Anyone else had this experience?

It's a jungle out there.........

[video=youtube;BhKlBH2_dVY]http://www.youtube.com/watch?v=BhKlBH2_dVY[/video]

 

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dead on...i wouldnt even walk back into the shop of a guy who "pulls his silver"...he invests poorly...he makes poor decisions....and that means every sale he is making all he cares about is the dollars...not about retaining a client or building a relationship....

i recently had a really long discussion with one of my favorite ebay sellers about this. she (yeah i know, a she!) isnt a huge dealer, she just happens to be able to get her hands on stuff i like because she is in canada and i found her randomly. but she caters to my strange requests, responds quickly, emails me things that she comes across without sounding like a salesman, etc. even if she was 2-4% more expensive than the next guy i would buy from her. plus i know she does her hw and never would sell me something fake, counterfeit, etc.

people like the one the original poster described are doomed to failure, let them wither away in their greed

 

I think there's love in the air.........

 

nahh. my wife hates her. she will here my personal email chirp on my phone and say "that better not be marlene!!"....i fee like in most marriages that would spell infidelity but in ours it means daddies gearing up to buy some shine

 

Lol. I dare not have a female dealer. My wife hates coin dealers enough as it is!

 

I agree, the dealer the OP describes sounds greedy, & sleazy. Even if he has the right to do it, which he does. And I've read too many posts, over several years, about dealers not selling silver when it goes down, only when it's high. It almost seems like the deck is stacked against the small silver investor (ya think)? Not to mention the high spreads, & premiums, for the buyers......

 

I'm not sure if I'd say a dealer is "sleazy" for not selling when the price is down. Those dealers just have a different business strategy than most, one that is not sustainable in every market.

I have ASEs that I paid $36 each for, and I'd sell them today for $28 each because I can buy replacements for under $26 each if I buy more than 20 from Provident. The pessimist can look at this and say I'm "losing" $8 on each ASE that I sell at $28. The way I see it is if I sell 30 of them for $28 each, then I can turn that money right around and buy 32 at $25.78 each. Then I would have two extra ASEs and a few dollars in my pocket to pay for gas and lunch. In my mind, that's not "losing" money.

When you consider dealers usually operate on a wider spread than I do, it's a no brainer...

 

No, the deck is not stacked against the small silver investor, but I would say if you "think" like a small investor, you are doomed. For example, would a big silver investor pay a 20% - 25% premium for silver? I don't think so, but so many folks did just that when AU dropped to $22. All you needed to do was wait.

A big silver investor would have known that it was not a once in a lifetime opportunity and would have been patient. Of course, the "small" investor got a lot of bad info from the sources he was reading. Do you think that the large investor reads Silver Doctor.com? No he does not, he knows that is biased BS from folks with strong connections in the bullion industry.

A large silver investor is also not afraid of some paper silver. He knows the huge advantages of paper silver such as, very low spread, no insurance costs, no storage costs. The small thinking investor believes the scares tactics and will not take advantage of these benefits, but all it takes is $2000 for an Ameritrade account and you are on the exact same playing field as the big boys.

The large silver investor also knows about valuations and it is not ALWAYS a good time to buy. There was so much talk about the Goldman short and how the small investors were sure it was manipulation. The fact is, it was just some smart guys, knowing the valuation of Silver was too high, and taking advantage. The small investor could have taken advantage of this also with the same Ameritrade account that only costs $2000 to open. It only costs 11 bucks a trade to short SLV and you can play like the big boys.

 

Apples and oranges. The coin dealer is still holding the inventory purchased at the old price. The gas station empties the storage tank, then bases his price on the next delivery cost. While his tank is still using yesterday's delivery his prices don't change. Busy gas stations can get 2 or 3 new deliveries a day and his prices are based on the last delivery.

 

Update: The New Normal?

With silver prices still in the doldrums (at least relative to last year), I've been going around to the coin shops in my region, and while a few dealers seem to have taken the decline in stride and are engaged in business as usual, I'm noticing some unfortunate trends with many others.

I originally wrote here two months ago about one establishment who, when silver took that sudden dip, simply immediately pulled all their silver bullion out of the display cases. I checked today, and they still aren't offering any for sale (although they are buying). Others dealers have confided that they are holding back a good amount of their stock until pricing recovers. A viable stategy, I suppose, so long as you can maintain your cash flow through the sale of other goods and the price of silver doesn't go down even further.

There are other more subtle changes I'm seeing. Common circulated Morgans (even 1921's) are now many places being priced $10-12 above their current melt. Uncirculated pieces have jumped up correspondingly. Premiums are also higher (and nonnegotiable) on everything else made of silver.

A more disturbing thing I've seen recently is an across the board upshoot in overgrading, especially of Morgans. A lot more sliders being labeled as UNC's, and a lot of whizzed coins being represented as "AU" that I'd judge would come back as "XF45 Details" if submitted to a reputable TPG. This seems to me to be very shortsighted, and I can't see how they expect to maintain these fictions for very long, and certainly the savvy customer isn't likely to be fooled (at least not more than once or twice) nor continue to patronize anyone engaged in such practices.

To sum up, it appears that during the boom times some dealers were grasshoppers instead of ants, and now are resorting to dubious measures to maintain a level of profitability. From my standpoint, it's revealing as to who I'll be most likely to trust and buy from going forward.
　

 

If I had bought a bunch of silver at 28-33 no, I would pull it off my shelves too. Bad business to sell it at this weeks price if you paid more.

Regarding the creeping dishonesty you are seeing.. Just my speculation but I suspect you may be seeing dealers who borrowed money to buy while the price was still going up. Like the realtors who bought all the could in 05 and overextended, they believed the market hype, and now they are getting desperate.

 

Even if a dealer wasn't properly hedged and is now sitting on an inventory of expensive bullion, it's not as though they can't go out right now and buy at current prices and start selling new inventory, making money in the process.

I asked my dealer over the weekend for a price on ASEs. He responded with "$34, sorry." He went on to tell me that if I wanted a roll instead of a couple, he could give me a much better price, since he could buy at today's prices. I told him he could buy the roll, sell me a couple, and them move the rest in his shop. He said he could, but he wouldn't.

I don't get it. I know he's tied up in pricey metal at the moment, but he's still taking some in here and there, and can stil run his business with a simple infusion of new capital to add inventory at lower prices. I think too many dealers operate with the heart of a collector instead of the head of a businessman.

 

A $12+ premium on a raw ASE? Well, that's certainly the same kind of stuff I'm seeing. I'd begin to wonder about the staying power of dealers who seem to be in this sort of cash squeezed pickle.

Along the lines of maximizing profit on every single sale, another thing I've noted recently with respect to silver coins with some numismatic worth is how many dealers are suddenly pulling out the "book" to justify their pricing, something that rarely has happened to me before now.

 

That's 'cause the silver cash cow has recently been led to slaughter............maybe dealers now will return to the numismatic aspects of their profession.

 

Another really rough day for silver (gold, too). I'd be concerned for the shape of the future market based upon how many numismatically unsophisticated folks bought Morgans, ASE's, et cetera from the TV coin shows and bullion from the big advertisers over the last year or so as surefire "investments" and have consequently instead taken serious paper losses at this juncture. Whether they get disgusted enough to actually dump what they have accumulated is problematic, but on the other hand, the market segment they represent from a buying standpoint might well become very muted, putting even more downward pressure on pricing.

I'd be interested on what the sentiment and activity will be like at any coin shows that are scheduled for this coming weekend. Perhaps someone can report on this.

 

Just like the Government, we get the Dealers we deserve.
My favorite shop used to be more numismatically orientated but the clients kept coming in asking about bullion at a 9 to 1 pace. What kind of store do you think they will be when that is what the people want. He would love to have more people coming in asking for coins but they just are way less then the bullion folks we have.

Look at your local coin clubs. Mine has an auction and more then half of them only care about the bullion part of the coin being auctioned and that is at a COIN Club!