Margins on High End Coins ?

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You just spent 9 paragraphs saying it was fine to lowball someone who was ignorant and then just throw it all away and said it was wrong. The only difference I could find was the gender age and marital status.

 

Sure. If they are asking $10K retail but $5K wholesale because "they can", then would an offer of $6K buy the coin?

 

Why reply to me if your not going to say anything useful?

Yes , I see you're patronizing to little old widows. Evidently, you find them inferior.

 

I find myself torn here. I agree with both the OP and Doug on different aspect of this discussion.

Op, I agree a $2000 offer on a "normal" $5000 coin is unreasonable and I would never accept it.

Doug, I completely agree there should be no limit to maximum profit. However, I do think a dealer has a duty to not screw over the general public. You were talking specific circumstances of specialty knowledge. However, what about general knowledge? A guy walks up to a dealer at a show with some certified coins. One is worth $5000 greysheet bid, nothing special or unusual, lats say a nice XF small eagle dollar. What is the llimit of what a "reasonable" offer would be? The dealer does not know if this guy is knowledgable or inherited the coin. Are you still ok if he offers the guy $50? $500? $2000? Are all of these offers ethical? I am not saying I know the answer, but theoretically I do believe there is a line between "normal dealer profit" and stealing from people.

On the sell side? I don't disagree. If someone is lazy and refuses to find out an ASE is worth melt plus a few dollars and buys them from the tv for $50, then its their fault. In those situations, I do not begrudge a dealer's profit at all.

 

I feel the dealer could offer $50 and not be unethical. The current holder of the coins could (and probably would) just walk away. Nothing unethical here.

 

Regardless of what they paid (because it has no relevance here), if another dealer was offering $5K on it greysheet, Red Book (Numismedia, PCGS, etc doesn't matter) says $10K, you would personally turn down $6K? Do you feel all dealers would turn down $6K or do you feel some would accept it?

I couldn't care less about the ethical debate here, I just want value in my purchases!

EDIT:
I think we are finally starting to get somewhere! I think we were viewing this through different lenses.

 

I paid for a college degree. I learned at college. I know ask for a higher wage because of my knowledge. I get it!

I'm really poking a stick at how to break into this "club", if you will, of dealers that give each other greysheet prices? I understand they do business a lot and spend money with each other. I'm willing to spend some money with them but I do not want to give it away in a feeble attempt to "purchase respect".

 

"I just want value in my purchases". To this, sir, I would have one answer, "knowledge". Knowledge is what will set you free. I buy coins all of the time for $40 that other dealers get $300 for. Time, effort, and knowledge of coins is where you can get value in your purchases. It iwll not be just handed to you by a dealer for free, you will have to work at it. I promise, though, if you do you will get value. I look through hundreds of auction listings each week, searching for value, (and for coins I am interested in). I guarantee you each week coins sell for incredibly cheap prices, you just have to have enough knowledge and find out where.

 

But, you said yourself the dealer has a duty to pay a fair price to a little old lady. So in your mind you are also already judging what a "fair" price would be, and in my example of a $5000 coin, I doubt you would be ok for that dealer offering that lady $50. Would $500 be a fair offer to that little old lady? Again, I am not saying I KNOW where the line is, but I believe both of us are agreeing somethere there IS a line as far as the general public, (little old lady), is concerned.

 

First off, to the OP's original statement, I'd say it has a lot to do with your relationship with the dealer. Maybe the dealer has a 10k price on the coin as retail, and would sell the coin to a fellow dealer for 5k. If you can develop a relationship with that dealer, perhaps they would even share with you what they paid, and your offer 6k would get a much more favorable response. By putting 10k on the coin, there is a chance that the dealer will attract somebody that can't live without that coin and is happy to pay the 10k. Goodness knows that I've paid a premium on a coin that I really like.

Insofar as ethics go, I'd probably side with GDJMSP. If somebody makes an amazing profit on a coin they bought for cheap because they noticed something that others did not, more power to them. It happens all the time with variety collectors.

Personally, I've spent a lot of time studying coins over the past few years so that, when the time comes, I can ID a rare variety in the series I collect. It's what makes this hobby exciting. Now, I'm not nearly as good as some, but the time and knowledge I've devoted to study is valuable and because of that, I will not feel guilty when I pay the sticker price for a coin that I know is a rare variety. If the seller didn't put in the hours of study that I did, that is their problem.

I don't mean to sound callous. I've never had little old ladies attempt to sell me their dead husbands collections, or anything of the sort. I just appreciate the value of an education, whether it be on the topic of coins or anything else of value.

*edit* I'd never fleece somebody on a deal (like little 'ol grandma). I'd break out greysheet and give them a basic understanding of what they have. Personally, I think that is the right thing to do and would do it EVERY time. My post was mainly geared toward ebay, coin shows, dealer websites, etc.

 

I whole-heartedly agree with your entire post. As I stated above, I paid for a college education and earn a higher wage with it. If I spend my money on books and time and read like I do, then I am entitled (ethically-free) of making a profit identifying a rare variety or what have you and acquiring it fairly (not lying or deceiving the seller but recognizing a great buy when the opportunity is presented).

I've bought collections before from people who inherited a collection. With each one of them I explained the "value" of what the coins are worth retail and then offered a price back from that as my profit. Some accepted my offer, but sometimes they walked. Sometimes people are just trying to learn coins themselves. I explain that some dates are worth more and point out the rare dates for them (I do not really get into variety types with them on whole collections). This I feel is the right thing to do. They asked for me to appraise their coins; so I do this as fairly as possible.

I have also purchased a rarer date coin of a series without pointing it out if the seller just offered it for sale at a normal date price. In that situation I feel no obligation to tell him that he/she should ask for more money. If I am at a show and see a reeded-edge 1836 bust half for $50 in a tray, I purchase it and walk away. In these cases education pays.

I believe the difference in the above scenarios answers the ethics part of the thread that was brought up.

 

Depends upon the market in the dealers area for said widget.

Dealer A, has a over abundance of widget A with and there is an overflow in his area.

Dealer B, has a shortage of widget A, but has a high demand with limited supply.

Dealer A buys widget A but has to sit on it for 6 months before being able to recoup his money and make a profit. But dealer B comes along and buys multiples and quantities of widget A from dealer A. Dealer A moves them at the lower cost but above his base price and frees up money.

You ask Dealer B for a lower price but if he has a market for them in his area why should he lose money.

Customer walks in wants 1 widget A from Dealer A sells it at retail because he needs to make a profit and pay bills while he still has money tied up in the other widget A's.

If you want better pricing get a resale # and buy in quantities that will get you the lower prices