I would describe as "one way" dealers those who are absolute low ballers and chiselers when buying but when selling they are high retail unless they have come to the realization that they aren't going to sell the item. I'm thinking of one dealer who I sold a nice cc Morgan recently with lots of eye appeal but he found every tiny thing that he thought was wrong with it and would only buy around Bluesheet. He tells me about a lot of coins he buys for $30 or so that PCGS grades as $300 and up coins once he dips them, etc.. Another coin he told me he had around $1300 into, an 1871-s $20 that graded AU53. He sold it to a customer for over $2200! What effect does this have upon hobbyists when they realize they paid way over retail even? How common are the "one way" dealers in numismatics who do not follow reasonable buying and selling methods unless they are making huge profits?
I think we as buyers do the same things though. We look for and expect dealers to give us great deals on coins, but then when we sell to them we demand top dollar. Well, if they pay top dollar they can't very well turn around and sell at a discount. So, they compromise somewhere, even if we see it as something else.
Define reasonable? What's reasonable to some is not to others. Some markets define reasonable profit percentages between 7-10%. Others 30% and still others, 100-200%. This hobby has truly free markets with ample supply, multiple distribution/sales channels and relatively transparent pricing. I'm free to purchase from whoever I choose and if a dealer/sellers business practices don't align with my own as a buyer, I just don't patronage them.
I try to buy coins I wouldn't mind being "stuck" with if they didn't sell, whether because they are particularly difficult to find, possess a rare attribute, or are especially appealing. Consequently, I don't feel as though I'm being unfair charging seemingly high prices for them if someone else wishes to own them. I don't think, in those cases, that I'm shooting for the moon, but I might well be in the neighborhood of the higher recorded sales of such coins. On the buying side, as much as I like to think that I'm eminently fair with sellers, there certainly have been at least a few transactions over the years where I bought more favorably than I should have. I think we've probably all been there at one time or another. In your post, I think you are probably referring to a buyer / seller whose modus operandi tips the playing field un-waiveringly in his favor, and yes, I agree . . . there are those. I refer to them as Flashes-in-the-pan. They will have huge near term profits, but no longevity in the business. Wary buyers will make sure of that. Such dealers can prey on unwary buyers only until they exhaust the generous supply of unsuspecting buyers.
So the guy purchased a coin for $1,300 and resold it for $2,200, sounds to me like a dealer that knows what they are doing. Kudos to that guy
when selling to dealers they will NEVER give you a retail/guide price on a coin. always 10-40% lower because they have to make money on a coin. it also depends on the coin and rarity.
No one is ever forced to buy. No one is ever forced to sell. If you don't like the way one particular dealer operates, move on! Chris
Couldn't agree more. He is in the business to make money not to scrape by. I personally like to get the best deal I can, but if one guy won't budge I would just go somewhere else. As long as the dealers are not shady, he has all the right in the world to maximize his profits. And that's not callous towards Owle's original post where I understand where he is coming from too.
Excessive pricing does not help the hobby. With all the extremely useful pricing information available for free via Heritage Auctions and other sites, how will buyers feel when they wise up to the fact that they were taken and royally ripped off? And what kind of a ripple effect do high priced dealers have as the customers talk to their friends and family about whether they got a fair shake or were ripped off? Hobby first and money later. What is a seller's pricing based on? So you need a rationale for whatever $$ was placed on a coin rather than the sucker born every minute who is going to realize he has been had.
I had a dealer with a lot of well worn Indian head cents selling them for 50 cents each, well I bought a bunch, and then decided I Liked the series enough to collect them in xf, so I had upgraded 4 at the time, and went to a local flea market where there was a coin dealer I had never done business with. I asked him what he would purchase them for, just as a way of getting to know a new dealer, he proceeded to tell me that IHCs were a stagnant series and he had tons of them sitting and gathering dust so he could only offer me a quarter each, well I was losing a buck, but that is not something I will cry about so I sell them for a buck. Then I say I am interested in Indian head cents, those were some of my doubles and did he have any for sale, I tell him I am looking for xf examples, he proceeds to tell me that IHC are a hot coin, but he has some for sale, and when I give him my list of what I was looking for he proceeds to pull out the same sort of damaged culls I just sold him, I tell him I am looking for xf examples not ag to vg ones, he then starts to tell me how he has been collecting coins forever and I say alright, but I suggest to him that he reread the ana grading guide, He then tells me how he got started in the business by having an industrial accident that his sharp lawyer turned into the golden ticket, forget the company was put out of business, and his fellow workers were out of work, so anyway I looked through some of his junque, and have never been back there again, though I have seen him at another shop, he showed no sign of recognizing me. I would categorize the guy as being one of the many adult children out there, and probably did not realize that for a dollar I found out he could not be trusted like an adult.
The thing is, dealers price themselves into a market, not the other way around. In other words, no dealer will force himself into bankruptcy with a store full of coins because he lost all customers due to over-pricing. They price where buyers buy, and if thats too much for some, so be it, so long as there is one customer for every price. Every business on the planet operates the same way.
Happy as the devil I don't have to act like these guys to put food on the table. Couldn't live with myself if I did.......
Am I getting this right? He buys raw coins that likely have bad eye appeal, dip them and then send them off for grading and turn a $30 coin into a $300 coin. Sounds like he knows how to grade and properly clean coins and he's getting paid for that knowledge.
Are there bad dealers in the world ? Yes, of course there are. Are there good dealers in the world ? Yes, of course there are. Should we complain about the bad ? Well, you can if you want to I suppose. But what good does complaining ever really do ? Does it make the bad ones go away ? If it does I've never seen it happen, never read of it happening, never heard of it happening. One of the oldest stories that any of us has ever heard is that of Cain & Able. That was bad, and there has been bad in the world from that time on. Would it be nice if there were only good dealers ? Yes, of course it would. But since the world is made up of people, it is the way it is. So what do we do ? We learn, and by learning we can avoid the bad and only deal with the good. That's about the best we can ever do.
Plus people can research dealers they may be doing business, with all the online resources available. There are usually "yelp" and "google" reviews. Collectors can leave good or bad reviews of any given dealer. If they believe they have been ripped off they can share their experience. Or you could reference various auction sites for doing research on value so potential customers could check out Heritage, etc. for current values, but will they be able to compare apples with apples? That remains the challenge as most people who have acquired rare coins and currency by chance have no concept how little coins and worn currency could be worth thousands.
In a lot of different situations it has been my experience that people go much farther out of their way to complain rather then praise. I find those ratings more accurate for a lunch restaurant then much else.