Just for fun - Guess the dealers offer

That's true, but a $60 offer for the OP's coins can only mean one of two things: dealer has no idea what the coins are worth and didn't bother to do proper homework (irresponsible) or they had an idea of the value and tried to get them for a rip-off price (unethical). Either of these would prevent me from ever dealing with someone again.
Both coins are easy to move, especially in the internet age.

 

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A lot of places don’t do online sales. If the dealer has minimal market for these kind of coins they will sit for a long time in the case. That is money locked up that’s hard to recover. That’s an expense. A smart business man wouldn’t buy such a piece unless they can get it really cheap. That’s not immoral that’s just business.

These are not coins that are collected by a large collector base.

 

They are both quite popular coins actually. Any dealer not utilizing the internet is basically screwing themselves and especially the people they are buying from.

 

You are welcome to your opinion...but there are a lot of local B&M dealers who don't deal with online sales. If they don't have much of a world coin market...coins like this (popular or not) may be a risk for them. As a result, if they make an offer it will be low. This is neither lazy or unethical...it just fits their business model. The seller has the right to decline the offer and leave.

Just like my example from earlier...with my German coin verses a $200 Morgan. Both coins sell for about the same but just about every dealer will pay more for the Morgan because it's an easy flip. Dealers have to decide how much it's going to cost them to sell the coin (and that includes time waiting for the sale).

 

It would take the guy just a few minutes to find out what this coin in such a condition sells for and make an offer accordingly. You don't need to look for a buyer when you know that it sells for $300 and up on ebay or at auction. There is no way to justify a $60 offer on both as being anything other than irresponsibility or greed.

 

"Not for me" would have been my offer on the first one. Maybe $135 on the second one assuming it is original.

 

Um...again a lot of dealers don’t do online sales. I’m not entirely sure why you don’t understand that.

 

That's excellent. Rather than low balling (either out of ignorance, laziness, or potentially greed) on something a dealer doesn't normally deal in, then go ahead and offer on the one and not the other.

If nothing else, if one is a faster moving product and ties the money up for a shorter period of time, that one warrants a smaller 'spread'.

For a more esoteric piece there are the carrying costs of research, marketing, and probably the most significant, the lost opportunity for the capital outlay.

For example, lets say the dealer spends $100 each for the Morgan and the German coin. Both sell for $200. But in all likelihood the Morgan will sell much faster and the dealer will then be able to redeploy those particular funds, and continue buying and selling and making profits. Meanwhile the money spent for the German coin is tied up and though eventually sells at a profit, the money spent there is not able to generate a profitable sales event as often.

The answer to that is a smaller spread on the Morgan vs. the German coin, or to pass on the coin the dealer can't move reasonably quickly. I guess the skill of the dealer is to know what kind of buy/sell spread makes a profit on each type, needs to know the products well enough to make an smart purchase, and how to negotiate this process ethically (or not if that is the choice being made).

So, perhaps add something to the above quote 'I'll pay you $135 for the Morgan. I don't know enough about the German coin to make a good offer. I can pass on it and you can try another dealer, or I'll give you $25 which is low because it's not the material I deal with'.

 

I do understand that very well. Everyone is free to have whatever business model they choose. My point is simply this - if that business model means offering $60 for ~$400 worth of coins because you don't research what they're worth, that is irresponsible. If that business model means knowingly offering $60 for ~$400 worth of coins, that is unethical.
Offering half price for something because of difficulty in finding a buyer is perfectly understandable, but offering less than 1/6th?
It is not fair to the person selling the coins that you offer lowball prices because of "business model". A dealer's choice to do things the neanderthal way is something that they must pay for, not the people selling to them.

 

You are welcome to believe whatever you want. I personally don’t think that offering a low price for anything is unethical. A long as the seller is not being deceived it’s not unethical to offer a price that makes business sense.

I think we are going to have to agree to disagree on this one.

 

Indeed

 

First off, I am not a dealer so not self defending here.

One huge component many people are overlooking is the huge risk of fakes nowadays. This makes it even more important to offer coins to specialists who can ensure coins are authentic.

Let's assume the dealer making this infamous $60 offer is not an expert in these. He may look up that NGC says $400. Ok, but NGC is sky high unrealistic on many prices. So maybe the dealer discounts to $250 retail value if he can find a buyer and if the coin is not fake. He has to balance how much coin he is willing to risk as a total loss, as well as sales expenses, carrying costs, etc.

I am unwilling to call the man unethical for not wanting to risk over $60 if he does not know its authentic and does not know how long he will sit on it even if it is real. Do I think its light? In my view maybe, but I will not call him a thief over it.

I have many Cleopatra VII coins. If I went into a US dealer who has no clue about these, I would expect a similar offer. I can show them online prices, but they would be leery of authenticity, how quickly they move, etc.

All the more important to go to specialty dealers for strongest offers on specialty material. I would would never call a generalist dealer a thief, he is simply not in a position to give a better offer.

 

I have greatly changed my perspective on these kinds of things after having owned my own business for a few years. What medoraman says is correct...there is risk in every transaction. A businessman must decide how much of an expense a given item is going to incur (and that includes things like risk, time, difficulty selling, ect.) and figure out what a reasonable profit margin is before making an offer. There are a ton of small things that go into these decisions.

For me, ethics comes down to intent. Was the buyer trying to deceive the seller or not. If someone brought in a low grade 1893-S Morgan and the dealer told the seller it was worth melt and offered such...that would be unethical. The dealer lied to the seller. However, offering a low price for an item is not the same thing. If I given coin come with increased risk or difficulty to sell...it's going to get a lower offer.

It's up to the seller to decide if they want to accept the offer. In my opinion, no offer is unethical unless the buyer is deliberately trying to deceive the seller.

 

Sounds like you are paying a fair price for a great coin, Marco.

Congrats.

Selling to a collector is always going to net a higher price, because you cut out the middleman. Just a fact of commerce.

 

"Selling to a collector is always going to net a higher price, because you cut out the middleman."

Yet, in many auctions, lots will often sell to dealers rather than collectors. Perhaps the collector did not know about the auction, or mistrusted the lot description and was not able to attend in person to view the lot, or simply did not have the resources available at the time to purchase the coin (but the dealer did).

Many years ago, I was offered a rare gold coin with a distinctive and memorable flan flaw by dealer A at a coin show which I immediately recognised from the catalogue photo of a major international auction. Dealer A knew that I was a longtime customer of Dealer B, who was a well known specialist in that country's coinage.

Dealer A quoted me his asking price, which I considered too high and I made a serious counter-offer which was well above his purchase price at auction, yet below his asking price to me at the show. Dealer A then accused me of low-balling him (!!) and said that I was only making such a supposedly low offer because Dealer B had told me what he (Dealer A) had paid for it. I then informed Dealer A that his accusation was untrue, that Dealer B had not told me anything, and pointed out to Dealer A that he was not the only person in the world who received auction catalogues and prices realised from Switzerland featuring such a distinctive and memorable example of that rare coin.

In any event, I was so annoyed by Dealer A's comments that I withdrew my offer and spent my money elsewhere instead.

 

I am of the strong opinion that if you are not knowledgeable enough about something to the point where you are unable or unwilling to pay a fair price... pass on it. I simply think it is highly unfair for a dealer to hedge their risks at the expense of the people they are buying from.

This was my M.O. 10 years ago when I first started buying coins for resale and it remains so today.

 

But this might not have anything to do with knowledge. It might simply have to do with the dealers market. The dealer may know a ton about a given coin...but if the dealer knows a buyer is going to be challenging to find (and I'm not talking about this specific coin)...that will affect the price they offer. The more knowledgeable they are...the more the price might be affected. The longer the coin sits the more it costs the dealer. That plays a role in the price.

Even with the internet, some coins can be harder to sell.

 

In a situation where the dealer is unable to make a fair offer, they (the seller) should be able to quickly explain the reason, whatever it may be, and let the seller decide if the low offer is acceptable. That shows respect, honesty, and is an important indication of excellent customer service and speaks volumes for the seller, which may result in more return business.
I do realize that sometimes the buyers can be busy, or whatever, then possibly an appointment can be made.
Many variables, that I can see both sides of, for sure.