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Stamp auctions, or philatelic auctions, are basically just like a normal auction -- only it involves stamps. An auction is the process of buying and/or selling goods or services by means of putting them up for bid, placing and taking bids, and then selling them to the highest bidder. What you will normally see at stamp auctions are various stamps, covers, and other philatelic-related material. Stamp auctions are typically hosted by stamp dealers or professional collectibles auctioneers like Sotheby's, Christie's, and David Feldman. Click here to view registered StampWorld stamp dealers.

Stamp auctions usually allow potential buyers to view the items before it is offered up for bid, either in the auction house, in a catalogue, or both.

The highest bidder for each lot (expressed as item or items) gets the special privilege to buy. Auctions are typically divided into 2 types:

1. Mail sales -- this is where bids are accepted via mail.

2. Public sales -- this is where mail bids are combined with live bidding from people present at the auction house or those who are participating via telephone.

At Stamp Auctions, You Get to Set Your Desired Price

Stamp auctions provide the opportunity for stamp collectors and stamp dealers to set their desired prices when they buy stamps, covers or other stamp-related item. To win at a stamp auction, the price or amount a bidder declares has to be sufficiently high to surpass the bid prices of other interested potential buyers.

There are typically 3 main characters you will see in stamp auctions: the consignor or the seller, the bidder, and the auctioneer. The seller's stamp collection being put up for sale at stamp auctions is divided (broken) into lots courtesy of auctioneer, who hosts the sale. A lot might contain just a solitary stamp, or it may be multiple stamps or covers. Lots are then put up for auction to the attracted individuals who would like to bid and declare their interest by bidding.

At times, there may only be a sole bidder who is interested in a particular lot, but most of the times, there are numerous bidders simultaneously competing. Any bidder who gets to offer the highest price for the lot shall be declared the winner, and he/she is expected to agree on paying for the lot according to the declared bid price. Most stamp auctions usually do not oblige anyone (who is a bidder) to be present in person at the auction venue. Bidders are allowed to send their bid offers by mail, by telephone, by fax, or even by employing an experienced auction agent to act as their bidding representative at stamp auctions.

The Advantage of Participating at Stamp Auctions

There are actually many types of stamp auctions -- from stamp auctions held by stamp clubs wherein the bidding is absolutely pleasant and the usual price for each lot is considerably cheap, to the most prestigious and elegant public stamp auctions showcasing high-priced stamp rarities that can fetch hundreds of thousands to millions of dollars after a heated but refined bidding battle.

There are some stamp collectors who strongly believe that the process at stamp auctions is far complicated and/or they are not very familiar with how stamp auctions work in its entirety, therefore they are hesitant to participate. Truth is, any stamp collector who frequently buys stamps and stamp covers must think of learning more about stamp auctions, because oftentimes, the sales held at stamp auctions gives the avid stamp collector a special chance to acquire stamps and stamp covers at prices obviously lower than their standard retail values.

As a matter of fact, several of the usually active bidding individuals at stamp auctions are the stamp dealers, aiming to acquire stamp-related items that they will eventually sell to interested stamp collectors. Stamp auctions usually give the stamp collector a chance to acquire items at its wholesale prices that the stamp dealers themselves usually bid and pay for.

Public Stamp Auctions and Mail-Bid Stamp Auctions

Public stamp auctions, when compared with mail-bid stamp auctions, they are very much similar in many ways; however, there are actually some significant differences.

For every kind of auction sale, catalogs for the stamp auction are printed and sent to potential buyers. The stamp auction catalog shows a listing of the lots which are going to be put up for sale at the auction, usually with accompanying pictures of the items which aims to catch a buyer's attention. In the photo shown below, you will see a sample catalog featuring different stamps. Stamp collectors can receive catalogs by calling or writing to the auction host house. Unless you're already a recognized customer, you may be charged a few bucks to pay for some of the expenses of printing the catalogs and mailing them. Bigger, more elaborately detailed catalogs cost even more.

An auction house usually advertises in stamp publications like the Linn's Stamp News (the largest weekly stamp newspaper). Their ads tell you how to get their catalog. The stamp auctions catalog also features crucial information regarding bidding rules and payment methods, which is often entitled "Terms of Sale".

Most auction houses include a buyer's premium, usually 10% of the winner's bid price, so a stamp collector who plans to join the bidding has to remember that this extra 10% will be included in his/her bill. In some circumstances, the sales tax may also be charged. All of additional fees will be listed in the document of Terms of Sale. The other details shown in the Terms of Sale are: how bidders can place bids, the methods of payment, how to collect your lots, etc.

It is extremely crucial that potential bidders take the time to read and fully understand what is written in the Terms of Sale prior to participating in stamp auctions. Employees of the auction house would be happy to answer any questions you might have prior to the auction sale taking place; however, in most cases, they cannot spend all of their time explaining the whole process to you in person or over the phone. No two auction houses have the same things written in their Terms of Sale document, therefore, all interested bidders have to read and understand the terms indicated in each and every sale they plan to join in.

Every catalog comes with a bid sheet in which to guide bidders with their fax or mail bids. The interested bidder writes down their bid for every lot they would like to buy, and that amount has to be the highest that they're willing to pay in order to acquire the lot. Depending on the item's value put up for sale, the bid amount must be written in specific increments. Below is a sample chart table of bid increments set by the stamp auction house. Keep in mind that increment levels differ from any sale, from one auction house to another. The chart table displays bids which are up to $500, and it must be given in $20 increments. Thus, if is accepted if you bid $400, but if is not accepted if your bid is $387. Depending on what is listed in their document of terms of sale, the $387 bid would probably be automatically lowered to $380.

Most of the time, the stamp auctions catalog will show you a projected sale price (or a recent value based from a stamp catalog) for every lot. Interested bidders are free to bid more or less than that projected price. However, many auction houses shall reject bids they deem as unrealistically low. For example, in case you bid $10 for a stamp (that has an estimate catalog value of $5,000) with the hopes that your proposed bid would be the only one existing, you should not bother doing so. Truth is, an auctioneer who approves such as a ridiculous bid price will surely be out of business immediately because no stamp seller will rely on him to auction off his/her goods.

In case your bid is high, you might acquire the items you wanted without the need to pay for the full price of the bid you declared. Many stamp auction houses tend to award the successful bids at just 1 increment higher than the 2nd highest bid. For example, if you have bidded on a single lot is $150, and the second-highest bid turned out to be only $70, you will win the bid lot for $75 (refer to the sample chart shown earlier). However, in cases where the bidding wars are tight and close, you must be aware that the full price of your bid would be accepted in case you turn out to be the winner, and you are expected to pay the full bid amount you stated in addition to the buyer's premium.

With that said, it is very important to always check your budget whenever placing your bids. In case you aim to win all the auction sales bids you join in, understand that you must pay the full amount you have bid, and include with it the buyer's premium, and depending on the auction house, you must also pay for the sales tax.

Public stamp auctions are done at a place that is accessible to the whole public. Anyone who is interested may come, and anyone who came and registered is allowed to bid throughout the stamp auction. Below is a photo of the public auction held last June 2014 at Sotheby's. This particular stamp auction is an event considered by many philatelists as one of the most memorable stamp auctions held because of the British Guiana 1-cent black on magenta stamp, the world's rarest and most famous stamp, and it was sold for a whopping $9,480,000!

Sometimes, there would only be a small number of bidders present because most of the bids are in the form of fax or mail. Mail-bid stamp auctions usually don't have this kind of public exposure. The auction is carried out based on mail bids instead.

Another obvious difference between mail-bid stamp auctions and public stamp auctions is that potential bidders are given the chance to inspect the items first at the public auction, at specific viewing times inside the auctioneer's offices. This means that this item-viewing-before-auction privilege is not doable for mail-bid stamp auctions.

At stamp auctions, the auctioneer is someone who represents the people who sell the items (the sellers). Instead of sending fax or mail bid offers to the auctioneer (the seller's representative), several bidders prefer to get someone to represent them during public stamp auctions.

Auction agents (the buyer's representative) work for potential buyers, and they are the ones who submit bid offers in person while the auction sale is in session. They earn by charging a fee, usually they take a small percentage from the bid price of each and every lot being bought. An advantage of hiring an auction agent is that such people are very familiar with stamp auctions, making decisions and bidding to acquire items especially for you at the lowest feasible price. Auction agents may also inspect lots to be sold at public stamp auctions on their clients' behalf, and they can answer all the questions their clients might have regarding the auction or the lot in general. You can find auction agents on advertisements in stamp periodicals. Also, there are a few auction houses that feature names and contact numbers of auction agents who regularly attend their sales auctions.

Just like other types of auctions, public stamp auctions conduct various types of stamp materials for sale. Some stamp auctions specialize mainly in stamps of a single region or country, such as Asia or United States. Other stamp auctions may always feature printing errors or oddities on stamps.

Search for stamp auctions that perk up your particular interests, and ask for a catalog that you can review. When you finally find a stamp auction that offers what you are interested in, understand the things included in their terms of sale. Just exert some effort in studying a bit about stamp auctions. Add to that some careful consideration and the willingness to participate at stamp auctions, surely you will have a very good chance, in time, of becoming a bidder who is successful at stamp auctions.