A Review on the Coin Industry Thus Far.. by BNB

Leadfoot
You certainly give me another good reason why I need to learn to photograph my coins one of these days.

 

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I can tell you, undoubtedly, that my knowledge/experience with numismatic digital photography has helped me in selecting coins via photographs -- and I suspect that Lehigh (and the other experienced photographers) will agree.

Because in the end there are three variables (other than the coin) that go in to a photograph -- lighting, camera, and post-processing -- and the more you know about each of these variables the better you will be at predicting what the underling coin really looks like.

 

Coin dealers provide a valuable resource in that they create a medium of exchange for the collector. Heritage, Teletrade, ebay, ect have similarities to dealers in that they also provide a medium of exchange. They just lack the face to face and face to coin.

The only thing a dealer can do is hurt themselves if they get caught being too greedy. I personally think a certain amount of greed is good, but going Bernie Madoff greed is totally overboard. IMO it all comes down to caveat emptor and caveat venditor. I do feel sorry for the old lady that walks in to a dealers store with coins worth $10k wholesale and walks out the store with $500, but she should have done her due diligence. On the other hand, if I was in that dealers store at the time and saw that deal go down, I wouldnt buy from that dealer anymore.

Recently, I was trying to sell a few coins at the last show I attended (as a collector) and I wasn't making any progress. Most of the dealers were nice and forthright. I would tell them what I was asking, and about 5 or 6 of them said not interested, or maybe a trade. Some politely said if I came down a bit they would consider the exchange. I finally met a dealer and I asked him for an offer, which was close to my ask ($1800 v. $1775) so we did the exchange and it was a totally pleasant experience.

On the darker side (not really), one dealer was looking at one of my lots and started to tell me all the problems it had. I saw right through that and said nothing in reply, except what I thought it would grade out as and I that it was a pretty nice coin. I suffered him as much as I could, and he didnt make an offer on any coins, just complaints. Bottom line is I knew what I had and stuck to my guns until I met a dealer that would come close to what I wanted. I was always prepared to walk if the bids were not relatively close to my ask.


I would totally advise going to as many shows as you can and try to sell a few coins there instead of on ebay, as you can always do that. It is a totally enlightening experience. Just make sure you know what you have before you start showing it around.

 

Great post! I find myself agreeing with much of what you wrote. One passage in particular bears repeating, because I think it shows one of the 6 numismatic truths....

For those keeping score at home... Lesson to be taken away from this: Never answer a dealer he asks what you want, always ask him for the offer.

In these instances remember this rule: To speak first = losing a price negotiation.

There are always exceptions to the rule, and this one is no different, but more often than not the rule will hold, in my experience.

 

I definitely agree with you with respect to dealers you haven't done lots of business before. But for dealers who I've done many deals with, I just come right out with my price as I feel I'm beyond the negotiating with certain folks. Still may be leaving some money on the table if I'm underpricing a certain coin, but for these few dealers that wouldn't bother me.

 

That's precisely one of the exceptions I had in mind (i.e. when you have a preexisting relationship) .

Another one would be something super-common, like bullion or a Morgan in AU. I don't think you lose much by giving away your position in that kind of negotiation.

But for things where the true value is debatable, to speak first is to lose...Mike

 

I will take the other side of the argument. I believe that in most cases, a seller/owner should be the one to quote an asking price first. If he doesn't have a clue regarding what the item is worth, he should do his best to obtain that information before offering it for sale.

If a would-be buyer is put in the position of having to make an offer, he is often in a lose-lose situation. If he offers too little (even if the offer is fair), he might offend the seller. And if he offers a fair or even strong price, the seller might still ask for more and/or shop the item around.

As a dealer, here's something else I've seen or experienced in making a fair offer.....A seller will shop dealer #1's offer around and end up selling to another dealer (dealer #2) for a minimal amount over dealer #1's original offer. And that is even though dealer#2 wouldn't otherwise have offered or paid nearly that much. The guy who was up front and fair ends up the loser.

So in cases where I do make an offer, I often invite the seller to solicit other offers, but to do so without letting the other dealers know what he's already been offered by me. That way, at least he can see how fair or unfair the other dealers are, when they don't know the price they have to beat. Of course that still doesn't prevent the seller from selling me out for a few dollars, even to a buyer who would have taken advantage of him if able.

 

Interesting concept Mark. I know of one local dealer that makes strong offers on coins he wants/needs or can make a few bucks on. He seems to always make a reasonable offer. The people who know this generally do not shop him. Reason, he makes it clear that here is my offer, you walk away and the offer is off the table. He does have people come back and say ok, he doesnt buy at that point. Strange concept but I can appreciate his thought process after I had ask him why.

His feeling is that he had made a good offer on the coin if he makes an offer, giving the person the true value of the coin at no cost to them. In essence a free estimate. His feeling is that if nobody else matches or offers more, then he has made a mistake and doesnt even look at the coin a second time.

Strange guy and very Ornery, but I enjoy dealing with him because he shoots straight. At least to me.

 

Leadfoot/Mike - thank you for your very nice comment. Having a client who feels that way is about as good as it gets for me as a dealer.

 

I'll take both sides of the argument.

I certainly agree with Mike that it's best to let the other party be the first to throw out a price. But when both parties are thinking that way, someone has to make the first move.

So I also agree with Mark that it's up to the seller / owner to break the stalemate. A hobbyist selling to a dealer has a little edge; they can say to the dealer "You're a pro, you see the numbers every day. You have a better idea what it's worth." Which is OK if truthful. If the hobbyist is a specialist up on the latest prices, it's not truthful and thus unethical. In that case, the hobbyist / seller should put a reasonable number on the table and see how they do.

 

Unfortunately I did not see this Jefferson at auction. I would have been bidding alongside of you Paul. An Absolutely Gorgeous Coin !! I would not have gone to 15 though.

 

I'm sorry, Mark, but you've not convinced me...

That's kind of the point of the seller not offering first, to put the one doing the buying at a disadvantage. I think your nature of fair play (which I happen to share with you in most cases) is getting in the way of maximizing selling price. Said another way, a lose-lose situation for the buyer is a win-win for the seller.

Again, that's kind of the point -- to get the most out of the coin. If shopping around gets you to that point, so be it.

Also, if the seller keeps his mouth shut about the prior offer, dealer #2 wouldn't know what to bid relative to dealer #1. Again, a win for the seller because he has a better feel for the true nature of the dealer and hasn't sacrificed his starting negotiating position by speaking first.

So while I understand (and to a certain extent agree with) your logic, I just don't agree that implementing it will lead to the highest price for the seller....Mike

 

I'm sorry, Mark, but you've not convinced me...

Quote:
Originally Posted by Mark

Feld​

If a would-be buyer is put in the position of having to make an offer, he is often in a lose-lose situation. If he offers too little (even if the offer is fair), he might offend the seller. And if he offers a fair or even strong price, the seller might still ask for more and/or shop the item around.

That's kind of the point of the seller not offering first, to put the one doing the buying at a disadvantage. I think your nature of fair play (which I happen to share with you in most cases) is getting in the way of maximizing selling price. Said another way, a lose-lose situation for the buyer is a win-win for the seller.

Quote:
Originally Posted by Mark

Feld​

As a dealer, here's something else I've seen or experienced in making a fair offer.....A seller will shop dealer #1's offer around and end up selling to another dealer (dealer #2) for a minimal amount over dealer #1's original offer. And that is even though dealer#2 wouldn't otherwise have offered or paid nearly that much. The guy who was up front and fair ends up the loser.

"Again, that's kind of the point -- to get the most out of the coin. If shopping around gets you to that point, so be it.

Also, if the seller keeps his mouth shut about the prior offer, dealer #2 wouldn't know what to bid relative to dealer #1. Again, a win for the seller because he has a better feel for the true nature of the dealer and hasn't sacrificed his starting negotiating position by speaking first.

So while I understand (and to a certain extent agree with) your logic, I just don't agree that implementing it will lead to the highest price for the seller....Mike"

Mike, I didn't think for a moment that I would convince you. While I do believe in fair play, I feel that it should apply to both parties and still think that the owner who is trying to sell something should have some burden to ascertain its value and to quote an asking price. If he can't determine the value, I think it's fine to get opinions and even to solicit offers. But I don't think a dealer should necessarily be put in the position of having to make an offer.

And I don't think it's fair if a dealer makes a fair offer, only to have the coin shopped around and sold at an extremely small amount over that offer, to another dealer who knew what price he had to beat. Yes, it's the best thing for the seller, but to me, that's not automatically the same thing as "fair".

 

I guess I potentially leave money on the table when selling a coin. If I do my homework and know what I think it's worth (not necessarily equal to what I paid + or -), I am happy to sell it. The 10% I lose either way from my valuation point usually isn't significant to me.