How does a dealer stay on top of their inventory?

If a dealer has a store for instance and it is just loaded with glass cases of this, that and the other, how do they know if something in there may or may not be a cherry picker item? I mean there are so many things that could be rare or errored etc. etc. I am basing these questions off of a local dealer that I have found, (nice guy, been in the biz for 30+ years) and also from all of the posts that I have read here about die cracks, errors, full steps and ALL these other things that could potentially bring more money for the coin or take away from the value of a coin, such as fake toning, "doctoring" coins etc. It just blows my mind. Even paper money. Granted I would say a majority of the store has things in slabs that have been graded, but there are drawers and file cabinets and trays etc. with all kinds of other items in the mylar coated 2x2's.

Let's say someone comes into a dealers shop with alot of coins from any number of different circumstances. Death in the family, just wants out of collecting or maybe even stolen. How does that dealer make a judgement on what he will pay for those items? I guess what I really want to know is how would he memorize all of the possibilities that that particular coin or paper could have. Granted I am totally new and this person has been doing it for years just like alot of you have. It's just more than I can get my mind around.

Which then brings me to the question about the tubs of coins on the counter that he has with ancients, world coins and tokens. Is there a chance that someone could score something good out of those tubs seeing how most of this store consists of U.S. Coin and Currency?

Has anyone ever beat a dealer at their own game by finding something in the local coin store or even at a show that ended up being something really rare?

 

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Frankly it is not worth it for them to always cherry pick any more than it is for most collectors to go through all their pennies looking for wide AM cents. Its a business for them, not a hobby, and their goal is to buy low, sell high within the limits of their time and energy.

Ruben

 

I suspect you only mean coin shops, not dealers at shows, flea markets, homes, etc. Probably all have different methods or none at all. For example I know a coin dealer at a flea market that has no idea of what he has, where it is, how much it's worth and probably what day it is. I know a dealer that does only coin shows. His inventory changes so dramatically and constantly, that he has little idea of what he has for inventory. Many times he has told me I have one of those somewhere, maybe, might have or I sold it, not sure.
Another dealer at coin shows has a so called bargain box. When asking what is basically in there he will say just coins, no idea past that.
A coin store must have or should have a better idea of what he has for inventory since there is that tax stuff to worry about. Also, must know how much profit he is making so he can pay his bills. And at a coin store there may be well to many invaluable coins to worry about the one that got away.

 

Read this thread and I would guess most every one on here has a similar story;
http://www.cointalk.com/forum/t41868/

 

And one more thing I just sort of thought of. Your question would also depend on how long a person has been in buisness. That to is usually true of many, many buisnesses. I know a computer repair place that when you look at the layout you would swear he got hit by a tornado. I highly doubt he has any idea of what is there, now many, thier sizes, age, etc.
I'm not a dealer but I too realize that time makes for a poor memory. I've been collecting coins for well over 60 years and have very little idea of what my collection contains. For instance I know I have about 30 to 40 rolls of steel cents but exactly how many is unknown. I know I have many, many rolls of Mercury Dimes, some also in 2x2's, and 12 Whitman Albums of them. But the total is a mystery for whoever ends up with them someday.
I would suspect a coin store is a little better than me but if in buisness a long time, possibly not.

 

Interesting question for sure and it varies from dealer to dealer.

My boss has run a shop for 42 years now and I know he's been cherrypicked on occasion but as Ruben said buy low sell high.
Organization? What's that? We know where the "big stuff" is but I literally trip over other stuff at times.

A good rapport with your customers can really help in not getting severly cherrypicked. We do look for the "big" errors but frankly don't have the ime to look for the small.
Years ago I was browsing through a box of "stuff" and noticed a 39 Double Die Jefferson. Told the owner (now my boss) and he said sell it on ebay and we'd split. Cool I made some money, he made some money and I remained in good standing.

We have a customer that specializes in tokens. He'll tell us if it's scarce which in turn usually gets him a BETTER price.
We have another that buys wheats at 5 cents each, searches them then sells back at 4 cents each. He's found some good varieties that we have no time to look for so it works out for everyone in the long run.

There was many a time when someone would walk in with small size U.S. paper money and I'd be there as a customer. He'd hand it to me and ask if he should buy any. Then he'd let ME make offers and that's a privilege in any shop.

Get to know the speciallists and give them good treatment and they can be very helpful.

Any shop would LOVE to be able to scrutinize ANY coin that walks in but it would be impracticle. I sort through "junk silver" when I have time and then usually on a hunch by the wear patterns I see.
Best finds to date are a 16-D Mercury and 32-D and S Washingtons. I can only imagine how many good coins he has sold in bulk.

 

This post reminded me of when I was getting engaged a long, long time ago. In the center of Chicago there is building with virtually hundreds of jewlers that deal with, sell, buy everything imaginable. Most to jewlery stores or big department stores and most people can't get in there. Someone I know got us in to some of them. At the one we finally decided on to have the wedding rings made I mentioned to the person there that I think I see some glittering on the floor. He said those are just small diamonds and we loose lot of them all the time.
I suspect this is true of any buisness that has been around for a long time.

 

They buy it with roooooooom,

How does that dealer make a judgement on what he will pay for those items? I guess what I really want to know is how would he memorize all of the possibilities that that particular coin or paper could have.

They buy it with roooooooom, in other words they leave themselves very little chance of losing any money.

I think I understand what you are asking and this like anything else in life has many variable answers but here goes.

1. When they buy they write it down and then they code it - look on the back of 2x2's and see if you do not find a sticker or writing something like, GLI.EE - that is their code for what they paid. Come up with a 10 letter word that does not repeat itself and you can have one too, each letter corresponds with a number 0 thru 9 (hint-don't use campground everyone knows that one).
2. They use the GraySheet and always buy 10% back of bid or more for modern stuff and mint and proof sets, sometimes 35% back. If you buy at 10 back and sell at ask you automatically make for 15% to 20% on every item.
3. Most dealer do not know much about errors or varieties - if it's not in the Red-book they generally don't know. Plus most minor errors actually take away value from good collector coins rather than add to it.
Always remember that if a coins numismatic value is high to begin with any error of variety on it will not increase it very much over it's already high value.
4. They do this for a living and they get good at it - with a retail shop they don't have to pay very much for most common stuff as it is a dime a dozen and everybody has got these modern mint and proof sets along with the modern bullion - ie: (it ain't rare!).
5. They have a lot of stuff already sold before they buy it - let me explain - they have friends who always buy any rolls they get, they have friends that always buy bullion in bulk that they get and so on - by the time the customer that sold it is starting his/her car he is on the phone selling it. ( ie: moving it on down the line)!

One more thing very important - they learn the un-value of a damaged coin.
A coin with a rim ding, scratch, cleaned, or has a problem they discount their buy price even more. This is an aspect that many new persons just don't get for awhile. If a coin otherwise EF-45 and really nice has a rim ding or whatever an experienced dealer will pay on the level of a Fine-20 or so. He has too, that coin, (for that matter any coin he buys) might be there on the shelve 4 years from today not making him one cent i all that time.

Hope this helps you,

 

Now, before I start I want to say I don't think it is in any way an easy task running a coin shop. I do believe however that if you eat, sleep, and breath numismatics as your full time job, you would have a better grasp on every aspect of the business. You must have a passion for the business and have excellent orginizational skills, and be willing to commit to your business completely. I think I could do all of those and still probably not run a sucessful business. Knowing what you have in inventory takes a system that works for you. It is different for everyone, and no correct way by definition to do it. It also takes a decent amount of capital to start a coin business, which I would suspect many of us are probably lacking currently. So, hats off to all of the successful coin dealers out there who can make a living off coin sales alone!

 

My local dealer buys off the condition of a coin. Yet - anything pre-1836 is usually attributed by them for pricing. You can tell by just looking at the prices on two identical coins. They do make mistakes - I still to this day think they misattributed the 1806 over inverted 6, since I got it for about 1/2 of what I had seen them other places. I have talked to several of them about this - some of the major varieties for the 1900's are looked for, but most do not bring a premium for their troubles. My dealer does not mind cherry pickers - in his opinion if they got a steal then they will come back for more.

 

Quickbooks!

Easiest way to keep inventory.

Keeping coins in 2x2's in sorted boxes help but being able to look it up in the PC is faster.

 

I would think it's in the best interest of a coin shop to permit customers to cherry-pick them to a certain degree. As long as the dealer is earning good margins and turning over the inventory, letting the customers walk out with a good deal will probably ensure that they return.

 

Think I posted this story before somewhere. At a coin show on the 15th of this month I noticed it was so crowded they opened a second room for dealers aside from the already full hallway and main room. In the second room a dealer had a box of Buffalo Nickels on his table with a note saying allo hae dates and 3/$1. He was talking to someone and I asked if he looked through them. Kind of irritated he told me he just bought them a little while ago and for what he paid, he will make a lot of money as is. I picked up a few and found one I sort of liked. This time I interupted with what if there is something valuable in here. Again, irritated he said take what you want. I handed him $5 and took 15 of them. As I did, again, I said what if there was a really valuable coin in there. And again, rather really irritated he took my money so I walked away. This is one of those coins.

1937D. I tried over and over but as they say, you can lead a horse to water but you can't make him drink.

 

LOL, Best buy ever! Congrats. Normally you don't find them in lots.

 

Yeah - fundamentally they don't care about cherry picking and don't have time for it. A dealer cares about buying things for a nickel and selling it for a dime in adequate volume to make a living.

Ruben

 

Ah but we have to look at them and grade them but dealers are only human & sometimes over look errors & varieties. I found a Die crack on one of our coins but it's not listed as having a die crack at first you think it's a ding from another coin. But then Die cracks are nothing special or so I've been told.

 

Yes - I agree that looks like a die crack, and possibly a rusty die as well.

Ruben

 

LOL. Ok so how can you tell rusty die? is it all the small chips in the image by the rim?

 

There are better experts here, but I think general porousness of the stamp.

Ruben