Where do dealers get their coins??

I went to a local auction last night, mostly because they had some Morgans and UNC Franklins. I figured I'd be bidding against a knowledgeable collector or two, but probably not any dealers as there aren't any in my town and the auction house is too small to attract specialized dealers from out of town.

It's amazing what some people will pay at an auction. The Morgans were all avg circ and there was an 1878 with heavy gouges on the obverse. They went in 2 lots of 6 or 7 each, times the money. $30+ for each, more than you'll probably pay for common date UNCs from a dealer, and these things were about as far from UNC as a dog is from a cat.

I won a lot of 18 buffs, sight unseen, for 60 cents each, thinking that hopefully there'd be something I could use. I just couldn't let the 50 cent bid stand. Well, I've been looking for an excuse to get a new bottle of nic-a-date, now I have one...

 

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An ignorant crowd like that is often the case and it can be frustrating, but such is life. Don't overpay because of someone elses foolishness, especially when often those coins are whizzed.

Ruben

 

"Buy low, sell high"

You may have read that quote by Bernard Baruch, the renowned twentieth century government adviser and stock investor. Coin dealers work on the same basis.

 

I agree. More importantly, it's irrelevant - for many reasons.

For one thing, it varies greatly depending on what type of coins we're talking about. The closer a coin is to "commodity", the lower the margins i.e. low gold, common Morgans, modern bullion all tend to be high volume, low margin. Maybe 5% - 10%.

Also... the more numismatic skill is involved, the higher the risk and the higher the rewards / margin.

For instance - at ANA Nationals, I talked to a dealer who had someone walk up a while back and sell him some raw $5 Indians at $300 each. He had one graded and it came MS64. That's several hundred percent margin.

 

To a buyer, margin is largely irrelevant. To the buyer, what is more important is fair market value in today's conditions.

Hypothetical case : a dealer bought some Low Gold coins 7 years ago when spot was $400 ish. It's almost triple that today, so the dealer's margin is 200% or more. Is that fair ? I think so.

Here's another reason why margin is overrated from a buyer's perspective - I assure you most dealers have taken a loss on certain coins. Is it fair for a dealer to get hit with negative margin ? Yes, it is. "Stuff happens"

 

If you ask, you probably won't get a straight answer. A friend of mine inherited a nice collection, and a local dealer low-balled him and had the gumption to say he only makes 10%.

His nose should have grown a foot!

 

...which is only 10%, right ?

 

I was only looking for resale, possibly a temporary hole filler in my Morgan album if one of those slots was empty (probably not).

I have a pretty fair amount of knowledge about grading and values, and I didn't expect these to go over $20.

The only foolishness on my part was those Buffs. But... some are mintmarked, hopefully when I get the nic-a-date I'll fill some holes in my junk Buff set.

 

I've been to at least a dozen "estate auctions" and "confisgated goods" auctions, and have never once seen a deal on any coins... almost all go at retail plus, most are common... Local estates auctions - don't waist your time folks. The auction companies DO know they are selling,, and they WILL cherry pick any nice coins or ensure an inside bidder in out there to push the price to what they want.... thier "reputation" is not a concern in the least..... there are far too many suckers out there that come in with a little bit marketing > "ESTATE AUCTION - GOLD COINS !".. "CONFISGATED GOLD".. "NO RESERVE"... haha.... what that translates to is.. "here kitty kitty kitty,,, warm bowl of milk for you kitty kitty kitty". Again, don't waist your time with the local yokal estate auctions. You'll have better luck spending the day going to home garage sales or the flea market or surfing ebay.... or finding the Easter Bunny... good hunting, and HAPPY EASTER ! Peace and Joy to all.

 

I went to an estate sale in NW Fla 6 or 7 years ago; got a 21 Peace and a bunch of other silver for basically spot. All they knew was silver, nothing about dates. It's worth checking them out, but don't expect much.

However (comma) you may get lucky!

 

There's nothing wrong with estate sales especially when XF large cents are selling for $5 a piece...:smile:smile:smile

 

All the auctions around here have very energetic bidders. They overbid for everything. Most of the time I can't even bid because the bids are already past what any lnowledgeble person would pay.The only time I was able to win something of fair value was a box lot of foreign one troy ounce silver in Littleton display packages.
My final bid including fees came to $16.16 per coin. That lot included a Maple Leaf, Libertad, and Britannia.
I firmly believe the other bidders did not have a clue as to what these coins are.

 

None of the dealers I frequent seem to have any money so I'm not sure most of them have figured this out themselves.

 

I am the apprentice for a PNG dealer who is known as a "dealer's dealer". The way that he gets coins is through other dealers, who in return acquired them
off of the general public or from an advanced collection. So if you are a prominent dealer who knows collectors, you will also have access to large collections.
Now, some dealers buy straight off the floor at the local coin shows or own stores, and that is where they get anything from rarities to pathetic crap, so in the
dealer's world, coins come from not only museum quality collections, but also from the streets. If you have any other questions feel free to message me. -Matt Draiss

 

Where I live, a lot of dealers get their coins from strung out drugheads who steal their grandma's collection of coins and sell them DIRT CHEAP to buy meth!!!

 

Wow- this Necropost brought up a lot of old memories . I can say that nearly 5 years after the last time I posted in this thread I am still 15 lbs heavier but a **** of a lot wiser . Most of what has been stated in this thread still rings true . I am still with the same company now I just have less time and more demands . The coin industry is a tough place and if you think you have an inkling that you will make it "well" with just even a few years experience you are seriously kidding yourself . It takes way more than most could think to actually be suscessfull .Good luck to those who try with the hope that you have the right mentor(s) to make you a success.

 

2 year old thread? Some things just remain the same. Short answer? Dealers get their coins off o' HSN or Coin Vault.......


Don't quote me, and please, by no means take me seriously as I'm over my limit......

 

five years late and that is your contribution to this thread? Very sad.

 

One of the cardinal rules I hear from dealers is KNOW WHAT YOU'RE BUYING. Thus, the price for random lots of coins is usually very low because they want to sell them the same way they bought them. They also like better coins because they usually have buyers already lined up for higher quality coins.

 

This thread sure is one interesting read.