Well, a returning customer of mine who is very particular about condition, but who has never spent more than $90 with me before now came and made an offer of $700 on it. His offer was 50% of my initial asking price, which might seem low, but it was almost full catalogue value for a very fine NH example. He clearly wanted the stamp and was willing to pay for quality. His offer was almost double that of another fellow who offered me a mere $400 last month.
It just goes to show that waiting for the right buyer does pay off. So now, the total sales for May are just over $3,600, with $2,200 of that coming from repeat buyers - approximately 61%. What is most significant about this is that it shows how customers are developed:
1. This fellow bought from us for the first time last fall and spent something like $10 on a modern issue.
2. He was happy with this, so he bought a few more items in the $10 range over a period of 2 months or so.
3. After 2 or 3 successful purchases he bought a 1932 coil pair for $90 or so.
4. We didn't see him again for several months, probably because we have not yet listed most of our superb early never hinged stamps, and there wasn't much that he was interested in or that he needed.
5. Now he has returned and spent $700 on this stamp.
From $10 to $700. It happens by servicing the customer well, and providing a level of quality consistent with their expectations at a price the customer feels gives them value. In every transaction this customer was in control of the price. He was generally willing to pay very close to full asking as he wants superb stamps. In this instance, he negotiated, but only because my asking price was so far above the catalogue value. I suspect that if I'd had it priced at $720, which is what a VFNH example lists for, he would have just bought it.
In the end this is a better business model in my opinion because it results in ensuring that the merchandise goes to those who appreciate it most. This fellow I can tell will treasure this stamp. The fellow who offered me $400 last month, sees this stamp as a mere commodity in his portfolio of valuable stamps. I would rather sell to someone who I know will appreciate the stamps and their rarity than someone who doesn't appreciate these things.
what are your margins like?
ReplyDeleteare they higher or lower on the 'expensive' stamps?
and what's the significance of your company's name?
They are very good. I would rather not say how much, but they are well over 100% usually. For example this stamp came from a block of 4 which was purchased for $550. It was the nicest stamp in the block, but after selling this for $700. There are still 3 other very nice stamps left to sell - after making 27% margin on the overall purchase with this one stamp.
DeleteThey are generally lower on the more expensive stamps as can be expected, but are still excellent.
I chose my company name over 15 years ago - well before I started my company. I wanted a nice two syllable name that could be built into a brand. Most stamp businesses either contain the owner's name or the word stamp and I didn't want either. In a similar vein to the way Warren Buffet's company is not called Buffet Investments or Buffet Enterprises, but is called Berkshire Hathaway.
Not that I am claiming to be on the same level as Warren Buffet, mind you.
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