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Tuesday, January 9, 2018

Sales in December 2017 Surpass $6,400 and The Importance of Vision In Business

It has been a while since I posted - over a whole month! My GoFundMe campaign was a complete flop, raising absolutely nothing. But then again, I was too busy working to spend any time promoting it. My efforts over the past six months to develop the Brixton-Chrome brand have continued to pay off big time, resulting in sales for December 2016 of $6,589, making this one of my best months ever. This brought total sales for 2017 to $63,234, up from $37,593 in 2016. That represents year over year growth of $25,641, which in percentage terms is 68%! That is a fantastic growth percentage, and my prediction is that this will only continue to improve as this year progresses. We are only 9 days into January, and sales for January are off to a fantastic start at $1,500.

All of this is due to one very important thing: my vision, which I have never abandoned, and which has been the driver of everything in my business. I want to take some time now to share my thoughts about why a clear vision is so important, what having one can do for your business and how you go about developing your vision.

What Is My Vision?

My vision is simply to provide the best selection of stamps and service to collectors of Canadian stamps and postal history. Initially, that vision included British West Africa as well, but as I began to realize that Canada involved more than enough scope to fully occupy all of my resources, I narrowed it to just Canada.

When I say the "best" I mean several things:

  1. The most consistent grading and descriptions on the internet.
  2. The most accurately described material on the internet.
  3. The most extensive overall selection of Canada.
  4. The most in-depth selection of Canadian stamps overall, of any online dealer.
  5. To be a trusted resource for Canadian philatelic knowledge.
  6. To provide a way for collectors to sell their unwanted stamps when they are ready to sell.
Notice how, "be the least expensive dealer" is NOT on the list. I am aiming my business model at collectors who fall into one of two groups:

  • Collectors who are generalists, who are looking for individually priced, less expensive stamps, but who nonetheless want them in top quality and are willing to pay a little more to get the exact stamp they want, when they want it.
  • Specialists who are looking for very specific paper, shade, perforation, gum and fluorescence varieties, and who want to be able to buy them individually and rest assured that what they are getting is exactly what they want.
In both cases, it is the convenience of being able to buy exactly what is needed, the peace of mind that comes with knowing they won't be disappointed with the quality, and the knowledge that they when they shop with me they will be looking at the most in-depth selection of stamps, when the country is taken as a whole, that rules the roost here. My business model recognizes that collectors can buy stamps in bulk lots, at auction, for much less than I am charging, and it also recognizes that many of my competitors will sell specific stamps for much less than me. That is completely fine, because my target collector will still reach a point in their collecting where buying more bulk lots will not significantly improve their collection, and it is better to just buy specific stamps, or they will tire of hunting around and going to 10 different dealers to find what they want. 

The last two elements of my vision however, involve the creation of value for collectors which other dealers are not offering: namely a way to get more for their stamps when the time comes to sell, and a way to get easy access to in-depth information about Canadian stamps online. 

It is a simple vision, but one which focuses on value creation, and for which price is not the primary differentiating factor. That is very important for reasons that I will save for another post. 

How My Vision Developed

My vision developed over a 30 year period, as I experienced various frustrations in dealing with stamp dealers, as a collector. Some of my pet peeves were:

1. Not being able to find an in-depth selection of the stamps I was interested in.
2. Receiving stamps that were not as described when I ordered through the mail.
3. Being forced to buy complete sets when I already had part of a set.
4. Dealers offering sets in mixed quality so that I would have to buy several sets if I wanted a shot at putting together a superbly centered set.
5. Not being able to buy some stamps individually unless they were over a certain dollar amount in the catalogue.
6. Not having any way to sell my duplicates without having to sell them all at once, at a deep discount from catalogue value.
7. Not having any online access to in-depth information about the stamps I was interested to help further my collecting interest.

In each case, I often thought "What I would give to find a dealer who would...". I was a budget conscious collector, but I was never fanatical about obtaining the lowest price. I approached my hobby in a very holistic way, with the assumption that over time, my purchases would average out: some would be bargains, and others would be more expensive.

Now, I assumed that there would be enough other collectors out there, just like me, who would have similar pet peeves, and who would be willing to pay to deal with someone who addressed most or all of them. However, what is critical in business, and a step that most unsuccessful businesses fail to take is to test this kind of assumption before they go all in and invest all their resources.

What I did, is I started an e-bay store in 2010 dealing in superb classic stamps from around the world issued before 1870. It bombed. After six months, I had only 1 or 2 sales. In hindsight, it probably would have done OK, if I had stuck with it, although I will say that lack of inventory was one problem that a business like that would have had, as superb pre-1870 stamps are very hard to come by. But I decided to try my hand at opening a second store, this time dealing in Canada. I started it with about $10,000 worth of 1920's and 1930's mint stamps that I had from my personal collection. Instantly, I saw some success, with sales in my first week. I realized I was on to something , and I closed the other classics store to focus on the Canadian store.

But I did not go full time. I kept my job in public accounting for another 5 years. During that time, I worked on the store when I could and I experimented with listing different issues, to different levels of detail to see what would sell. I found that nearly every period would sell eventually and that customers liked my style and that although fewer customers were willing to pay my prices as compared to my competitors, there were enough customers to justify expanding the business to a full time operation. However, when I made that decision, I had not yet started my blog. I was not yet writing letters to customers and engaging them with each order, and I was not accepting consignments. Also, my online presence was limited to only about 700 items - 10% of what I have listed now. So, in a nutshell, I had really only addressed pet peeves 2-5 when I made the decision to become full time.

How My Vision Has Shaped My Business

The great thing about having a vision like this is that it has provided an excellent framework with which to make decisions about the business. With each decision or activity, I ask myself "Does doing this contribute to addressing one of those pet peeves or does it contribute to the achievement of my vision?". If the answer is "yes" then I take the action. If it doesn't. then I don't.

One of the problems with being a stamp dealer, is the temptation to spread oneself too thin and to become a schlepper, by pursuing every possible avenue for profit. This is particularly acute in the early stages of the business when sales are not enough to pay the bills. It is very, very easy to buy a collection that is not within my chosen area, or to broaden out and start dealing in other countries because there are so many opportunities to make a profit. It is also very, very easy to focus on cutting prices to increase sales.

But if I go back to my vision and remember that one element of my vision is to maintain the best overall stock of Canada, so that when a customer is looking for a specific stamp to buy, I actually have it to sell, it becomes easy to see why a low price strategy is not in my best long-term interest. The reason is because the stamps will sell too quickly and it will be next to impossible for me to maintain a comprehensive stock. I will be doing far too much work for too little. Similarly, branching out into other areas or offering one-off lots that do not contribute to building a stock that I can sell from over the long term simply wastes time that I could be spending to build my long term sales infrastructure.

Each action that I have taken, or every major decision that I have made stems from some element of my vision:

1. The decision to offer items in the smallest possible unit, to give customers maximum flexibility when they buy.
2. The decision to use a numeric grading system.
3. The decision to scan both sides of every stamp issued before 1952.
4. The decision to write and maintain the blog, and post one-in depth article to it per week.
5. The decision to accept consignments from customers.
6. The decision to describe all varieties, whether of not they are listed in Unitrade.
7. The decision to engage customers by ensuring that they receive a personalized letter with every order that changes as the relationship develops.

How My Business Has Benefited From The Vision

I am now 2.5 years into my full time business venture. I am still probably 2 full years away from having all my inventory listed and probably another 5-10 years away from having what I would call a comprehensive inventory of every single Canadian issue. However, as of now, I do have one of the largest on-line inventories overall. Sure, many of my competitors have a vastly larger stock of some issues than I do. However, very few have a larger stock in every area compared to me, and none of them publish a blog or accept consignments on a retail basis.

So even though I am still a long way from where I want to be, I have been able to build a loyal customer following that is growing every single month. What I am noticing is that more and more of my new customers are becoming repeat customers, and more and more of these customers are spending larger and larger amounts. In addition, there are a significant number of instances where I am getting full price for my items. So clearly, price is not the deciding factor to a significant number of collectors.

I am now in a position where I can continue to systematically execute my long-term vision, creating a business that actually has some resale value, as a going concern. Without that vision, I might have been able to make a living, but I wouldn't have been able to build a business that I could actually sell beyond the value of the inventory. It is quite conceivable that I could wind up selling this one day to an auction house that is interested in opening an online retail store, or to an individual that wants to become a dealer, but does not want to have to build all the infrastructure from scratch.