I love to buy mystery lots and other large packages. Part of the reason I enjoy such purchases is, of course, the chance to add many new items to my collection for little cost. The big thrill, however, is the search, hoping to find a valuable item, or an unusual cancellation, or some other novelty that will add unique dimensions to my personal collection. Finding such items is almost immaterial, although success adds a zest to the activity. Frequently, the search, with its attendant anticipation, is the only true reward for digging through several pounds of cheap stamps.
When you buy stamps in quantity, however, that's what you usually get - a LOT of stamps, the majority of which are the most common stamps available, and which usually have been given the current minimum catalog value. Unfortunately, the current minimum catalog value had nothing to do with the relative scarcity of the material. The current values are derived from what the catalog manufacturers have decided is the minimum cost to a dealer to prepare that stamp for sale. That cost is calculated based on the dealer's supposed overhead, the cost of the original material, and the expenses required to sell a single, low-catalog-value stamp.
The problem comes in when you begin to understand that dealers don't sell cheap stamps one at a time. They can't afford to. It takes just as much time to sell a cheap stamp as it does to sell a more expensive one. Time is money to a stamp dealer. Let's assume it takes five minutes to prepare one stamp for sale. If the stamp dealer runs a shop, he's usually paying rent, has to cover his utilities, license fees, and taxes, and needs to earn enough profit to buy food, cover his mortgage, his car payment, and his other bills. If he sells an item for $100, his profit may be between $25 and $45. If he sells a stamp for the minimum catalog value, currently $.20, it may be all profit, but it's still only twenty cents. He has to sell a hundred of those to make the same amount of money he's made from selling one $100 item. If it takes the dealer five minutes to prepare each item for sale, he's invested five minutes into his time for the $100 item, but he's had to invest 500 minutes to sell the 100 cheap stamps. That works out to over eight hours invested in the cheap stamp, against five minutes for the more valuable one. Working that out to an hourly wage, the dealer made $200/hour for the $100 item, but only $3.12 for the cheaper, twenty-cent stamps. It isn't worth it.
