If a Dealer can sell a coin for $100 what should he pay?

It all depends on the time it's going to take me to turn it around. Lets say you have 2 coins both worth $100. If I know I can sell one today and I know it's going to take me a month to sell the other one. I'm going to pay about $90 for the one I sell today and about $60 for the one it's going to take me a month to sell.

 

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Guess that's why eBay and other on-line stores have nearly ended the shops ? I know that I do a whole lot better on-line that I can by going to a shop and I think everyone else can too ? I really think the "brick & mortar" shops are obsolete. At least with the pricing they seem to be trying to become so. IMHO

gary

 

There is one thing that brick and mortar coin shops can do better then any other form of coin dealer and that is buy new, fresh coins. Where do you think a lot of EBay sellers get their inventory? I have wholesale dealers who stop by all the time because they need coins to feed their EBay sellers. I was talking to a large wholesale dealer the other day and he alone feeds about 200 EBay sellers... by stopping at B&M stores and buying coins.

 

Mark up formula is Retail minus Cost Divided by retail. So Player11 is working on a 40% MU:

$100 (Retail) - $60 (Cost) = $40 Divided by $100 = 40% mu

 

See http://en.wikipedia.org/wiki/Markup_(business) What you have show is called profit margin.

 

I do business with a dealer who pays 70% of the coins value if over $100. 80% if over $500. 85% if you re-sell it back and the coin value is >$50.

 

Matt nailed exactly what i was going to say (even to the amounts) It all depends on how long the dealer believes it will sit in stock before he gets that $100 for it. And if he thinks it will move quickly and pays higher but it just sits they will often sell it for less than that $100, possibly even less than they paid for it just to keep money and inventory turning. That's because money tied up in dead inventory also cost a business money. It can be better to take the upfront loss than to keep losing money to dead inventory. (money tied up in inventory is money that is not available for making purchases that will perform better.)

 

So toss the grey sheet in the trash, because price is determined by how long the dealer guesses the inventory will sit ?

No wonder eBay is so popular.

 

Hi Rim. One and the same with J.C. Penney. Spent 19 wonderful years with them, 1981-2000. That is their formula for Mark Up!
Steve

 

markup - an amount added to the cost of an item to determine its selling price

So, by definition, markup is related to the cost rather than the selling price. When markup is expressed as a percentage it is calculated by dividing the markup (the amount added) by the cost and multiplying by 100.

Percentage Markup = [Markup / Cost] X 100

 

I really hate to say this and hate even more that it is true. at least in my area. the so called brick and mortar shops are slowly losing the battle to the internet after serving the local population for years and decades in some cases. I have my loyalties to my local shops, folks find it easier to sit at home and shop with no pressure and no BS. Selling well when I say I want to sell something, I know what it is worth and never expect to get that, it's just not how it works, BUT the second a dealer trys those tired old lines on my I say never mind and walk away, I don't need to hear "I've got 20 of those I can't move now" or "their is not much market for these right now". If they are telling the truth and don't want my coins, no problem, me and my coins will go elsewhere or I will sell on the internet myself in an auction and see how much demand there really is. Two if they are trying to set me up to get a coin for a cheaper price,too bad,I am already gone, and don't expect me back as a buyer either. dealer who don't play fair usually don't last very long. Just know they are running a business not a charity.

 

So as soon as you hear the lines you are gone.

Well unfortunately often that story I've got 20 of those I can't move now" is absolutely true. Most coins are actually rather common and the dealer quite possibly is overstocked on them. So in that case what do you want him to say? Just "Sorry can't use it"? Some dealers do say that, and then we hear all kinds of gripes because the dealer wouldn't make an offer for their coins. Too many collectors expect a dealer to ALWAYS make and offer for their coins, close to the guide price, no matter how many they are sitting on even if they have been overstocked for ages. Sorry but it just doesn't and can't work like that. Those "tired old lines" are tired old lines because they are usually true.

Now if you are selling keys or semi-keys in a popular series and you hear them then yes, they're blowing smoke.

 

While I can hate on dealers some too, (posted a thread a couple of days ago about a coin show), there are lots of other costs they need to absorb as well. When they buy your coin, maybe it is a forgery, (lots of those showing up nowadays), cleaned, AT, etc , etc before you even consider how long his money will be tied up, if he can sell for greysheet, and eating. Every good dealer I know has a black cabinet, coins he has bought and had to eat because they are forgeries. Bad delaers do not have these since they sell them to the next sucker, but good dealers do the right thing and take these off of the market. So a $100 retail coin has a lot more expense to a dealer than you may think, and the difference between $100, (if he can get that), and what he pays you is not all profit.

 

Look, if you know a coin is worth $100, why sell it to a dealer for $20-25 ? I mean list it on-line and try to get full value for it. Pay the fees and consider it as if they were a broker. You wouldn't give a $100 bill to a dealer for a $20. I don't think anyone else would either.

gary

 

Yes there are a lot of them that will walk. But a lot of shops have enough of them coming in who won't. Ever wonder where all those ebay listings at 99c come from?

 

It may be easy to assume that but the reality is with a shop you have many people walking in that will sell it to you at your price. You can then instantly sell it on the Bay and make good money. As a dealer I only try to keep slightly more than enough coins and currency to fill up my cases (at CDN Ask plus about 10%) and keep the rest of my investment in a combo of ready cash to buy the right deal coupled with my bullion position and real estate holdings. If your gonna be a dealer forget about being a collector / investor.

An online store has less overhead than a shop but your competing with everyone who is giving away the stuff at bid or opening at 99c. And probably most of those folks have a shop where its walking in at 60% of bid or less. Can be tough considering the fixed costs of online store and variable selling expenses (Bay). A guy I know running an ebay store says he has gotta make 12-15% over cost just to break even. He runs a newspaper ad "Private Collector paying top dollar for coins and currnecy" and sometimes gets some blowout material cheap that way - its hit and miss. It pays for his other hobbies but thats about it.

 

I know that if you want to deal, you cannot be a collector. Each item is inventory, nothing more, nothing less. I took a 1932 S quarter to a local dealer to verify authenticity. Figured the best way to see if an offer was made. I played "rube" and said "I heard these were hard to find?" He told me that he had several "in the back" and they weren't worth the cost of grading. LMAO

Honest trading is one thing, deception quite another. At least in my mind. And it would seem that honest guys get lumped in with the others ? Perhaps a more standardized pricing ?

As to eBay though. I would rather pay 15% in fees than hand it to a dealer for 25% of it's worth. Even junk silver that sells for only 11 times face is much better than the 8x a local dealer offered.
We all would like our hobby to self sustain of course. But the only facet of mine that does is the roll searching. I cannot recoup the cost of going to the bank, but the coins themselves are priced right.

gary

 

You guys are talking in generalities.
Many real collectors would not and do not go to a dealer to sell their stuff at 25% back.
But look at all the people that sell 80% back to "We buy Gold" people.
It's all up to each transaction and each seller and each buyer to agree and to what terms.
Yep I don't sell to someone that offers me 25% back but many many do.

 

I would say a dealer would probably buy a coin for a cheap as he can and sell it for as much as he can. Why shouldn't he? That is pretty much what a used car dealer or antique dealer or an individual coin collector does. I don't consider a coin dealer any different. It doesn't bother me what they may buy it or sell it for, as long as the coin is not misrepresent.

Lack

 

You mean some dealers will claim to be a "private collector" so they can buy coins that sellers did not want to sell to a dealer?!?! Say it ain't so, Joe. Say it ain't so!