What Is A Coin Dealer

Took my wife to a doctor today. Saw a coin shop and stopped in. They had one case with no more than $300 - $600 in inventory of junk stuff, i.e. cents and inexpensive mint or proof sets. There were a couple of guys in offices in the back of the small store glued to their computers.

When I got home looked them up on line. They have a large ebay presence and claim that they are one of a few Rare Coin Dealerships licensed to trade on both Coinnet AND the Certified Rare Coin Exchange.

Are they simply auctioning coins at ebay they don't yet possess? Are there dealers now that are really brokers who have no inventory? Is this something we can do ourselves?

 

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A lot of so-called coin shops don't cater to collectors as much as bullion enthusiasts - at least that's what I've discovered in my limited travels. In my area, there are also pawn shops that call themselves coin shops. Those places will have a bunch of junk, as you described: 19th-century dreck, junk silver, a few albums filled from circulation, and all those mint sets from the 70's and 80's that nobody would even bother stealing anymore.

But you have to ask for what you want. It's entirely possible that they've got the coins you want in the back room, or in a safe. One dealer I visited didn't have anything I wanted on display, but when I told him my collecting interests, he pulled out box after box of neatly organized Kennedy Halves - I spent an hour looking through them, and went back two more times.

 

I think to find out the true intentions of the shop, a nice and casual conversation with the owner will uncover what they're all about. There are shops that simply cater to the online presence. I've looked at a web store of some of the local shops that are full of inventory and have a strong eBay following. But when you go into their physical location, they don't have the cases full that you would expect and they have their inventory in a safe or in a different location. It's the changing of the times, online shopping is the robust way to run this type of business if you're not dealing with precious metals.

 

I know its not the same but...My significant other and I own a gaming company (think trading cards/games etc). When we first started up we planned to be 100% online but quickly found that even though we had an inventory of literally several million cards we could not buy sealed product from distributors. Their rules were that you had to have a b&m store. If you had a playing area where customers could play you got a nice discount on product.

We rented a hole in the wall with a table and four chairs and a display case with cards that are worth about a nickel each. The door is locked 99% of the time and people wonder why someones there but its closed. Online sales reach a much broader audience and allow you to move much much more product especially in a niche market. Combine overhead costs etc and for some niche businesses its the way to go. I actually prefer people not try to go to the shop, it interrupts my SO and there is little inventory on site.

So in short I can see why this would happen. And its sad to say but in the time it takes a customer to browse through my goods, and pick out what they want while i stand there to help them I could make several sales and box up several orders. Even though I think this way i would be upset if i went into a store and it happened. If your not going to give good customer service you may as well lock the door and put a sign up saying appointments only.

 

Without the internet, most B&M's probably wouldn't survive, and as the oldtimers who run a lot of these shops pass from this world, you'll probably see fewer and fewer of them. I recall one dealer saying several years ago that if you want to make a million dollars in this business, you have to spend two million.

Chris

 

Company's that don't adapt to changes stand little chance of continuing to prosper.

 

You have to be very versatile to make it these days. I buy and sell my own inventory on Ebay, do a ton of consignment sales and then the cherry on top for me is that I am an expert in both sports cards and comic books so I can sell those when I have the inventory in hand. One dimensional sellers have to be super good at at least one area of collecting to have any chance of making a living....like a guy who is a Morgan dollar expert or is a copper specialist.

 

What the devil were you doing coin shopping? You should have been more concerned for your wife.

 

I think they will always be around, but mainly function as buying shops. Today, the typical business model for a BM shop is buy locally, maybe sell bullion locally and at local shows, and sell all of the better stuff online or through your own mailing list. I have a dealer like this near my house thankfully. Been in the world coin business since the 70's, and is always kind of shocked when someone comes in to buy. He now throws a few things aside he thinks I may like, but you can tell he is not set up to sell retail in any way. I stop by every so often, basically so I get first picks before his WCN ad runs.

I wish there were more retail nowadays in coins, but business is business, and dealers will do what they need to to survive. I do not begrudge them their current business model. I consider myself lucky there is a world coin dealer nearby, most cannot claim that.

 

medoraman,

Have you ever tried to qualify as a dealer to access wholesale prices for coins via Coinnet or the Certified Rare Coin Exchange? If many dealers today are just a minimum BM and are online traders/brokers more than a retail store, why can't the rest of us access this lower cost option? Forgive the ignorant question, but the dealer I walked in to the other day was nothing more than 400 square feet of rental space and a couple of computers.

 

Three things. One, many coin shops that have a heavy online presence will keep the online inventory separate, so they don't sell something in the store and forget to remove the listing. How mad do you think customers on say ebay would get if they win an auction and get told the item sold..oops.
Two, many coin dealers do a ton of business with other dealers, bullion deals over the phone, that sort of thing. So keeping a big inventory for the every once in a while buyer in the shop may not be the most profitable for them.
Three, and probably the most important in answering your question. CoinPlex, and CCE both I think require that you have an actual B&M to buy/sell. Along with a certain dollar amount of inventory. So if you meet the money and inventory requirement, and want to set up an account on either, you would also need to rent space and set up a B&M. I'm sure plenty of dealers do this and never even let customers in without some kind of appointment.

 

The guy who runs the shop I go to was shocked that I wanted to see his coins. He helped me, but afterwards gave me his card and told me to email him my want list. I guess it's easier to search for stuff after hours and have it ready to go by the time the customer shows up.

 

A lot of these guys keep most of the stuff in SDB and the like also. They don't have much of a need to have stock on hand, since they get few walk ins. The dealer was simply allowing you access to his complete inventory versus what may be laying around on that particular day. Pretty common.

 

This thread is making me want to become a 'coin dealer'. Doesnt seem too overly difficult to get started and establish yourself as a reputable dealer. I mean from most of the shoddy online sites ive seen and how over-priced everything is, I feel like I could definitely compete, but you are right it would take utilizing almost all resources available to you in order to make it.

BTW i have retail and entrepreneurial skills, so i realize the amount of work involved, my biggest issue would be having enough knowledge about all coins, but even then i still see very uninformed sellers making it all the time.

Ive been wondering about approaching my local guy and speaking with him about making a deal to remove his clutter coins and start packaging 'starter kits' of coins. Not like the ESTATE SALE GRAB BAGS from ebay, but like real useful beginner kits for young numismatists with a nice variety of things. Rolls, proof sets, IKES, SBAS, wheaties, flips, silver certificates, $2 bills, cheaper slabbed coins, early lincoln memorials, jeffersons, some sort of magnifying glass, choice of whitman (lincoln penny, jefferson nickel, roosevelt or mercury dime, and washington quarter), small silver G-VF examples of say dimes, quarters, and halves, etc. I think this would give me a feel for the market and establish my presence as well as gaining knowledge through inexpensive coin fodder so to speak

 

Me too. Its one thing to become a dealer if it means experience / expertise at grading, brick and mortar, etc. But if you are just a broker purchasing graded coins and reselling them online, it does not seem so intimidating. Especially if they are still marking up coins as would be appropriate with brick and mortar, grading expertise, time on the phone looking for a coin you want, etc.

But if all one is doing is buying popular fast moving graded coins to resell on ebay, how hard can that be?

 

I hadn't really thought about it, but now that you mention it, when I think back to the times I've been in a coin shop buying, I can think of hardly any times I've seen customers come in and buy actual coins. It's mostly people selling and people buying bullion.

 

My biggest draw to selling is to fund MY buying habits. I would like to sell cheaper more common items and lots to fund the purchases of my personal collection. This way it kills 2 birds with one stone, learning about the moderns/commons through selling and learning about the stuff im REALLy interested in through buying.

 

This is what I've been doing for the last year or so. I collect mostly foreign coins, and now that I have a good idea of the type of coin that sells, I go to local shops and browse through value bins, buying coins for about 20 cents each that I know can sell for between $1 and $2 each. It's not big money, but it gives me money I can spend on coins that I can't find at the local dealer without taking money from my bank account.