Prime example. http://www.greatcollections.com/Coin/170570/Canada-1944-Five-Cents-NGC-AU-55 That coin books for $1.50 in Au-50 and $6.75 in Ms63. After paying the BP, you would have $21 in that coin. IDK why these consignors keep wasting the auctioneer's time. I see lots of these coins, all worth less than $5 with starting bids of $10, which would be $15 with BP.
Great Collections has a very high sell through rate. As a result of that they auction a lot of these kinds of coins and they list a lot of problem coins. A lot of those coins do sell. There is a very good chance this will actually get a bid. If so, then Great Collections is the real winner here getting 5% of the final bid from the consignor and 10% of the final bid ($5.00 minimum) from the bidder. That's why they list coins like this, the sheer volume of buyers' premiums makes it worth their time. For a coin at this value the consignor probably barely makes a profit over the cost of the coin and the encapsulation but he sells a coin that he couldn't sell anywhere else because it would be grossly overpriced.
Another possibility, Ed, is that the consignor wanted the coin slabbed but didn't want to pay full price. Ian has a policy that he'll submit coins for consignors for free above a certain price or at a discount if the sell price doesn't reach that. It's nefarious thinking that someone would do that, but I think it's possible.
Sometimes you're looking for a slabbed coin in a specific grade to complete a registry set. Personally, I'm looking for some MS-63 Ikes to complete one of mine, and am finding it hard to find them, since those are rarer in that grade. If that was a coin I was looking for, I'd happily shell out the $25 for it, even though the coin itself would only be worth $7 at melt. In that case, there's a perfect reason to slab something that you wouldn't normally consider to slab it, even though it's a prohibitive cost to slab. And, you may not know what is going on behind the scenes with the consignor. Maybe he's liquidating an estate and just sending all the coins through at once, or is a repeat consignor constantly feeding coins through based on a contract. Most times you'll see them get a large bulk deal for the consignment as a whole, so they slab the low grade ones alongside the higher grade ones. This is no different than a dealer submitting a couple hundred coins to get the bulk discount at a TPG. They make their profit on the higher grade ones, and the rest are just fodder that may make a few extra bucks.
Thanks for the additional insights, I had not thought of it that way. I have only recently begun to send coins in for grading.
