Product Market and Financial Background

Philately, the collection and study of stamps is a hobby from very old days where the first stamp was released in UK in 1832. Collecting stamp has been considered as the “King of the Hobby and the Hobby of the Kings” where as the top persons in the world is a stamp collector including Queen Elisabeth II. In Sri Lanka Mr. Earnest de Silva, consider as the king of the Sri Lankan Philatelist who construct the YMBA Colombo by selling on of rarest stamp in the world of his collection.

First, people collect stamps for the very simple reason that all people of intelligence are delighting in surrounding themselves with the fine and the cultural things of life. The mere ownership of something fine and rare is a great source of satisfaction in itself.
Payment methods of the counter are cash and visa credit cards.

The collecting of stamps is one of the most satisfying of all avocations. It provides us with a whole new world to explore. It satisfies the yearning for knowledge of faraway places. It stimulates the interest in myriad subjects of history and technology which would not be available otherwise. Stamp collecting provides with the wonder of the unusual, the thrill of the unknown. It takes to the farthest corners of the earth and even beyond into the universe itself. Stamp collecting brings close relationship with neighbors, next door, in a distant city, or in a remote country. It provides a common ground where anybody meets on equal basis, people whom would never know by any other means. It satisfies the people urge to learn, to own, and to elevate them to a higher plane of existence. In a stamp collection we may leave to our loved ones the rich legacy of a satisfying life, with a substantial monetary value. br> Stamp collecting does all of these things and, in the end, people can sell their treasures and salvage in return a considerable portion of the money they have expended.

The first Sri Lankan stamp was issued in April 1st 1857. The Philatelic Bureau was established as a separate entity of the Ministry responsible for postal affairs on 1st. January 1967 as the result of a cabinet decision taken on 2ndSeptember 1966.The the main objectives of the Philatelic Bureau were:-

1. The promotion of the sale of stamps within the country as a measure of earning revenue and stimulating savings.
2. The sales of stamps to foreign agents and foreign philatelists with the intention of bringing in foreign exchange through the bulk sale of stamps abroad by private persons.

The designing and printing of the stamps was started by the philatelic bureau in June 1972. Before that it was done by the Department of Inland Revenue.

Presently in the broad sense the responsibilities of the philatelic bureau are:-

1. The maintenance of an adequate stock of stamps in the country to avoid any shortage in any required denominations.
2. Facilitate stamp collectors for all their requirements.

Market

The stamp market can be split right down the middle; the primary market and secondary market. The primary market is the domain of those who primarily produce stamps, covers and other related items, whereas the secondary market is confined to those who eke out living selling stamps that they purchase from primary producers, collectors and other dealers. The first group comprises governments, philatelic agents (who produce stamps on behalf of governments). They sell directly to dealers and collectors. As it only costs a fraction of a Rupee to print and distribute a stamp, the markup is very high. For a typical Rs.5.00 Sri Lankan stamp, the gross markup is about Rs.4.50. But if all post offices sold their stamp production entirely for postage, then the government has to incur more than 3 times the face value of the stamp and not gain an appreciable markup. Therefore selling stamps to a philatelist solely for his collection or to a dealer or buyer is much more worthwhile than selling one purely for postage. On the other hand from the philatelic point of view the more stamps are used for postage the greater the philatelic value. That is why early unused stamps are so expensive. (This is not always the case). It's not hard to find stamps that are printed in low quantities. There are stamps that are printed in quantities lower than 100,000 or even lower than 10,000. However, there are literally hundreds of stamps out there that were printed in low quantities that aren't too expensive.

However, once a government sells a stamp, it generally won't buy it back (with the exception of some countries, notably Great Britain). That leaves two things we can do with it: use it for postage (if we want to) or sell it to an interested collector or dealer. Therefore the primary market (government to collector/dealer) is just one way, and works (generally) at a fixed price. The secondary market (dealer/collector to dealer/collector) is based on the general laws of supply and demand and that is why the price in the primary market is often unrelated to the price one can get in the secondary market.

The value of a stamp is determined by a number of factors including:

• The number of stamps available in the philatelic market.
• Demand from collectors inside and outside the country of origin
• Condition. A damaged stamp is worth only a fraction of one in fine condition
• Thematic appeal.
• Perceptions as to current or future value
• Current events. A news event may temporarily increase values, for instance the death of Diana, the Princess of Wales.
• The place of purchase or sale. Values vary according to where the transaction takes place. Prices vary from country to country for the same stamp and prices realized at an auction may be different to those charged by a dealer or in a private sale between collectors.

Recent survey done at the Philatelic counters and standing order holders in the Philatelic Bureau reviles following information;

Customers coming to the counter

Standing order holders

1. 51% of the customers coming to the Philatelic Counters were more than 40 years of age and 18% of them were more than 55 years.
2. 26.5% customers purchase stamps not only for him or her but also for some other collectors local or foreign.
3. 80% of the customers coming to the Philatelic Counters were started collecting stamps since school age.
4. 39.1% of standing order holders were below 20 years of age.

Financial Background

Revenue earned by the Philatelic Bureau since 2005 are shown below: