Small Queen’s period are now only found with part or no gum. Generally speaking a stamp with full hinged original gum will sell for full catalogue. Stamps with part original gum (i.e. 25-75% of the gum) will sell for between 50-75% of catalogue. Unused stamps without gum tend to sell for 20-35% of catalogue unless the catalogue price is for no gum, in which case the selling price tends to hover in the 80-100% range.
So bear this in mind when you are looking at my selling prices. I use an absolute grading system, and then my prices take into account:
1. The catalogue price for an example in the specified grade.
2. The relative rarity of examples in better condition grades and the corresponding abundance of examples in lesser grades.