I saw something this morning that made me think. This is about a month and a half of accumulation of government issued proof sets, mint sets, and commemorative coins in my coin shop. This stuff all goes away to another dealer... at a discount... a wholesale discount. This is usually 10%-20% back of greysheet bids. Sometimes we get customers who don't understand why I'm paying 30%-40% back of greysheet bids. Firstly it's because I could NEVER retail this much government material. and secondly... I probably already have 20-25 of them if not many more. I just thought it would be interesting to open a discussion on this aspect of the business.
Most of the time people are so set in their ways or so sure that they know what is going on, that they fail to realize that there is a second side to every story and a second point of view that needs to be considered. I try to think of this in my day-to-day life...must be the gemini in me.
I think its a good topic as well. I do believe way too many people do not understand why a dealer offers what they do, and if you understand that I believe it will be help them get better value if they ever need to sell. Yours is a great example. You do not have a huge market for this material, so you need to buy further back from bid because your only market is wholesale. However, if you find a dealer who does have a huge market for these, then I am sure they can afford to pay more. I would never dream of selling my ancients to a traditional US dealer. He simply does not know the coins, nor has a market for them. Its just another example of the value of education. I do not begrudge dealers buy prices in the slightest. If you can only sell these wholesale, then you need to pay less than that. BUT, you are offering cash on the spot, something many times a person needs. I look forward to more information regarding the wholesale market.
Interesting, I have one dealer who absolutely adores the 1994 Jefferson commemorative sets so he pays a bit more for those.
WOW!! I can't even begin to fathom the logistics associated with those commodities, which I minimally realize can be very problematic. I just know your occupation wouldn't be a 1st choice for me. Thanks for sharing a portion of your perspective on B & M efforts.
Your experience regarding these government issued sets is the same as mine. Currently, I picked up two large boxes of this material from a client yesterday as I was driving through his area to meet someone else. They are now sitting in the trunk of my car. He will realize 70-80% of Greysheet for them once I sell them to a larger volume dealer and they get sold up the foodchain until they are listed with those who have large retail clients.
Well, I'll tell you what. I understand that for every proof or mint set that I buy for whatever reason, I'll end up selling it at a steep discount from what I paid for it. That's the price I pay in looking for varieties.
I know of dealers that won't even touch those sets. Then they end up in a pawn shop where someone gives them pennies on the dollar but marks up the price when it comes to sell - full or even fuller retail.
Matt I wish you lived in my neck of the woods. As a part time, local show only dealer I've been trying to find a local dealer that would wholesale me some of their stuff that they have to buy to get the good inventory. There aren't too many dealers in my area and I think they all either bulk lot on Ebay or sell it to other dealers like you do. I just can't seem to get on their list....
When it comes to "common material" like these sets, both Matt and Tom make good points for the buyer and/or seller. They are simply too easy to come by, and more often than not, many sellers complain that they are being low-balled by the dealers. That just isn't true. Chris
You buy those from your customers at a steep discount. Sell them to a wholesaler. The wholesale company probably hypes them, and sells them back to the uneducated public, on HSN, and other Coin t.v. shows. Those customers need money so they bring them into their local coin shops, and sell at a deep discount. The process repeats. I'm guessing that is how it goes
The words that I bolded in your quote above are the issue that is most easily resolved. Go to some shows that are out of your area, makes some contacts with dealers from other parts of the country, and establish relationships with them. For that matter, establish one with Matt, if both of you are willing. The same thing that works for collectors works for dealers too. That's why they have coin shows, because you cannot rely on finding what you want in your own backyard. What you have to realize is that your backyard is as close as the nearest USPS truck
Doug, Based on my experience with local "dealers" they want to "cherry pick" at less than market pricing, rather than acquiring a large lot at a fair price and re-distributing properly through appropriate venues. Large volume dealers really haven't enough time to deal with the petty nuances of local wanabe "dealers". The large volume dealers have an appreciable investment in their inventories, where the wanabe dealers are bickering on virtually every item. and want to profit on every transaction. I make a "fair market" offer on complete lots taking the material that a specialty collector thought was neat but has less than "junk" resale value upon selling. I gamble as a hobby hoping that I can resell the less desirable material at a minimal loss, possible finding a future appreciative home for the "market acceptable" material. I sell quality material 4-5 figure dollar lots at less than market pricing, including "loss leader" high grade dollars. half dollars at ~melt value. I constantly receive local dealer requests to purchase the quality dollars and halves at coinflation prices. I offer to purchase comparable material to mine at 110% of coinflation pricing, and supply them with a collectors universe (published owner of coinflation) contact for directions to acquire their quoted priced material. A reasonable "real" dealer or investor who recognizes quality always arrives to purchase the lots offered. This happens regularly in the "real world" where you don't always win, but count on the average being positive. JMHO
Yeah, there's plenty of dealers like that out there. But that's not the ones you want to deal with. True, but, you knew there was a but didn't ya ? Large volume dealers will happily establish a relationship with a smaller dealer who lives in the real world. They will fall all over themselves just to have a trusted outlet where they can get rid of the common stuff they don't want, at a reasonable price. They will do this because it is to their benefit to do so since so many sellers coming to them want to make all or nothing deals on what they are selling. Having that outlet with the smaller dealer, that allows the large dealer to offer a bit more on what he's buying because he knows he will not get stuck with the common stuff he doesn't want. And it's a win for the small dealer too because it gives him a source for that common stuff at reasonable prices. The ones who bicker all the time that you mention, they don't live in the real world. They don't know the market, so you just say no to those guys and walk away. I'm not saying that any of this is easy. You don't contact just any dealer and expect to be able to set up a relationship with him. You have to work at it, spend some time talking to people until you find the right ones. But it most definitely can be done. Why ? Because it's a win win for both parties. And that's what everybody wants.
