07Nov A Word about Market Value
One thing that I've been hearing a lot about of late is market value, so I thought I'd take a moment to offer my take on how market value works in the rare book trade.
1. Markets are many and varied.
When most book collectors talk about market value, what they're actually talking about is the value of the book on the market they're familiar with. We recently had a comment from someone that a book was way above market value, yet the reality was that the book sold within 24 hours. The explanation would be that either that the buyer was willing to pay more than the book was worth or that the buyer thought the book was worth it. Of course, the latter is true, and the person commenting that the book was above market value simply meant that in their experience the book was being offered for more than the market they're familiar with would bear. That's not to say that if we had another copy we'd price it the same, it might have been that there was only one collector at present with the desire and wherewithal to pay that amount. The fact of the matter was that we had targeted a specific market with that book and its price (in fact, that market consisted of three people).
The given potential buyers for a particular book decreases as the price increases. Offer a copy of the first edition of the first Harry Potter book in fine condition for £1 and you'll have millions of buyers. Offer it for £1000 and you'll have thousands. Offer it for £10,000 and you'll have hundreds, offer it at £50,000 and you're in the tens. At £100,000 you're probably looking at fewer than a dozen buyers and it'll probably take an age to find them; at least it would take me an age! You'd be lucky to find anybody willing to pay a million - though I must state these things do occur; there are always anomalies.
Expectations also vary with the marketplace. People expect to get things cheap on eBay as they're often dealing amateurs, have limited guarantees and sometimes don't get reliable descriptions but are usually happy to pay a little more at book fairs as they get to inspect the book first and often don't want to go home empty-handed. Where a collector shops will alter their perception of market value. Someone who buys everything via eBay auctions will be under the impression that they can usually find something cheaper than what a professional seller is offering a book at. Someone who buys solely from a bookseller's catalogue will rely on the bookseller to offer reasonable prices.
Another thing we hear all the time is that certain booksellers (you know who you are!) are too expensive and have 'ridiculous' prices. Again, this just ties into the target market; if they were too expensive they wouldn't be in business any longer. The same goes for sellers who are too cheap, but nobody, myself included, complains about those!
2. Market value is related to the amount of time a book will stay on the shelves
It's easy to say that a book is only worth what someone will pay for it and that is true. We booksellers don't just consider how much we will get for the book but also how quickly. We have copies of books that are higher than most other copies on the market, usually these are exceptional copies that we think deserve a high price. On the other hand, we have books that we've acquired that we want rid of for some reason; it could be that we've bought poorly, had the book too long, don't like the book or it doesn't fit with our stock. In these cases we might price it much lower than we think it can achieve, simply to get it shifted.
3. The sensitivity of a market is related to the scarcity of the books therein.
When the discussion turns to the price of a book rather than the book itself, then it's often the case that there are enough copies having hit the market that it's quite straight-forward to judge the suitability of the price in that particular market. Of course, a book that has hit the market for the first time in fifty years still has a range of prices within which it will sell; just because it's exceedingly rare doesn't mean that it's priceless, rather the price won't be as sensitive as if the book were common. The dynamics are simple, if the collector has plenty of choice then the price will become more dominant.
4. Market value should be secondary to the opportunity
Of course, I'm a bookseller, I'm going to tell you to consider the book first and the price second, but the reality is that in some (and only some, not most) cases, one should consider the book's place in one's collection foremost. We had an example recently of a rare item, and took it to a book fair. One hadn't come to market in five years, and even then we couldn't find that record. We'd priced it at £200, which we thought was a reasonable price. A collector came along, very excited to have found the book. He asked the price, I told him, and his reply was that the market price was around £125 and took the purchase no further. There are considerations of the actual amount of money being spent and perhaps the collector had put £125 aside for this purchase, but my advice in this case is to look rather at when the opportunity will present itself next. That's not to say that if you see something that you've been after for many a year you should just order it right away, rather a consideration should be made, foremost, for when the opportunity might next present itself. It's often said in the rare book trade that books always come around again, but that doesn't mean we'll always get them the next time round! The point is, you might pay more than you think the book's worth just to take advantage of the rare opportunity.
5. Always consider the market value
Possibly the most important thing to take away from this is that every dealer prices their books poorly at some point in time. I remember a dealer friend of mine picking up a book I'd bought and telling me that he'd led me up the garden path with it. He had a copy and so had I. He'd seen the price on mine and realised that when I priced it I'd used his as a guide. It was true, there were no auction records and his was the only other copy I could find. I'd actually priced it at half the price of his copy because it seemed expensive. The point is that I'd made a mistake pricing it as I'd based it on his copy, not on what I thought it should actually be worth, and of course, he'd made a mistake in pricing it too*.
The overarching advice here is that if the book seems overly expensive then there's a chance that unless you've missed something, that the seller has made a mistake (or worse, they're just chancing it). As booksellers we buy books, often from people with no experience in the field, so we see this day in, day out ourselves.
*the reality of it is that this mistake was corrected with time as both copies sold for their original asking price.
6. Consider whether you're buying just a book or a service as well
What we would like to impart more than anything else is the fact that the asking price for a book isn't just for the book, and I don't mean you're paying for shipping, the convenience of paying by card or packing materials, it's also the benefit of buying from a professional seller. This means, or at least should mean, that you're paying for that seller's guarantee, experience and service. Over time, you'll develop relationships with your sellers, which means that they'll start giving you first refusal on books you may be interested in, they'll seek out titles for you and maybe even give the odd discount here and there. They'll also be there to help with decision-making. The tailored experience is perhaps the single most important thing a rare bookseller can offer.
Well, I hope that has been useful, The long and short of it is that these are rare items, with many variables effecting the price, and a varied buying market. Pricing isn't an exact science, but working with a reliable dealer will, over time, help you feel secure in your purchases. At the end of the day, sellers want to sell their books, at least most do, some genuinely don't, if they aren't sensitive to their market and value accordingly, they will fail.
A final note: there's a phenomenon in the rare book trade that gets called the 'eBay mentality', whereby a collector has been lulled in their early years by the draw of getting books cheap on eBay. There's a readiness to distrust, a tendency to collect based on what others are collecting, a belief in being pleasantly surprised rather than getting what one expects and the notion that time is of the essence as competition is always high. An eBay mentality doesn't make collecting fun. Take your time, assess each purchase for value and place in your collection, build a relationship with a seller or a group of sellers, don't rush it and don't get swept up in the hype.