This is my first post, I have been a collector for a couple of years but have a question I hoping some of you seasoned guys can answer How can an online dealer sell coins cheaper than the mint Looking at the US Mint website they are selling 2015 Gold Buffalo Proof for $1490 But there is an online dealer selling graded ones for $1349 and ungraded for $1329 How is this possible
Dealers/collectors order from the mint and cherry pick the high grades, often 70's, and sell off the lower grades, often 69's, for market value, sometimes less than the mint's price. Overall, they make money due to the profit on the high grades.
The mint sells with a high mark up over the current spot price at time of sale. The dealer doesn't necessarily buy from the mint, but from individual sellers for less than current spot price at the time of his buy. SQG was more accurate than I.
SQG, that was my first thought as well until the other day they started selling nongraded 2015 Buffalo Proof's for $1329 The same thing happens with the America the Beautiful coins (5 Ounce)
The ungraded ones are usually lower grade than 69. So, they are usually problem coins not worth grading.
I always end up selling my stuff for less than I paid for it! The market can be very brutal for cash flow when its needed.
My local dealer does not buy from the mint - they buy from other that sell to them. Sometimes on initial release the prices jump, then settle down to less than the mint sells them for. That is when I start seeing them in the shop. I still remember them wanting to see some of the Kennedy's when they were first release - it was well over a year before one was for sell in the shop.
The mint sells them at a premium as collectors items, but in the aftermarket they are typically treated as bullion by dealers purchasing them from collectors. The current bullion value is well below the mint sale price. So the dealers buy them for less and they sell them for less.
Beyond all the reasons stated above, doesn't the Mint have their "official dealers" program? My understanding was that the Mint price was suggested retail, and the dealers get the coins at 15% (maybe 20%?) under the retail price.
That's only for uncirculated ASEs. And all retail prices for those are governed by the spot price of silver.
I talked to the online dealer today They said that they get a discount from the mint because they have to buy 400 proof buffalos at a time
Before things get too far out of place, here is the US Mints Bulk Dealer's Program: http://catalog.usmint.gov/bulk-purchase-program-landing.html The above page provides you with everything you need to know regarding the program the US Mint has with Coin Dealers. Note this interesting item in the Bulk Purchasers Agreement form: According to the above item in the Bulk Purchase Agreement Form, the OP's dealer is in direct violation. He/She cannot advertise for sale at a price Less than what the US Mint is currently offering. In other words, 2014 would be ok but 2015 would not. Of course, the OP never stated that the dealer was selling "2015 Gold Buffalo Proof's", just "graded One's" with the implication that they are 2015 Gold Buffalo Proof's. Perhaps the OP could state who the dealer is?
I think I've found the dealer known as United States Gold Bureau. They appear to be in violation of their Bulk Purchase Agreement if they are in fact the Bulk Purchasers of the coins. They could very will be a child company to a parent company which does the actual purchasing. https://invest.usgoldbureau.com/2015-50-gold-american-buffalo-proof-pf69 If that's the case, then they are skating under the "intent" of the Bulk Purchase Agreement.
19Lyds, Thank you for your reply The dealer is on Ebay and also you can buy from them directly The dealer is wholesalecoinsdirect.com They sell 2015 gold buffalo proofs NGC PF 69 for $1349 They do sell non graded buffalos but they will not tell you which year you are getting
Last I knew the bulk purchase discount was 5% not 15 or 20. And there is no evidence that the coins being sold for less than the mints issue price were purchased directly from the mint.
