I'm looking to help my father take over a pawn shop that specializes in coins. Any tips would be greatly appreciated.
How much does your dad know about coins? Do you have any experience as a dealer? I can't comment on the business aspects of it, but for the numismatic side - invest in a few good coin books (and read/study them). Take a grading class. Learn everything you can about the coin business, because its tough.
My dad knows a pretty good amount about coins. He got me in to collecting and I research a lot. We don't have a lot of cash to start but we do have about 30k or so in inventory. We also have to invest 20k into a bulletproof glass system. I have zero experience as a dealer.
Retail B&M coin sales is dying quickly. The Internet has revolutionized coin retailing, and with all the care I can muster I strongly advise you not to do this. Concentrate on creating an online presence, and budget some of that B&M rent money for advertising. I live in Philadelphia, the 5th largest city in the country, and I know of three places I can buy coins at retail to serve the millions around me. One of those is primarily a jeweler. That's all the city can support. Breaking into a dying branch of retail will not be easy.
We were looking at it as a way of acquiring gold/silver bullion close to spot. And selling coins via ebay
OK, if you're comfortable with your local market having potential sellers that'll be a good revenue stream. Got a decent outlet/plan for the true melt-level stuff? There will be times you'll be buying some which bark to get one that sings. Maybe lot sales on Ebay. Include a quality imaging system in your plans. Your Ebay sales will be as good as your images, and it sounds like you'll be doing a lot of auctions. A dSLR-based imaging system offers tremendous savings in speed, versatility and quality doing this kind of volume. You can do it for anything from about $400 (if you don't mind used equipment) on up. For the record, one pessimistic post is my limit. I'll be optimistic from now on.
Heres an article that i found http://www.coinstudy.com/selling-coins.html Also, its good to get a redbook, also known as a guidebook of united states coins becuase evn though teh prices are not very accurate they are fairly complete and can defintally tell you if you have a key date or a semi key date coin.
I agree. We have three main shops in New Orleans. The one in the French quarter has been around since 1890 and charges really high premiums to tourists on common coins, but also carries some real gems as well. I bought my half cent proof from them. The second is southern coins and precious metals which is mainly an online dealer (and the end location that the we buy gold buyers sell too). Strange shop, nothing on display really, but magnificent coins are in the vault if you know what you are looking for. Dennis (who unfortunately passed away a year or two ago) used to let me go explore the vault. It was a walkin and I was in heaven. He owned a complete set of Stella pieces including all of the aluminum patterns. The third is my favorite shop in the word gulf south coins. Having said all of that, I see little reason for a B&M anymore with the way the Internet has taken over the market.
As the other gentleman said, the Internet is greatly changing this business, but we mustn't forget where a sizeable portion of online offerings originate. There is still a lot of business to be had face-to-face, but it isn't as easy as it once was, and if you're main focus is buying metals, should understand that a LOT was pulled from hiding a few years back and will have at least some effect on business. I'm not sure if this type of thing is what you're banking on, but if it is, you're late to the party. This certainly isn't to say such people are the only option for public buying, but the days of effortlessly filling buckets are over. Similar to what the other gentleman said, your local market will dictate the viability of such a project; if "taking over a pawnshop.....", why is the past owner getting out of the business? His area may have only three retail locations, but this is not automatically indicative of how things are everywhere else. Before starting such a business, you need to DO YOUR HOMEWORK, especially if dropping twenty grand into a bulletproof glass setup (why, if already established, is this an immediate necessity?). $30k may seem like a decent starting inventory, but if the goal in taking over this shop is buying to resell online and you're low on funds, it isn't doing you a lot of good as is. Even $30k total in on hand cash is, to be totally honest with you, likely very low, especially if your plan is to resell online, which is also likely to tie up cash. While most buys are likely to be smaller, larger opportunities do present themselves, and if you can't make it happen, well, you just cut your own throat in more ways than one. Knowledge is KEY to success unless one's plan is to burn everyone who walks in the door, and in which case, you're not likely last long. Even with erring on the side of caution (which will not endear you to quality repeat customers) it's still all too easy for someone lacking in said knowledge to make "unfortunate" moves. You both need to be completely honest with yourselves about your true abilities. It may sound like endless fun to buy and deal with the unknown public, but it isn't always this way and there are a lot of ways you can screw yourself. You also need to be keenly aware of your local laws, but the main point here is if serious about this, you've a lot of work to do and have many honest questions to answer (to yourself).
As others have chimed in, as long as you don't depend on selling coins as a majority of your revenue I think its not a bad idea. I know plenty of similar operations that are mainly open for the walk ins with people selling gold/silver/jewelry/military items and then sell on ebay
CDN's Greysheet seems to be a must for dealers in our area. And serious buyers as well. It's tough selling out the door retail in Tennessee because Tennessee requires collecting sales tax (in our county it is 9.75%) on coins and bullion. That is unless you are a dealer who sets up at flea markets. It is still a requirement but no one is checking up on it.
I'd budget in more than just bulletproof glass for security. An approved-pass entry system would be a good start (ie; buzzing people in), as well as getting a concealed carry license + firearm, a permanent on-site guard dog, floor bolt safes (multiple rather than one large walk-in one), and both obvious and hidden camera systems. It doesn't hurt to be a little heavy handed in showing that you have security in place. Beyond that, if you're looking to use the storefront as a source of coins, you might want to consider advertising and hiring a sign waver out front.
Thank you everyone. If we get the shop would it be a good idea to set up a table at a local flea market?
I've almost given up on buying things from flea markets and antique shops. The junk:value ratio is off the charts. As a seller - maybe? It depends on the competition in the area, the cost of a booth, the security/safety of your items, the type of customers that the flea market attracts, and a number of other factors. If your goal is to buy items, then, no, I don't think a flea market booth will help with that. Perhaps setting up a display at another seller's booth with 3 or 4 flashy items along with your/ your stores contact information would be some effective marketing though.
Sure. And don't forget coin shows! For the store (if it turns out to be a good business plan) perhaps you could hire a trained numismatist?
Very helpful. My father wants to have someone working a table (selling) at the flea market stuff that isn't being sold on eBay or at the shop.
