How To Become A Coin Dealer?

I know this is a very broad based question. I have a couple of years until I retire. I've seriously been thinking of becoming a coin dealer after I retire--at least a small dealer type. Does anyone have any suggestions how someone goes about that? I know there's all the research ahead of time so you get an understanding of the value of coins--but I'm thinking more about the business side of things. Are there business loans for this type of business--or is that not practical. Are there specific ways to buy coins at dealer rates? Or for that matter is there such a thing as a dealer rate? I guess I'm just looking for ideas how to get started by those of you who are successful Thanks,
Roger

 

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I have my own business, not a coin business mind you. I will tell you that you will probably do best financing yourself. If you can't afford to do it on your own, even on a small scale, that should probably tell you something right there.

 

If I were to start I would go down two path's. Find some local shows in your area, I have a couple within an hour each year. I think table's cost around $20 to rent. Set up there, talk with other dealers, and see what they will sell you.

The other path would be selling on ebay. It will take a while to build up enough sales to so that people trust you, but the fees are reasonable and the customer base is huge.

Lastly, I would pick a specialty and become an expert. Once you start to specialize in coins you begin to see lot's of bargains on ebay. Coins that sell for reasonable prices because non-specialists don't realize what they are. For instance, I collect large cents, late dates in particular. While I don't consider myself an expert, I have been able to cherrypick lots of coins on ebay, then turn around and sell them to collectors who specialize in that area for a little profit. I have no desire to become a dealer, but if I had the time and motivation I am fairly sure I could have.

Good luck in your endeavor if you decide to become a coin dealer. As a retirement gig I think it sounds like a lot of fun.

 

We have antique malls where sellers can rent booths or cases by the month. This may be a good place to start. At least if it didn't work out you could bail on it in a month. At these malls you do not have to be present in order for your wares to be sold. They have full time staff assisting buyers during normal business hours.

What if your first customer is someone wanting to sell their collection? Raw.

 

Someone, I can't remember who, once said that if you want to become a coin dealer, you need to spend $2 million to build an inventory of $1 million.

Chris

 

My other piece of advice would be to have a firm handle on understanding financial statements (P&L, Balance Sheet) and keeping accurate records. These are your report card and will tell you where you are succeeding and where you are failing. Without these, you are flying by the seat of your pants.

 

I have heard a similar saying. "The best way to make a million dollars in the coin business is to start with 2 million dollars."

1. I would not recommend taking out a loan to start your coin business.
2. Set up with another dealer at some coin shows. I would recommend small-medium size shows, 20-50 dealers. You could even assist them at a show to get an idea how they operate before you take the plunge.
3. Start small, buy and sell products (coins) that you have knowledge about.
   
4. Be honest, with yourself and others.
5. Build relationships with other dealers & clients. Sometimes your best client is another dealer.

 

You will definitely need to learn how to grade very proficiently and know the market price for the grade. If you advertise (which is a great expense) the stock will find you. I've never been in an established coin shop that didn't have just as many people in there trying to sell coins as there were buying coins. If you are honest in your purchases and sales, you will be long lived. Know what it would sell for and buy at a price you can make an honest profit when you sell.

 

I like this response.

Personally, I would say do not start right off as a dealer. Do you know which products are moving and which are sitting in everyones tray as dead stock? Do you know what kind of discount off of list you need to pay? Buying right is as important if not more so than selling. I would say it is silly to try to start right off as a dealer. You should go through an apprenticeship. Find a dealer who sets up at shows nearby who needs help. Offer to work for him for little or no money. What you need sir is KNOWLEDGE, knowledge of a lot of things dealers do that right now you do not. Even if you work for free with this other dealer I cannot thing of a higher financial return. You have two years before retirement, spend them learning about the job you wish to have as a retiree.

Then, after you become a dealer, the learning just continues. As a dealer I feel no compunction on cherrypicking you to death. You know that collection you bought last week? Well you just put out for sale a $1200 rare variety with a $100 pricetag. Do I feel bad you missed it? Heck no, as a dealer you are a presumed expert. So, every single mistake you make underpricing coins you will lose revenue. Again, it will come back to knowledge, this time coin knowledge. Most dealers I know are very knowledgable coin people, if anything this is for self preservation, making sure they are appropriately marking up coins they buy.

 

buy a grey sheet.

read it.

Then learn to grade

 

Making a million dollars on a 2 million investment is actually a pretty darn good return on investment. I think almost any dealer would be stoked with that kind of return.

 

Start small like I did. Buy and sell coins you like. I buy what I like at the best prices I can, then hold them until I get a decent offer. After several years of buying and selling, I can see when we are in the highs and lows for certain coins. I buy more when it is a low, and sell them when it is a high. I would not get a loan or go into debt to do this. Buy what you can afford.

 

He didn't say return - you start with 2 million and finish with 1 million. Now are you stoked?

 

He did say MAKE a million, not end up with a million, so this guys response was actually right.

 

I don't think you should be a dealer.

Chris

 

Its an old joke. The oldest version I ever heard of it was "How do you make millions in aviation? Answer, start with billions". I bet you there was a railroad version of it 100 years ago, I just never heard it personally.

 

Never visited this site.

That's about the size of it!

Chris

 

I think my local deal makes as much, if not more, on gold and silver. They offer the best prices I have seen. Yet they make it off volume buying and selling. You need a lot of on hand cash for that. I think to become a dealer you need to start small as mentioned and slowly work your way up. And you can start now - by the time you retire you might be able to make extra off what you do have. There was a post by Mark Feld that recommended selling even if you were just a collector. I need to go dig that one up. Since then I think I now agree with all his point.