Is now the time to start my Coin and Silver business?

A good point that Matt brings up. Diversify. My experience was in the antiques/collectibles business. Even though at the time I was a newbie, I knew enough to do general research. My area was modern collectibles (mainly 1940's to the 1980's) but I could spot a deal on a piece of Stickley furniture or a Beswick horse which I could make a killing on. Some of my partners stuck to traditional pre-1900's furniture which was big and heavy but in their minds, true antiques. These guys would make the odd scarce sale whereas I averaged (in the haydays) $1,000 a day flogging what they called crap. Of course, ebay and a very low Canadian dollar and getting paid in U.S. dollars helped).

 

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A friend of mine keeps kicking around the idea of offering this service: to organize and grade collections. So (I imagine) he would take the boxes full, sort, label, put in folders, catalog, put on disc, etc. He's in a big metro area, on a side of town where there are no coin stores. So he might get a little boost just from that. This sounded like quite a long shot as far as money-making, but he wouldn't do it for a living: just as an extension of his hobby. I know, peripheral to the OT...but it made me think of that.

 

I'm pretty sure Charmy is not a B&M.

I didn't thoroughly read all your facts. But adjacent cities in So Cal with populations of 2 (Pasadena) and 3 (Glendale) times your city only have one B&M. So combined they have Five times the population to draw from. Plus they draw from the densely populated San Gabriel Valley (1,000,000-2,000,000 people?).

 

Hey JCB... let's pretend you're open for business right now. I walk into your shop with some junk silver (coins), say approximately $100 face. What percentage of melt (or how many times face) would you offer me?

 

100 dollars face of what?? Are we talking quarters, dimes? I would pay whatever supply and demand dictates, and whatever will keep my lights on. It would be slightly under spot.

I'm not a schmuck. I wouldn't want my name associated with any negative network externalities. That being said, I wouldn't be one of these junk dealers that offers 15xface.

 

So $100 worth of "junk" silver coins has a variable price depending on their denomination? Is the melt value of quarters worth more than that of dimes? Halves more than quarters? Assume all coins have no numismatic value... isn't 10 ounces of dimes worth the same as 10 ounces of quarters?

 

[video=youtube;3LAnmnS0-9g]http://www.youtube.com/watch?v=3LAnmnS0-9g[/video]


I hope this lightens things up. I appreciate constructive critisism, but may have mis-interpreted your question as a snide remark. For the record someone could come in with 65-70 kennedys, or 1971-76 Ikes.

 

you're in dc area?

I actually thougth about operating a cash for gold type kiosk or coin shop before. Main reason I decided against it was for security reasons. You ARE a target operating those types of establishments. For a coin shop, you're going to need good security, both electronic and physical. You will probably need a double door system where people can be buzzed in. You probably will not want to work/walk out alone. You will need firearms for self protection.

Yes, you can make a profit, but since I'd rather not raise my risk of having to shoot someone or get shot, I decided against it.

 

Any brick and motor is going to have to turn a profit to pay rent and salaries. Local dealers would probably buy at 21x and sell at 24x or so. Of course large online dealers can do better on both sides, but there's advantages and disadvantages to both models.

 

Lets see. May i be the first person to buy from you from the internet for your new business. I need a buffalo nickels or a roll of wheats

 

If you are dealing in scrap - the 1st thing you need to do is establish relationships with established, dependable, convenient, reputable buyers. As far up the food chain as possible. You'll want more than one outlet for sure. They key to making money in the scrap business is.

1. Don't get attached to your inventory.
2. If you want to play the markets open a brokerage account.
3. Don't hold your inventory seeking a higher market.
4. Don't hold your buying fearing a lower market.
5. Your market is your buyers - not the CME.
6. Set your buy/sell spread according to your market and churn, churn ,churn - turning your cash over as fast as you can.
7. Set your spread at a reasonable level. It is usually better to make a buck off a customer today and set the foundation for a longterm business relationship than pushing for that extra buck and jeopardizing ever doing business with that customer again.

 

Funny someone else just backed up my point a day after I posted this.

Jeweler robbed and killed, perp at large. "security" cameras not enough to ID, but what's the point? Youre already dead.
http://www.cointalk.com/t196333/

 

Sad story about that jeweler. If I were ever in a position to have a decent size store, I'd prolly want to impliment some sort of buzz system for entering/exiting. Other than that, any crackhead that wants to sign his own death warrant can feel free.

 

JCB,
Have you seen Gold Rush it is great example of what happens when bunch of peeps who have never mined gold in their life decide to go do it and lot of their mistakes could have easily been avoided if Hoffman's had talked to other gold mine operators. Point being IMO you increase our success rate if you talk to other coin shops and build your knowledge and even willing to take someone who has worked in one as business partner.

 

Thanks Jack.

 

I visited my local coin shop last week to buy some silver and while going through the Peace dollars and Morgans he had for sale and I asked him about counterfeit coins.
He is a man of few words but he did say "you wouldn't believe what comes through the door". Thats all he said, I paid for my coins and left as he had other customers buying gold jewellry.
I wouldn't venture into the coin business myself unless I had at least a few years of working in this enviroment of handling coins on a daily basis. I did my research on fake coins and I no longer have any confidence in buying anything except for Canadian silver dollars which are not being counterfeited as of yet excluding the rare 1948 example.

 

I helped my friend and his business partner when they were writing up the proposal for their coin shop. All I have to say is, have lots and lots and yes, LOTS of money at the ready to lay down that you won't need to see again for quite some time. Just their small shop and inventory figured up just over $1.2 million, and that was before hiring any employees, utilities or insurance. Granted they are leasing a nice building in a very nice and wealthy community, but the majority of that money went into basic store stock and cash to buy from sellers. It's not a small venture, even if you go without a physical location.

I wish you the best of luck. I'm always in favor of seeing more places for me to buy spring up.
Guy

 

to the OP, I don't mean to be rude, but you aren't ready. neither would I be though.

 

Thanks, I've got distant family in the PM industry, maybe I can work with them. I just kind of want to do my own thing. If I got a loan, I believe I could make it happen. Just kinda starting to get cold feet about the whole economics thing. We'll have to see what happens. If I didn't have a son I'd go for it gunho regardless of the consequences, but it isn't really about me anymore.

 

hear hear