Are coin shop owners hurting the numismatic community?

It is not my intent to offend any coin shop owners that use these forums; but I have some burning questions that I think some people are curious about too. How much is TOO much? I went to my coin shop the other day and the guy I deal with is a real standup guy. He has treated me fairly in the past and I would say we have a good rapport. Here are my questions concerning different coin dealers I have interacted with in the past and at coin shows: When silver is low; a coin dealer will say he has to charge you what he bought silver at (and it always seems to be higher for some reason). Ex: I go into a coin shop and spot is 17.58/oz. and I want to buy some ounces of silver but then the coin dealer states that he bought it at 18.75/oz. and has to go by those prices. Is he ripping me off? Or say I ask if he could hold some silver for me and spot at that time is say 17.25/oz. and we agree to a price per ounce BUT when I come back in a couple of days and silver goes UP then he has to adjust the price always in his favor. BUT when silver goes down then he agrees to the original deal? I know that the examples may be the same but I want to get my point clear. It just seems that the HOUSE always wins. If the economy is great the coin dealer wins; if the economy is down the coin dealer wins and WE the small time customers LOSE. Also, how much should a coin dealer make if he sells 1 oz. of gold? How much or percentage is fair. How much over spot? Many times gold exchange stores REALLY RIP people OFF....l have seen them buy gold from an educated person for $700.00 an oz. and turn right around and sell it for spot and make big profits. I always used to tell these individuals to go to your local coin dealer, but now the local coin dealers are getting just as bad. I know many people will respond that coin shops have bills, over-head, etc. BUT come on...when is enough…enough? I think that it is hurting the numismatic community as a whole and I would like your ideas on how to change this so that everyone wins. I can of course take my business elsewhere; but this does NOT solve the overall problem. Does anyone have any ideas or suggestions? What are your thoughts regarding this issue? Thank you in advance for your replies.

 

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More of a bullion issue than a numismatic one...

Yes. The only relevant spot price is the day of your transaction. (He doesn't buy from you based on the price you paid, some time in the past.)

 

The city where we used to live (in Florida) there were 4 coin dealers. Each was pretty fair with knowledgeable people. But, I saw each of them take ridiculous advantage of people that were new or really uninformed. That soured me so much that I would never go back to any of them and am reluctant to find any dealers here to support. I am not exactly happy with that because I want to see new people enjoy this hobby...

 

My dealer will do the same thing. I have a strong rapport with him, been doing business for 3 years running. If dealers are invested at a certain price then they need to make money off their investment. Like you said they have overhead to pay for. Do we know that they haven't fabricated a price they claim to have purchased their wholesale at? It's a possibility. But at the end of the day they are in business to make money, and they make coin collecting cheaper, sparing you and I from shelling out on FEEBAY or retail for every coin we want. I only wish there were more dealers in my area. I guess each and every dealer has an idea over what profit margin they need to see, just like you would if you sold a coin from your collection. If the market continues to pay him X percentage over spot, then why would he/she take less when the demand is there at a higher rate? Just some food for thought...

 

Coin shop owners take just as much commodity market risk as collectors do in their transactions. Of course they want to sell their product at the highest price possible. the problem is, too many of us refuse to walk away in the face of such games.

I think this is a pretty universal problem. If folks spent more time trying to be a better consumer, we would get much better product / service.

 

Where else would you buy your coins? Ebay is hit or miss and can't give you everything. From my personal experience I have found coin shops to almost always be the cheapest options. But I never just buy bullion. My favourite local dealer knows my dad and I really well and he always knocks down the prices for us. But he is a jeweler by trade and does coins more for fun.

 

If the house doesn't win most of the time, it won't be able to stay open.

Having said that, though, any dealers who bought a bunch of silver at $30/oz and refused to sell it at a loss probably aren't dealers any more. You sometimes have to sell for less than you paid, if that's the way the market is moving.

 

I completley agree with you. I understand coin dealers want to make a profit but sometimes you have to take a loss to get more people into the doors. You see I can't complain with my coin dealer...he gives me a $1 off spot when I buy silver and he rounds off a lot in my favor. EX: If the price is 37.52 he will charge me 28.00. He just does things like this. Sometimes he lends me money at NO interest and I pay him back on Payday. Sometimes I leave a couple of 10oz Englehards with him in return for cash. As long as I pay him in time or ask for an extension he holds the bars for me until I am able to pay. He evens trades with me and uses the Greysheet value to pay off a loan. So sometimes he has to make a living and charge me what he paid for at the time he bought and that's ok with me as in the overall scheme of things he is MORE than fair to me. I worry though that this will make him go out of business. He has a shop for fun only. He won the lottery and doesn't really have to work; but he loves the hobby so much that he has a shop. I am lucky to have him as my dealer. I have seen MUCH MUCH worse. So I guess in the end, for me, everything pans out.

 

This is the most important thing said so far. The title of the thread is not consistent with the OP's first post.

 

If you want today's bullion price to buy, what about Kitco? It has been awhile since I used them but I was able to "guess" at where the bottom was in any cycle and buy.

 

I dont understand this thread. If you dont like how they do business, go somewhere else.

If i think prices are too high at a retail store, i go somewhere else. I dont waste time questioning their margins and overhead.

 

Virtually every example presented by the OP had to do with bullion and not coin collecting to which I say, when you buy silver at $48 per ounce and then sell when silver is at $24 per ounce, you're gonna lose.

On the other hand, would "you" sell the silver "you" bought at $3.00/oz for $3.00 per ounce when silver was actually at $12.00 per ounce? Or $24.00 per ounce?

Does this hurt coin collecting?

Not at all.

Is it bad for the hobby?

Not at all.

 

Since it seems your mostly referring to bullion, use the online shops like Provident Metals, JmBullion, Apmex ect. They operate on much lower margins than most local coin shops.

These places aren't great if you are looking for numismatic coins, but for bullion they are awesome.

 

*When you mention coin shop owners and gold exchange stores in the same paragraph, I think you do a great disservice to the coin shops. In my experience, gold exchange (gold buyers, cash4gold places, etc) employees will quickly try to figure out how much you know about what you're bringing in. If they think they can buy $5,000 worth of gold for $500, they will. Most coin shops I've been in won't be quite so unscrupulous - because they have usually been in the same location for decades, and they care whether customers think they're ripping them off.

The only thing I've noticed about certain coin shops that I think is bad for the hobby is not letting customers actually pick out which coins they'd like to buy. I've been in some that have tailored their customer service to the people who come in and say, "I'd like a 1970 mint set." and they hand them a 1970 mint set...and the buyer doesn't even look at the coins. When I say, "I'd like to look for a nice 1970 mint set" and you can see a stack of 15 of them, but they only let you look at one...to me, that's bad for the hobby. (This goes for whether a customer is looking for quality coins or cherrypicking varieties...)

But, once I figure out a store is like that, I just don't shop there any more. If they are charging more for silver than you can get it for elsewhere, why not take your business elsewhere?

 

This is your opinion...and I have no problem with that...some cities may not be as large as the one you live in...so that option may not be a viable one as there might only be one coin shop in that city. This thread was posted to get people's thoughts on what can be done to change things so everyone is happy. Your comments are not condusive to solving the problem. Its your opinion...just like my return comment is MY opinion and like you said ...you can go somewhere else if you don't like it. Have a great day.

 

Bullion falls into the numismatic catergory in case you forgot.

 

There is no way to "fix the problem". Maybe you could try and start your own chain of coin shops that only charges fair margins. This would put the "unfair" guys out of business.

 

Wrong on both counts. It can be about bullion, raw coins, certified coins, etc...anything to do with coins, silver and gold in general. Why is everyone hung up on this thread is only talking about "bullion"? The abuse some coin dealers partake in DOES hurt the hobby. And once again...this is just my opinion. YOU dont have to like it and you can choose not to respond. Either way...at least we can hear different points of view.

 

I see your point. I only mention it because I am seeing more and more coin shops copy the tactics of some gold exchange stores at least in this part of the country. I think this is happening because it is becoming harder and harder for coin shops to make a profit in this weakened economy. I see more and more bartering in coin shops. I see more and more trading to acquire a coin that a collector wants. This is good. I just see more and more people looking at coins purely from a financial point of view rather than a love of the hobby point of view. And this is their right, I don't have to agree or like it...but it is there right. The hobby of collecting coins has changed drastically over the years and in my opinion not always for the better. Thank you for everyone's comments. Whether you agreed with me or not...I really enjoyed everyone's input. Thank you and enjoy what remains of your day.