Options for liquidating a large or valuable collection

Discussion in 'US Coins Forum' started by National dealer, Oct 9, 2004.

  1. National dealer

    National dealer Coin Dealer

    Since many of the members have asked this question reqarding a previous post, I thought that I would start a new thread and offer the options.

    1. If you can determine the value of your collection, this allows more options. So lets start with that one.

    If your collection contains highly commonly recognized or traded coins such as Morgan Dollars you can sell them to a dealer, shop the coins between dealers or use a various range of auctions.

    If your collection is more high end material such as Key Dates, Ultra Grades, or Rare coins, your options are more limited as the collector base is smaller. While you may run across a better date St. Gauden in MS-66 on venues such as Ebay, you will find more buyers of this type of material with more mainstream auction houses such as Bowers or Superior. Collectors participating in these type of auctions are prepared to buy high end material, and there are fewer bargain hunters (as a whole).

    Selling outright. A common myth among collectors is that you should shop your coins around to get the best price. This is often a downfall for those that have limited knowledge about how the market works. Now again, this is for large, valuable collections only.
    If you contact a large dealer with an option to sell your collection, that dealer will begin to use the dealer networks to find potential buyers. None of us want material sitting around collecting dust. So as we shop these coins around to find the interest, if other dealers are doing the same thing, it can appear to dealers that you are trying to auction the coins to us. This is NOT a good thing.
    When dealers are trying to put together a price for your collection, much of the price will depend on what we can get in return for our time and money. Now this does not apply to run of the mill coins. While there are quite a few dealers who have no issue with spending a hundred grand on a collection, we all have the same goal. To move the material in a timely fashion.
    So if you are attempting to sell a large, valuable collection, start with a large dealer to begin with. Don't try the local shop in town, or a friend of a friend. What happens more often than not, is when too many dealers are attempting to "shop" the same collection, no one buys it.
    Dealers make a living at selling coins. We all have a short list of buyers for high end material. Often, many dealers have the same list of buyers, so if we are all trying to sell a particular coin or set, it makes it hard if other dealers are trying to sell the same set or coin.

    Now if you do not know much about coins, your options are still the same. First, you must find a dealer or well versed collector to help you determine value. Just because a coin is old and pretty doesn't make it valuable. Once you determine value, research is necessary to determine where the best venue is for your coins. It could be an outright sale, auction, consignment, or taking them to a show and shopping the coins yourself. The point is, you MUST know your collection.

    Internet forums are a great place to learn, but often the visitors/members are amazed at high value items appearing on venues like Ebay. Even this forum has threads of high priced coins, with posts wondering if the seller has lost his marbles. Now to those of us that are more knowledgeable in the coin market are not shocked at high values as some coins routinely command high prices.

    Now I understand that many will disagree with these options, and that is fine. My exposure to the coin market is different than most people as I am on the other side of the isle. I can only offer the advice of what I have learned making a living in this business. There are probably many other options available, and some may even be better. Again, I can only offer what I know, without regard to personal or professional gain. I am here to share what my experience has taught me in this business.
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  3. collect4fun

    collect4fun Senior Member

    ND

    What is considered a large collection for sale, 50 coins, 100 coins, 250 coins, more?

    When someone brings in coins for you to buy and you need to shop them around to find interest, how long does this take, 15 minutes, several hours, a couple days? Does the buyer leave the coins with you while you do this search or do you just make a list?
  4. National dealer

    National dealer Coin Dealer

    By large I mean $50,000 or more. The number of coins doesn't really make much of a difference. There are many coins in which "price guides" do not help. This is the case with coins that are not actively traded, and only enter the market place once or twice a year. A handful of examples would include Key Date Saints, Morgans, or early gold. Coins that individually sell in the 6 to 10 thousand dollar range or more.
    These are coins that are traded among a very small group of buyers. The time it takes is determined by the amount of material. I worked a deal earlier this year that took over a month to go to market. When you reach the upper end of the market, there really isn't alot of buyers, that is why it is important to follow an outline as the one I proposed.
    Once again, there may very well be other options that will work. I am not saying my way is best, or the only option. Just one that works.
  5. GDJMSP

    GDJMSP Numismatist Moderator

    When trying to sell a coin collection there are not that many different ways to go about it. You can sell to a dealer, consign to an auction house - be it conventional or internet based or try to sell the coins individually or in small groups yourself. That's about it. All of these methods have their advantages and disadvantages.

    Let's look at selling them yourself first. This only works well for those who have more than a basic knowledge. And it can be quite time consuming if the collection is large either in number or monetary value. It doesn't really matter if you sell the coins directly to other collectors, by using ebay, to dealers a few at a time or the internet auction houses like Heritage and TeleTrade. You will have the hidden costs that accumulate quickly like shipping & insurance costs and fees. These costs can quickly add up. But you do have one major advantage - you will likely realize the highest total value.

    When selling the entire collection in one shot by using an auction house you have the fees to deal with. The auction house is providing you a service so that is to be expected. But you also have the vagaries of the coin market to consider. For the past 4 or 5 years now the coin market has been for the part quite bullish. This is generally a good time to sell. But it has also had short periods of sluggish activity. And if during the particular auction that your coins will be sold during happens to be at the same time as one of these slow periods - well you certainly don't realize the best prices. And if it happens during or at the beginning of a market downturn - you could only receive a fraction of the previous value.

    When choosing an auction house you should also consider what type of material they normally sell. Some houses specialize in US coinage while others in world coinage. The makeup of your collection will determine which you should choose. And you should also consider the venue at which the auction will take place. Some venues like Long Beach attract a larger number of collectors and dealers and typically bring higher prices. You should also consider what other possible well known collections will be offered during this auction. If you have coins that are very similar in type and condition, or of lesser quality, than those being offered in the name collection - your coins will likely attract little attention and bring low prices. What you want is for your coins to stand out during the auction - not be just considered another one of many. One of the primary advanatages of selling your collection via an auction house is you can be assured the house is working for you. They want your coins to bring the highest prices because that will increase their fee. They have nothing to gain by doing otherwise.

    Selling to a dealer on the other hand can be quite risky at times - especially for the inexperienced collector. I have personally seen big name dealers that are highly respected try to take advantage of inexperienced collectors or clueless owners who have inherited collections. I once saw one of these dealers offer face value of $6,400 for a collection that I later spent 6 months cataloging and setting a conservative value of over $80,000. There are many, many more horror stories involving this scenario. So carefully choosing which dealer to approach is extremely important. And a trusted name is not always enough.

    I would urge anyone who knows little or nothing about coins to find a trusted friend who does know about coins and take them with you before ever approaching or contacting any dealer. And if you do not have a trusted friend - then buy one. Find somebody and pay them to participate and act in your interest. Offer them a percentage though for this will provide the incentive to help you achieve the best possible price.

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