Ancients: Interesting insight into retail dealer markups

While it seems to me that most coins sold in higher-end auctions end up in the hands of collectors, many are purchased by dealers looking to resell the coins either privately or via their stores (online/retail). I've found it interesting to follow these coins occasionally to gather insight into retail markups, as well as whether a coin offered at a high-end auction was undervalued and/or simply missed by potential collectors.

In the past few months, I've noted three of these coins, the most recent of which is an aureus of Tiberius:



Aureus, Lugdunum 14-16, AV 7.69 g. TI CAESAR DIVI – AVG F AVGVSTVS Laureate head of Tiberius r. Rev. DIVOS AVGVST – DIVI F Laureate head of Augustus r., six-pointed star above. C 3. BMC 29. RIC 24. CBN 1. Calicó 311. Very rare. Two very attractive portraits unusually well-centred on a very large flan, minor marks in field and on edge, otherwise about extremely fine

This coin sold in late May at the NAC 77 auction for around $16,000 including the exchange rate and buyer's commission. While it's a good coin, and refreshingly different from the very common PAX seated reverse, I was somewhat surprised to see it listed for resale at $35,000 when I was browsing VCoins' dealers' current offerings!

It seems to me that this coin might have been undervalued by potential bidders at NAC 77 (although it appears a bit worn for "about EF") and was a bargain at its hammer price, but I wonder whether the current dealer asking price is more than a bit high...

 

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Thats why I am starting to watch stacks and some others for a certain emperor I still need and ive seen they have gone at prices I was willing to pay. It irks me when I saw a few being resold on VC for 40% or more even after the auction fees and shipping.

Many dealers do this though, especially for the lots. But I cant complain too much, I have been able to get some cheap from some VC sellers doing this route and fellow ebay seller I help on occasion.

 

I'm not sure what I think about a 'fair return' when comparing such auction results. We have to allow for such matters as buyers' premiums and postage. In many cases at such levels a buyer will have employed an auction agent who will have charged at least 5% (depending on whether he was going to that sale anyway or was making the trip for that one bid). It is not always easy to figure exactly how much a buyer has in a coin when the prices realized says $16,000.

I just posted this to another thread but it fits better here:
http://www.acsearch.info/search.html?id=2012929
The sale was 3 June 2014 for $35,000 on an estimate of $20,000. The listing includes, "Ex S. C. Markoff Collection (NAC 62, 6 October 2011), 2002." Looking up that sale we find this:
http://www.acsearch.info/search.html?id=1103076
The realization was 32,000CHF on estimate of 15,000CHF. The 32kCHF is converted by acsearch to $34,726 or $274 less than it brought three years later. I do not know details on the add-on costs from the first sale (buyers, postage, agent --- whatever) but assuming all those costs to be zero allows a return of what banks now pay on checking accounts; anything over zero would be a loss.

I find it interesting that the second sale was estimated at roughly the same as the first and the two sales each returned about the same amount a bit over double estimate. The first description mentioned the area of weak strike in the hair (duh!) while the second overlooked it. It is a nice coin. Whether a coin with flat hair is EF is a matter decided by those who will pay $35,000 for a coin. I hope I get to see this coin sell again. It seems that three years was not enough to see it rise enough to show profit but who is to say what it would bring next year or in 2024? I am not a businessman so I do not understand most of the forces at work here. I do recall a name brand dealer a few years back (the one who gave up coins and started selling guns) who stated he had made a small fortune in coins but added that he did it by starting with a large fortune. Prices on things like coins only have to make sense if we assume that the money spent on them means anything to the traders. I live on pensions and buy coins worth a few dollars. The hobby is full of people who waste thousands like I do singles.

 

I'd be curious to see how long that aureus stays in the dealer's inventory. Unfortunately, even if it is eventually sold we're likely to never know how close to the asking $35,000 it went for.

 

How long such a coin stays in inventory is the question without doubt. How long does a dealer keep $16k (+ fees) tied up in the hope of moving it at a profit before the urge hits to liquidate (cut loss?). I suppose that depends on whether $16k is a lot of money to that dealer or not. As I see it the question is whether a potential buyer would rather have a slightly more crisp example with more ordinary reverse or this "refreshingly different" coin that does seem a bit soft. If it were my coin, I'd get it slabbed and market it to those who know nothing about the subject. What would it bring? VF 4/5, 3/5? Better?

 

It is an interesting type, much more so than the mundane "tribute penny" reverse, but definitely over-reaching from a price perspective. I'm happy to give dealers a reasonable profit and have paid 30% over a recent auction price before, but not much passes unnoticed at NAC.

A similar coin is on the market now for $27,500 after having sold at Goldberg in June for $9500, and I've seen another coin recently sell for $65K when having sold two months earlier for $30K. Did they appreciate that much that quickly? Probably not.

They're permitted to ask whatever they wish and to some people, $10K may as well just be $10.00, but it still bothers me to see this type of markup. There are certainly deals to be had and some coins do slip under the radar, but it often feels like dealers are taking advantage of uninformed collectors. While I can't do anything to stop uninformed collectors from buying at extortionist prices, I make a mental note of these dealers and voice my displeasure with my dollars by never buying from them myself.

 

+1

There are dealers from whom I buy only when the coin is something I have wanted for over 20 years and the price is half what I would pay. In my price bracket, dealers don't care if I buy from them or not. I'm happy to see the same opinion on the other end of the price scale. The #1 thing we ned to do is promote the hobby as a place where honesty and intelligence prevail. Our dealers need not remind us of used car salesmen and ambulance chasers.

 

A dealer can ask any price he feels like. Whether it will be sold at anywhere near that price is another matter.
Any experienced collector will have stories. For example, at one show I saw a dealer I know walking the floor and I asked if he had any portrait coins of Julius Caesar. He said, "I just sold sold one to X for $2000." So I went to X's table and asked if he had a portrait piece of Julius Caesar. He showed me that coin and asked $4000.
For another observation, possibly relevant, the background is that I occasionally sell used books on Amazon (Amazon's system is really easy to use). Sometimes a book is available in only one copy for some high price (over $100). It might be because it is in high demand and sells quickly at high prices. But far more often it is just some lousy book that didn't ever sell many copies and few are for sale, so the first person who lists one on Amazon thinks "Rare book! Valuable!" and lists it for some high price. Then, seller number 2 comes along and lists it for 1 cent less. Later there will be more copies for sale, all priced only slightly less than the ill-informed first price. None ever sell. But, how would you know? I would love to see Amazon have one more bit of information: "The last one sold in xx condition for yy dollars on date zz."
Now, that last paragraph was about books. But I'm sure there is a parallel with coins. If vcoins has no examples of a coin that a dealer is about to list, his list price could be anything, including too high to ever sell. (Also, some dealers new listings include common coins at prices much higher than other examples already on the site, a practice I still don't understand.)
I liked it when vcoins used to allow the potential buyers to see the date the coin was listed. (Now you can arrange search results by listing date, but not see the actual date.) A coin listed long ago has not sold, so one might expect, ask for, and get a discount.
The problem is scarcity. If they have it and you want it, you just might pay the price.

 

In principle I certainly agree with this statement. Supply and demand are the fundamental forces in determining prices, and if a dealer feels that the supply is low and/or the demand is high, he can set his asking prices accordingly.

However, there is an implied guarantee of expertise and judgment when a (usually) less knowledgeable collector is considering the purchase of a coin from an ancient coin dealer. What bothers me about this particular Tiberius aureus is that the dealer seems to be exploiting a possible lack of knowledge on the part of the audience of potential buyers. Of course, I could be wrong -- this coin may actually have been grossly undervalued at the NAC auction and the dealer could be asking a realistic price for it, but my research (thanks to the Internet) tends to tell a different story.

Here's another example that I think may be an undervalued coin that was purchased by a reputable dealer for resale:



Nero. AD 54-68. AV Aureus (19mm, 7.34 g, 7h). Rome mint. Struck circa AD 66-67. IMP NERO CAESAR AVGVSTVS, laureate head right / Salus seated left on ornate throne, holding pater in right hand; SALVS below. RIC I 66; Calicó 445; BMCRE 94-5; BN 236. EF, lovely Boscoreale toning.

This coin sold at the Heritage auction in April 2014 for around $11,000 including buyer's premium. To my eye, it's a very appealing coin and despite the minor obverse and reverse wear, I would agree that its condition is EF (maybe 'about EF' on the reverse). A very well known dealership has it listed for sale in its Coin Shop for $17,500 (about a 60% markup).

Is this a fair price and markup for this coin? Well, assuming there is a bit of negotiating room, then I would think that the dealership found an overlooked bargain and used its expertise to add a high-quality coin to its Coin Shop at a competitive price.

Other opinions?

 

I would certainly agree as long as this statement holds true. I try to negotiate a better price every time I can. It's in my interest to do so. And I understand it's in the interest of the seller to attempt the highest price he/she can. There is generally a meeting place somewhere between.

 

In my low end price bracket, I often buy coins from professional dealers who do not know more about the coin or coins in general than I do. That goes with the territory of having collected for a while. I see no problem and do not expect a lot in the way of expertise or judgment. However when a coin is being sold for five figures (or more) I expect the dealer to know more and exercise better judgment than a seller of late Roman fugitives from the uncleaned bin. I might buy a goldfish from Wal-Mart but I would not buy a race horse.

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This situation seems fair to me. If I were considering buying a coin of this bracket, I could see making an offer. You had me at 'Boscoreale'.

 

Above I wrote about selling books on Amazon and how some are priced too high to ever sell, but the high prices provoke other sellers to add copies at similarly high prices, until there may be numerous copies offered, all at prices too high to sell.

Since then I looked at the prices for
Testimonia Numaria: Greek and Latin Texts Concerning Ancient Greek Coinage: Texts and Translations v. 1, by John Melville Jones.

The minimum was $218. I had one on my sale site for much less and decided to put it on Amazon too. How would you price it, knowing it is a good book but unlikely to bring $218? (By the way, a few months ago the lowest price on Amazon was $250.) So, I put it up yesterday at $185.95, more the $30 below the low price at the time. Today I saw there is a copy 1 cent below mine. (I understand larger sellers have computer programs that automatically reprice items to be the lowest by 1 cent.) So, just for fun, I repriced mine to be slightly lower. I wonder if that other one will be lower by 1 cent again tomorrow.

I agree that book is very valuable to scholars and fascinating to collectors, but I'm not sure copies will sell quickly even at the reduced price of $185. If the price drifts down 1 cent every day, it will be a long time before that title is cheap!

What is that book "worth"? I don't know. Check back with Amazon in a month, or six months, and see if they sold. I figure the asking prices will drift down if they don't sell, but it will not be easy to tell if any actually sold.

 

Here we disagree. Of all people, you know what the book is "worth". I'm not talking about value as a collectible but what is it "worth" to a student of ancient coins? Does it have information we need to know? Will it make the reader better in some way? ...or... is it filled with out of date information that makes it a novelty and nothing more? In this case, the information may be of interest to a student of ancient history so the book may be worth even the $185. I don't know. I do know that the Amazon pricing machine takes nothing into account that really matters when selecting a book for information. For example there is one copy of the Hill book on Septimius Severus available for $99.99. I consider the book so bad that you will be a hundred dollars dumber if you read it so it would be a good deal only if they were to pay you to take it. Exaggeration? Maybe a little but I do believe that $9.99 is too much. Is this the only case of such a book being offered? No. As long as books are sold according to the actions of either ignorant machines or people with less a clue than their machines we will have the same situation we have when people are advised that any ancient coin that is that old must be a rare museum specimen and should bring hundreds even if it is a basal disk. I have a small pile of books that I don't want but I can't bring myself to sell with a straight face to someone who might actually want to read them. The local library has an annual book sale (mostly donations) where hardbacks are all $1. At the end of the week the price is cut in half (you pick) and then they offer paper sacks filled with books they pick for a dollar. I suspect there are people who buy these sacks and list the books on Amazon. They probably consider it a good way to make a living. Maybe it is.