A couple of years ago I ran into a situation that started me thinking how a person could get into the stamp business cheaply, and make a few dollars at it right from the start. Now this isn't BIG stamp business, or even traditional stamp business, but read this article through and see what you think.
One of the many dealers' stocks I have purchased was located in a city with an old, established, though as typical, a rather defunct collector base. The city has a population of over one million. The shop was good size, not street level, and on a well traveled but not main street. This dealer did not survive his illness, and I purchased his entire stamp estate. I often see the books of the dealers I work with because I am interested in learning how it works for them.
Driving away from town I started thinking, once again, that there goes another store -- never to return. The old client base would now have to drive further away, or deal by mail. At the level of sales this dealer had, though, I guessed he had very little capital to stock properly, or else his client base was poor.
Then I thought about the plus side. The first asset I counted was an empty store, then 25 years of service, then those same clients who came to (mostly) visit. The stock had gotten very stale but still it supported the store to about $1,000 a month. There were 30 or 40 regular customers. The rent was only $200 a month. The ill dealer had the local retired stamp club president sit the store, which he did for no charge.
Before I started piecing together a 'future store,' I ran through some 'stamp philosophy' in my mind. Briefly and simply stated it goes like this: People like bits of paper with pretty pictures on them. Just like the Post Office isn't trying to sell US #1 and #2 (and local stamp stores that do are mostly going out of business), my 'new stamp store' wasn't going to sell traditional stamps either!
I mentally decided to combine the following into "NewStampStore": Rent - extremely low (or free if someone will loan you a room in his business). Salary for the 'manager' - either volunteer help, or if necessary, a share of the gross sales. Supplies - stock books, blank albums, APS topical lists, and mounts only. Advertising - minimal amount as needed. Promotions - free stamp days for the kids, two-for-one days, school give aways, etc. Stamps - non-traditional and very high mark up. Catalogs - not needed (!). Stamp knowledge - not needed (!!).
To complete the concept, as the stock aged toward 3 to 6 months, the entire stamp inventory would be removed and replaced with the stock from other stamp outlets owned by the same owner. If six stores were involved, it would be easier if they were within a 500 (or ?) mile radius of each other.
One other thing. Almost all of the stamps would be priced the same! (This idea I am still thinking about). Say 10 cents each. You all have been to stamp shows and seen the public glued to their chair for hours to spend $2 to $20 on 10 cent stamps. Traditional dealers, or those with good business sense, pull their hair at this, but it is stamp collecting too. These collectors think that before 1940 is the dark ages, and they just want to collect 'pictures.' Notice that they don't often buy old men's heads, but that they do buy dinosaurs on stamps.
What kind of stock is it that you can make money on at 10 cents a stamp?
Some time back I was involved with a deceased dealer's stock that weighed 92,000 pounds (that is right, and off paper too!). It contained hundreds of millions of stamps. They were mostly Trucial States, sand-dune places, but the cost per hundred stamps might have been one cent or so.
So what have we put together here? A known stamp location (or perhaps kiosks or carts in the malls or tables at the swap meet), an attractive, attention-getting product that costs 1/10th or 1/100th of a cent each, and sells for 10 to 100 times cost, a member of the local knitting club to baby sit the store for you, no worry about inventory control (or losses), new stock rotating through all the time, and management and marketing controlled by you from a central location. Pretty neat - "NewStampShop."
Walk through the numbers with me. Forty clients spend $5 a week on their stamps (it is really more of a rental fee for their visiting their hiding place!). Monthly sales therefore are $800. I know I have lost you already, but keep reading. Subtract rent and overhead, say $300 a month. This leaves $500. If you have to give 30% of gross sales to your clerk/manager, that subtracts another $240. Your remainder is now at $260 in this scenario.
These stamps cost you between $8 and $80. Your net therefore is $180 to $252 per month -- at this location. With six outlets your net would be $1,080 to $1,512 per month.
I'm keeping this as simple as possible and ignoring the processing and transportation costs. On the plus side you would probably develop more than 40 clients too (because I imagine that most of your old client base would fade away).
How much would it take to start you on the road to riches with this brilliant idea? You don't need depth of stamps. You need variety. I'll bet that you could stock a room with stamps and supplies for $2,000 to $4,000. In one year you could have your original capital back. Remember, if you were able to buy 10 stamps for a cent, you'd end up with a million stamps in that store.
I didn't say it would be BIG stamp business. I didn't say it would be traditional stamps. But I bet it would work. Want to hire a consultant?
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