Dealer Buys GSA CCs as Common BU CCs Problem?

What ever the seller feels is fair to them.

 

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Not a very nice reply

 

I may have misunderstood what he was saying and am sorry if I hurt anyone's feelings. But basically if you look at CDN which every dealer has, it gives indications for ordinary material, not "special" material like rare GSAs. The same dealer had an 1891cc Morgan "spitting eagle" certified MS63 that he was selling for 64 money, he has a perfect right to price things high hoping someone else will fall in love with such material. Buying is another matter, as far as I know not too many dealers have gotten in trouble for buying cheap, though the word gets out that either they are unwilling or unable to offer reasonable prices.

The rare date GSAs carry significant premiums, from the 78cc, the 79cc, to the later ones, and the prohibitively expensive 89cc.

 

How many dealers do you think would remain in business long if they paid anything near retail?

That's how business is run. By low, sell high, make a profit.

When you go to a restaurant and pay $8.95 for a cheeseburger and fries, do you think that's what the restaurant pays for burgers? That $8.95 is cover the total cost of the sale, cost of the food, cost of utilities, phone, cooks to cook it, servers to take the order and serve it, etc., etc.

 

So what are reasonable buy/sell spreads? 10% mark-up? 20%? 30%?

Or play dumb when buying with the greysheet pretending you don't know you are looking at a rare variety or an apples and oranges comparison like MS63 better date cc Morgans and the GSA variety? Or pricing national currency according to Greensheet when the Kelly book and auction records show a complete disconnect between common type and rare town notes?? Some dealers need a course in business ethics because if they are giving one line when they are buying and something else when they are selling there is something terribly wrong with their consciences. If a customer sells a collection for $5K and then finds out the dealer was able to sell it for $50K they have a right to leave problem feedback on them, steering future customers away to more honest and fair dealers.

 

That's why I stay out of bars and eat at home..........Much cheaper that way.

 

As a fellow dealer I agree. This really gives us nothing to go off of without the coin. If it is a 61, 62 and the dealer pays 60 money it is not to bad. The bid for 63 is $700, so it is not like he could make that much unless it goes 64.

Next seller has the option NOT to sell. If people do not agree if my buy price that is fine. If they want to try and go get the $700 on eBay after the 10-13% of fees, taxes and shipping. If they want to negotiate back and forth a little that is fine. I try and be as transparent as possible.

Next there is coin pricing. On the dealer side it is very difficult. The Gray sheet is out of date with many of the auctions and their are dealers that usually one or the other. I have dealers look at me like I am stupid when I use auction prices for something, when it is double gray sheet. You can't check every source. I personally like CoinFacts because it puts most records under one website, but even that is not perfect.

My opinions for what their worth. Main take away: not every coin dealer is a crook and you don't have to sell.

 

Although, Mike's Sports Bar in Coram has awesome burgers.

 

Anything the dealer wants. The other thing you have to look at when it comes to a dealer's buying is how long the item remains in their inventory, as that impacts the length of time the dealer's funds are tied up before the item sells.

If you watch Pawn Stars, Rick says that quite a bit when certain specialty items are brought in, i.e. a certain painting, or odd collectible, etc.; and he's correct by saying the item will sit in his store for a long time before someone looking for that particular item comes in to buy it.

You're going on the assumption that grey sheet is the bible on absolute pricing, but realistically it's only a guide, no different that completed sales on eBay, Heritage, or Teletrade.

I defer on this as I don't collect notes and know nothing of them, nor do I track sales of them either.

But what you're not understanding is the dealer has overhead, not specifically a payroll overhead either. It's their business. They have to cover all of their expenses when buying and selling. I refer you back to my post #24, and I'll expand on that for you.

The cost of ground beef is $2.98/lb., which is $.19/oz. Most places offer a 1/3 lb burger, or 5.4 oz. which comes to $1.03 for just the burger. Add $1.50 for everything else that goes on the plate: cheese, lettuce, tomato, onion, the bun, and 6 - 8 oz. of fries. You're up to $2.53 for just the cost of the food on the plate. Now you need to cover your overhead of payroll, utilities; gas, electric, phone; then there are costs for sewage, water, garbage. Now, multiply that $2.53 by 3, and add $1 to it, and you're up to $8.59 for a retail price to charge for your cheeseburger and fries. That's enough to cover the cost of your overhead and your food cost, and have a profit afterwards.

But in the same token as you feel dealers should have an ethics education, SELLERS should have a selling education.

Let me ask you this: Is the seller forced to sell their collection for $5k if they know it's worth much more than that?

Let me use another example: Used cars. You decide it's time to get a new car, whether it's used or brand new. You go to a car dealership. You've looked up the Kelly book value of your car, and let's say the private sale value is $3500. But the trade-in value is half that, or $1750. The dealer is not going to give you full trade-in value for your car. Generally, their offer is 50% of the that value, and sometimes less than half. The point is, you're not going to get full trade-in value for your car from a dealer. You're actually better off, in some cases, to sell your vehicle in a private sale.

But are you forced to accept that offer for half the trade-in value?

 

Education has a value. The value you get will be close to the differential in education between buyer and seller. Regardless which side you are on.

 

It a buyer can play by any rules he/she wants than the seller and other knowledgeable numismatists can operate according to rules they believe in; with unscrupulous and rip-off buyers/sellers they can go on this site and many others as well as online sites where you can rate virtually any business or leave problem or good feedback for them as well they should. And the younger generations are quite good at this using all the tools at their disposal to fight against what they regard as problem business activity where every new wave of collector is treated as a potential target of sales gimmicks to get them to part with $$$ to get what the promoters are pushing; and the sellers, in many cases inherators of collections and valuables, may have no idea what their parents/grandparents collections are worth and they become prey for high pressure buying methods as well as dishonest discussion of values. I have heard way too many stories on this theme, only today a fellow who bought a high end '55 DDO for $130 and quickly flipped it for around 10X his buy price! If you went through all the transaction records going back many years to recent purchases of raw coins and currency you would be shocked.

 

Topic comes up over and over. I think Tom and Doug covered it best. I know the last time I sold a batch of graded coins to the local shop I purchased a grey sheet before selling. I priced the coins on grey sheet bid prices - these were nice coins. I was off by like $20 on the total - I know they buy based off grey sheet. They turned around the same day they bought them and listed them on ebay. I saw them that night. I was surprised at the prices realized - a couple only sold for $30 to $40 more than they paid(before ebay fees). Overall they did fine - I would not call them dishonest at all. Another thing is dealer, like my local shop, do not buy based off variety - but if they research and find one they will sell based off that variety. There is always an opportunity to cherry pick them.

 

That last example I would say is atypical unless the coins were high end, high demand coins for a dealer to offer you around GS bid, in some cases they would be losing money, really in many cases they would and with the 9% plus ebay fees they would have to buy NGC/PCGS certified no problem coins a little behind bid, if the grades can be looked up in GS, not MS61 coins, etc., which are not listed except in Bluesheet. The dealers I have generally come across buy considerably behind bid for most all coins, buying type gold coins at their melt price, etc., even if certified with whatever argument they want to make, the market is weak, the coin has spots or toning or doesn't have enough eye appeal, is overgraded, etc.. And many of them advertise in print, tv and elsewhere that they are the top buyers. None of this is illegal, but frankly many sellers do not know how to look up the value of what they have.

 

You'd be surprised how many sellers, even those not collectors, know how to search for values of the coins they wish to sell.

This forum alone get's numerous, new members whose most common question is what's it worth? They receive many, though repeated, opinions on value, and also links to various sources for value information, price guides like numismedia.com, PCGS and NGC price guides, as well as how to search completed sales on eBay, Heritage, and TeleTrade.

As far as dealers buying a "little" behind GS bid, I would say it's more than a little, regardless of raw, or certified.

 

There is some truth here but it honest depends on the coin... And the dealer.

Raw coins... I tell my employees to be around 25% back of GS bid unless the coin has a major issue... Then net grade it and give it the same treatment.

Certified coins I tell them to be at 5-15% back depending if we have a customer for the coin. There are some coins however that I have known to pay more than bid for. For example last week a customer brought in an 1885 V nickel in a PCGS MS63 holder.... TOUGH COIN... GS bid is $2650 and we paid $3k... Why? Because the coin is selling for $3,600 on heritage for a comparable example...

Now I'm sure that some dealers live by the sheet.... They also die from the sheets when people like me start living outside of the box. There are very few brick and mortar guys that will pay over bid on a regular basis.

 

I need an 1839 Liberty Seated half dollar for my Liberty Seated type set. ALL of the retail price guides show an AU-50 with a value of $2,500.00 but try and find one in that grade for less than $3,000.00, they are selling for closer to the range of $3,300.00 to $3,500.00, good luck, never going to happen unless the coin is raw and has problems.

For Morgan dollars I can go to a coin show and get just about any I want for at or slightly above Grey Sheet bid and for some dates even less than bid if I really shop around.