Just wanted to write a brief article regarding selling coins--it is often pointed out that the sale of a coin is a "losing proposition," and that "you will undoubtedly lose money." That mantra is often repeated here, and in many cases it is the truth. However, I wish to describe my experiences today, after a decision to thin out my collection and sell off the ones that were no longer interesting to me--this was a personal decision, not based on financial need, or desperation--basically, the fact that I felt that I had gone off in too many directions at the same time, and diversified too much. At any rate, I decided to sell off the "moderns" in my collection--commemoratives, US Mint moderns, slabbed high grade ASE coins, and other things like that. My desires have been toned coins--particularly Morgans, Franklins and Kennedy halves. So, I made the decision to cull down the collection. This was not difficult, as it was made not emotionally, but based on the rational desire that I didn't want to keep coins in which I had minimal interest any longer. So, I went to my local dealer, with whom I have had a relationship for almost 20 years. He has reputation for extremely high integrity, and repute in the local business community. He wants "long term" clients, rather than a marginalized profit, and we've done buy/sell business for years and years. I've referred people to him, and he's told me where to find certain coins. So, this was not an "off the street" situation--it was a well-established relationship between two people who trust one another. Also, you need to know my buying habits. When it comes to toned coins, I will spend over value when a coin is something special to me--collectors of toned coins face that reality that it is an "esthetically driven" market, as opposed to a practical one. However, the coins that I sold were NOT toned--they were market value, and obtained from various sources--dealers, eBay, auctions with big houses, estate sales, etc. The one common denominator is that I DID NOT pay over market value for any of them, as determined by Gray sheet (which which I am familiar, and have access to on a regular basis). At any rate, to make a long story short--the dealer and I were able to come up with a mutually acceptable price point where neither of us lost--he obviously made a profit (which he should, as it is his business, and if he doesn't, it is a mater of survival) and I made a profit in the net overall sale. I keep Excel spread sheets on all my purchases, and over a 3 year period, my profit was in the neighborhood of 5.7%. So, a fair balance was struck between wholesale and retail sale, and we were both very happy--I sold off coins that will make someone else happy, and got compensated--he got coins that he can sell and make a reasonable profit. The key to this was--I BOUGHT REASONABLY. Generally, I walk away from 'bidding wars," avoid "impulse buying," and try to get coins that are priced low for what they are, yet not compromising my standard for having a coin that is attractive to me. This has been my "modus operandi" for years, and I have not lost money in a net overall situation. Today, in a couple of cases, I DID lose on individual items--some Australian coins sold way below market, as they don't necessarily resell well. I knew that, and was unsurprised. On the other hand, ASEs and US mint coins can resell very nicely, if they are bought first hand, and same goes for commemoratives. So, overall, it was a pleasant experience--nobody cheated me, and I didn't set out to cheat anybody else. Dealers ARE NOT ALL EVIL. Some collectors see them as "greasy, slimy, grossly overweight disgusting bottom-feeders." That is a horrible stereotype, and I hope my experience helps to contribute to the positive image of sincere dealers and their clients.
I also believe a long lasting relationship with a dealer is key to a win/win deal when buying or selling. My wife and I have such a relationship with a gentleman who at times has bent over backwards in our dealings. As they say, "one hand washes the other."
I did the same thing 3 or 4 years ago. Sold all my moderns - but not all went to the local shop. All my silver eagles, gold and plantinum, etc - most went to the local shop and I made money on them. Now some of the graded modern coins were consigned to dealers and I made money on them. Example was the Smithsonian set - can't remember if it was 4 or 6 coins - but I made about $1000 on it alone. I did not track how much total. This was mostly proof sets, Eagles (plantinum, silver, gold), prestige sets and other modern sets. A lot of it was considered bullion. Then did offer good money on the proof coins. Now last year I consolidated even more - sold almost all my IHC collection and went through heritage. I tracked those coins closely - the coins that went in like the platinum auction I think I only lost maybe 5%. The other coins on Tuesday and Sunday had a worse performance - my total loss was around 9% for all the coins. Keep in mind I bought most of from various dealers. I was happy. I did not want to sell them on ebay - I decided to work with others. Now to summarize what I learned: (1) Best return is to consign with a good seller at a fair price. I lost on some bad purchases and some of the coins were bought when the market was higher than it currently is. And the commission can sometimes be negotiated and it was pretty much about 5% for me. The pitfall was that sometimes it takes a while to move the coins. (2) Using Heritage for choice coins can generate a good return. Just remember the sellers fee and it might take a while to get into a good auction. Plus heritage decided to put the more common stuff in Tuesday and sunday. You can work with them on the auctions and sellers fee - they dropped mine on first call. (3) Using the local coin shop is the quickest method. While on my moderns I made money on some of the classic coins I lost money - no I did not track how much, but I actually felt all the offers were fair. Overall - where I lost money big time was flat out bad buys on my part. I don't blame the sellers - but myself. I think I more know now and will be better. While I want to reduce my loses - I know in some cases it might not be able to be avoided. I do like to buy some graded coins and crack them out for my albums. This is just my experience and yours maybe different. I actually found selling some of it to be fun and exciting - especially watching the heritage auctions.
Good thread Morgandude , there are a lot of good dealers out there once you've found a few it pays in the long run to develop a good relationship . You'll also find dealers that will work with you . Listing all the dealers that I've had a good experience with would take a whole thread and would far out number the bad dealers I've met . Also that may be because if I don't like a dealer I'd rather not do business with them . I'd rather pay a little more with an established honest dealer than to gamble on ebay and usually lose .
I thought I was going to read a few paragraphs on selling coins that were NOT bought right! What about my five dozen Morgan/Peace sliders bought as "MS63" and "MS64" ?!? Looking back I almost gotta laugh --- there was a guy selling on ebay who made a small fortune off me, I kept going back to him as he was "selling off his longtime collection" He didn't disclose the grades, but they were written on the 2x2's in the listing photo(s) Even being new, I should have been a LITTLE wiser... I'm sure he just thought, "Wow, I've got a newbie with a little cash!!" Oh, lastly, when one looks at his feedback he's at 100%... to this day I don't understand that (other than most buyers are not involved in a website like this or educating themselves at all)
More and more, I'm using this website as both a source and outlet for my coins. I do the monthly auction at my coin club (and an occasional eBay for a coin I can't find here), but this seems to be the place that works best for me.
You lost money then, but not much. Just to keep up with inflation you needed to make a little over 9% over a three year period.
He may have lost purchasing power but he didn't lose money. The OP didn't purchase these coins with the intention to make money. Most people that look to sell their coins lose money even many years later. So even if he lost 3% in purchasing power, he got to enjoy all those coins for many year. I'm sure is worth it.
The "official" inflation rate has been running around 3% per year (The real rate is even higher) and the inflation rate compounds so after one year you need to get 3% to stay even after two years you need 6.09%, At three years it reaches 9.2%, four years is 12.55%. Even with 2% inflation after three years you need 6.12% to break even. Purchasing power is the most sensible way to determine if you have made or lost money. Say your income doubles while the purchasing value drops by two thirds. You have a LOT more dollars, but you can only buy 2/3rds as much stuff as you could before. So you haven't made money, you've lost even though you have twice as many dollars. Look at it another way, back in the early 80's inflation was running over 15%, during that time if you got the same salary each year would you say you were staying even because you have the same amount of money?
In this case, "purchasing power" was completely irrelevant to me. The coins were NOT purchased as an alternative investment--I have lots of funds invested in other venues, and do not rely on profit of coins for income--it was purely from a "hobby" standpoint. The other aspect that is faulty in the logic is that this alleged "purchasing power" would have been compounded by interest producing investments, or other purchases that were not depreciating assets. With interest rates generally in the 1-3 percent range, consumer credit at 2-3%, and car loans in the neighborhood of 2%, alternative financial scenarios don't support the "purchasing power" theorem, as interest rates are way below par. This is borne out by the "Sandard and Poor's" index as of recent. During this time, I bought a new house, and a car, so the coins did not in any way alter my "purchasing power," as they fell into the "discretionary cash" category. Given the volatility of the markets, and the fact that this was not my intention in buying the coins in the first place, the only relevant aspect was profit/loss on a net basis. I would not have used the money for any alternative purchase or investment--this was recreationally earmarked in the first place. Perhaps, I could have taken another trip to Hawaii as an alternative (been there 6 times), but I chose to get coins instead. Thus, the only relevant way to look it is Purchase price-Amount realized= Residual profit. There was a residual profit of 5.7 percent during ownership, so no money was lost, (only gained), and I had the entertainment value of the coins during this period.
I hear a lot of talk about these local coin shops. Though I'm not so sure that they actually exist. I've never been in one and never drove past one.
What state do you live in? Since Minnesota passed that new law there probably will never be a local coin shop in that state ever again. Collectors living there will have to relocate to keep collecting because no dealer outside of Minnesota will be willing to conform the the state's requirements for selling coins to Minnesota residents. A dealer I know said he would have to post a $20,000.00 bond to sell coins to Minnesota residents and the paperwork involved is horrendous. Minnesota wants to know who is buying what and how much they are spending.
Good thread. When I first joined this forum a few years back, I also heard the mantra, "Collect coins for pleasure, not for profit." I decided to put this to the test. After all, the world is full of dealers that must be making a profit, so would sound business principles applied to the buying and selling of coins yield me a profit? The first principle is "buy low sell high," so I scoured the internet for fire sales, auctions that weren't getting much attention, larger lots of better quality coins that could be sold separately, etc. I may have won 1 out of 20 auctions, but over a few months, I collected a handful of quality coins at less than market value. Another principle is good marketing, so I took good pictures of the coins, and took some time to compose write-ups concerning their history and numismatic interest. I've discovered that most collectors of moderns would like a few ancients in their collections, but know little about them. Some solid information adds to the appeal of the coins. A third principle is DO THE MATH. I carefully calculated all my overhead: eBay fees, Paypal fees, and shipping, then added a small profit margin, ten to fifteen percent. And I was very stubborn about refusing offers that would net a loss. I only sold a few dozen coins but I made a profit on every single one. Thus ended my experiment, since that's all it was. I already have a profession, and have no need nor desire to be a coin dealer - I much prefer to keep my coins, and was sad to let some of them go. But, as morgandude describes his experience, if you're patient, careful, and DISCRIMINATING, you don't have to lose money.
A lot of states have sales tax on bullion/coins which really puts a damper on coin/bullion shops in my opinion.
Josh they do exist , maybe I've been spoiled by living in Chicago . But you can still buy from these shops as most have internet sales with excellent web sites . Also there are many fine dealers that sell from their homes through a website . CT also has a list of excellent dealers and a number of them post regularly . Use the resources you have as many live in areas like yours .
Agree, most of the money is made on the "buy" side, not the "sell" side of the transaction. If you pay too much, there is little chance of recovering your investment.
A big portion of my collecting budget comes from selling coins I purchase for resale. I know first hand that it is possible to sell for profits. But its like people said, you need to have that relationship with a dealer or a knack for setting up quality photos on eBay. You also need to have an understanding of the market. I would argue that majority of collectors don't really know what coins are worth. I say this because for years I myself bought overpriced coins. Now anytime I buy a coin for my collection I reference at least 3 different items PCGS coinfacts, the greysheet, and Heritage. Only pull the trigger when you've done the homework and you likely will do okay. I also personally believe it's better to invest in slabbed coins if your budget is over $100 per coin because you have the insurance of a grade. I know there is limitations to this, and I know many people don't like the plastic factories. But I know (because I sell mostly raw coins for profit) that the price can fluctuate wildly on them. Grading raw coins is so subjective, especially with 19th century coins. What is beautiful to one person, is details to another. The slab helps mitigate some of this, and this is the main reason I ditched the dansco a year ago.
