Why the U.S. Secondary Postage Market Has Been Imploding for Over a Decade

If you’ve been involved in buying or selling discount postage over the past couple of decades, you’ve probably felt it: the U.S. secondary postage market isn’t just struggling—it’s been imploding. Quietly, steadily, and sometimes not so quietly. It’s not just one factor causing this either. It's a combination of changes in postal policy, technology, fraud, and market shifts that are undermining what was once a fairly predictable side market. Here's a closer look at what's been going wrong—and why.

Forever Stamps Changed Everything

Let’s start with one of the big turning points: the introduction and widespread adoption of Forever stamps. On the surface, they were a convenience—a smart solution to the constant problem of rate changes. But they’ve also had a major side effect: they wiped out demand for make-up rate stamps.

Before Forever stamps, a rate increase would send stamp users and dealers scrambling for 1c, 2c, and 3c denominations. Now? Not so much. People just buy a roll of Forever stamps and don’t worry about it again for years. Fewer people need the smaller values, which used to keep the discount market active.

Counterfeit Forever Stamps: A Flood from Overseas

A lot of people point to counterfeit Forever stamps as a major issue—and they’re not wrong. Chinese-made counterfeits have flooded the market, especially through shady sellers on places like Facebook, Etsy, and even Amazon. You’ve probably seen them: entire coils being sold at absurd discounts, like 100 Forever stamps (with a face value of $73) for $10.

Some people throw around numbers like $1 billion in losses, but the reality is a bit more complicated. The U.S. Postal Service does lose millions annually to counterfeit postage and check fraud, but that $1 billion figure is mostly tied to the broader scope of financial fraud handled by Postal Inspectors—like counterfeit checks and money orders. Still, one individual case involving fake postage labels reportedly cost USPS over $150 million1. And platforms like Temu have even been implicated in widespread abuse of the USPS label system.

Whether or not the counterfeit stamp crisis is truly in the billions, the effect on the market is undeniable. If someone can get Forever stamps for 10 cents apiece—albeit illegal ones—it drives down demand for legitimate discount postage. It also erodes trust.

Massive Fraud on Temu

Some Chinese merchants on e-commerce platforms like Temu are exploiting counterfeit U.S. postage labels to drastically cut shipping costs and boost profits, a scheme costing the U.S. Postal Service (USPS) millions each year2. These fake labels—sold online for as little as 60 cents—are generated and printed in the U.S. using digital files sent by sellers in China. Though creating or using counterfeit labels is illegal, enforcement is difficult and costly, allowing many packages with fake labels to slip through. The practice is especially appealing to merchants operating under slim profit margins, as legitimate USPS shipping can cost $8–$10 per package.

The issue is compounded by broader structural incentives, such as the now-revoked de minimis exemption, which allowed low-value parcels from overseas to enter the U.S. duty-free. Though only a minority of sellers engage in counterfeit labeling, the financial pressure to maintain ultra-low prices on platforms like Temu increases the temptation to use illegal methods. Some sellers, like one who reportedly buys 1,000 to 2,000 fake labels per day, admit the risk is worth it due to the high profit margin. While Temu claims to prohibit such practices, experts warn that these tactics, combined with brushing scams and label fraud, could lead to increased regulatory scrutiny of Chinese e-commerce in the U.S.

The UPU Problem: USPS Subsidizing Global Shipping

Then there's the international side of things. For years, the U.S. has been footing the bill for cheap packages coming from China and other countries because of our obligations under the Universal Postal Union (UPU). Under that structure, countries like China paid less to send packages into the U.S. than U.S. sellers paid domestically.

That led to bizarre realities where a seller in China could ship a lightweight item to Iowa cheaper than another seller in the same state could. The USPS took a loss on each of those packages—and in effect, American postage subsidized Chinese e-commerce.

Although some of that has been renegotiated in recent years, the damage was done. The explosion of low-cost international shipping flooded the U.S. with small parcels—and made it harder for U.S.-based sellers using domestic postage (especially stamps) to compete.

USPS Online Discounts: The Real Market Killer

But here’s the real killer—and it doesn’t get talked about enough. The USPS itself is undercutting the secondary postage market. Hard.

If you’ve checked rates for Ground Advantage or Priority Mail online, you’ve probably noticed something shocking: USPS offers steep discounts—sometimes as much as 36%—just for buying and printing your postage online. It’s a no-brainer for most shippers.

And that’s a direct blow to those of us who used to sell or use discount postage. Why? Because stamps don’t qualify for those discounts. If you pay in stamps, you’re paying full retail—no breaks. And suddenly, those 20% discount deals we used to offer don’t seem all that attractive. Why would a seller go through the hassle of sticking a bunch of stamps on a package when they can print a cheaper label in seconds?

Small Denominations Are Now Practically Useless

This brings us to one of the saddest parts of the story: the death of small-denomination stamps. Back in the day, stamps like the 4c Lincoln or 5c Washington might’ve had a niche use. Today, they’re basically unusable for practical shipping.

With postage rates so high—especially for packages—you’d need a literal wall of 3c stamps to cover the cost. Nobody’s taping 50 stamps to a parcel. And so demand for these values has dried up. In fact, many dealers won’t even buy stamps under 18c anymore unless they can get them for a steep discount—like 25–33% of face value.

Wholesalers Are Out—and So Are Their Clients

I saw this firsthand. When I started in the business, it was normal to offer a 20% discount on postage. Buyers were happy to save a few bucks, and dealers could still make a margin. There was real demand.

But as USPS discounts deepened and Forever stamps became dominant, the big buyers started to vanish. One New York dealer I sold to for years ended up drowning in inventory. His clients wanted only high-face stamps—nothing under 18c—because they didn’t want to waste time applying dozens of little stamps to every parcel. When USPS launched their online label discounts, those same clients dropped stamps entirely.

And just like that, he had no one left to sell to.

The Ripple Effect: Oversupply, Undersold

When wholesalers dry up, everyone else gets stuck. Suddenly, the smaller dealers who used to unload bulk postage to the big guys are stuck with boxes of stamps they can’t move. So what do they do? They dump it. And prices fall further.

Today, it’s common to see large lots of older, low-face postage sell for 25–33% of face—just because nobody wants it. Not collectors. Not shippers. Not even resellers.

Where Does the Market Go From Here?

So, where does this leave the U.S. secondary postage market? In a tough spot, honestly. It’s still possible to make a bit of money in discount postage—but the landscape is completely different. The USPS’s own pricing structure favors digital transactions. Counterfeits hurt trust. Small stamps are increasingly obsolete. And the backbone of the market—bulk buyers and wholesalers—is collapsing.

The ones who are really paying the price for this collapse aren’t just dealers—it’s the longtime collectors. Many of them supported the Postal Service for decades, faithfully buying sheets and plate blocks as a hobby and investment, trusting these items would hold their value. Now, when they try to sell, they’re met with offers as low as 25% of face value. To them, it feels like a slap in the face. They paid full price for what was once considered a valuable collectible, and now they're being told that sixty-year-old stamps—pristine and neatly preserved—are only worth a small percentage of what they paid. It’s hard not to feel ripped off. After all, aren’t antiques supposed to go up in value, not down?

This leaves a bad taste in the mouths of stamp collectors looking to sell their collections, who often have the instinct to “kill the messenger” and see the dealer as the villain—ripping them off—rather than recognizing the complicated market forces at play. But the reality is, in today’s postage market, even the messengers are struggling to survive.

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