Coin market in the last decade - how has it changed?

Ken Dorney suggested I post this as a new thread. It was a question in response to his comment in a different thread that it is risky to run low reserve auctions nowadays. I am borrowing parts of my original post in asking my question below.

What has happened to the ancient coin market in the last 10 years?

For those that might be not aware, I took a decade long hiatus from collecting. During that time I completely lost touch with the market and what was happening - I am still catching up.

I used to run auctions regularly on eBay 12-15 years ago as well as sell from a website. For auctions, I never used a reserve price even for premium coins (even $1,000 or more) and never once had a coin sell for what I thought was an unreasonably low price.

What has happened in the ancient coin market in the last 10 years? Has supply increased or decreased? I thought supply would have decreased because new finds would be drying up? Certainly I recall having access to wholesale lots over a decade ago through wholesale sources and ability to e.g. buy cheap Athens tetradrachms (which is why I still have plenty of them). What has happened on the demand side? Have preferences for different kinds of coins changed? Has the number of collectors declined? Did the economic downturn particularly after GFC impact the ancient coin market? Where have all the active posters on other forums disappeared to? It feels like a deserted island now on the other ones. I am not aware of any other social media platforms which satisfactorily facilitate discussions of ancient coins so have they dropped off or are they on Facebook, Instagram, Pinterest, Quora, Reddit or someplace else?

On eBay, I perceive the following as different: the number of uncleaned coins has dropped off. Historically reliable sellers have stopped selling them or are selling them in fewer quantities. The number of fakes or suspect coins has risen dramatically. Lots of unsold coins which I see relisted again and again. I have not seen a single coin which I would call "premium" listed without reserve. In fact most of these are "buy it now" with super high prices relative to elsewhere - and I am not referring to that eBay seller known for listing common coins at super ridiculous prices with a "make an offer" function and occasional discounts. eBay used to be a place to get a bargain on premium coins but now the only bargains I can find are for common bronze coins of which there are plenty.

Long-winded post I know but curious to hear what you think has changed, from the perspective of buyers and sellers alike.

Peter

 

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I can't begin to address your points about the ancient market, but I'm a little confused by how you started with "I used to sell on eBay and my coins always brought reasonable prices", and end with "eBay used to be a place to get a bargain on premium coins..."

Do you mean that the "reasonable prices" you got for your premium coins actually constituted "bargain prices"?

 

It sounds contradictory but its truly reflective of my experience as I recall it, which is purely subjective! I would find what I considered bargains relative to buying the same coin in a printed auction, or a coin with no reserve that perhaps I was more interested than everyone else, but I was never displeased with the results I got from selling my coins with no reserve - perhaps they did sell for bargain prices relative to what they would have sold for had I consigned them to a major auction house. Also, being a subjective observation about happenings over 10 years ago, perhaps also I am romanticising a little about the past!

 

The price of most scarce books has fallen in the past twenty years. I'm not talking about Dickens first editions, but sought after academic books. Before everything went online, there was a high 'cost of searching' and dealers with something that looked scarce could put a high price on knowing that when a buyer eventually came along they would have to pay it. The internet made the market more competitive and prices fell. On the other hand it has become clearer which books are truly rare, and prices for those have risen. The internet has also increased supply a lot because people who previously just held onto stuff have an easier route for selling. Is any of that true in the coin market?

 

I'm very interested to hear @Ken Dorney's answer to this one.

 

Compared to 20 years ago, demand for -- and prices of -- Roman provincials have gone up but imperial issues haven't kept pace.

In recent Austrian, British and Swiss auctions, provincials have gone for 150% to 200% of estimate, with imperial issues in the same auction failing to sell for estimate or failing to sell at all.

I think because of cultural property laws, the supply of provincial coins is drying up.

 

IMO because Internet allows to spread the world instead of just the streets around the shop, we've seen low end and middle range coins prices going down because of competition between sellers, and very high end coins prices rocketing because of competition between millionnaires

Just my two denarii
Q

 

I totally second that pinion and yes it would also be true of the coin market IMHO. Moreover, in the last 3-4 years I have personally also observed the following:

1. The general quality of coins, both Ancients and Modern, being offered on eBay are second tier when compared to specialist auction houses. Therefore, anyone looking for that 'Special' coin would automatically extend his/her search to such auction houses.

2. Many of the ancient coins on eBay are not certified and those that are, are being offered at astronomical prices. So a novice collector like me has no way of knowing if the item is genuine or fake. A reputable auction house on the other hand would offer a lifetime warranty on any of their items.

3. Generally, the auction houses make sure that they keep clients well informed about the auctions with reminders and promotional literature. I also find their search facilities and historical data much more efficient and very helpful.

4. Finally, and perhaps a bit contradictory to what I've said above, a lot of new enthusiasts on eBay bid an item to ridiculously high levels and then disappear I have personally been following two items listed by a reputable eBay seller which both 'sold' for very high bids only to be listed again in 10 days for non-payment.

Other factors like the financial uncertainties of the past few years have not helped prices either. I recently bought a very desirable Ancient (Phoenician Shekel) on eBay for 30% less than the seller had paid, six months ago at an auction, for the exact same coin (NGC Certified). So yes, eBay is beginning to feel the effects of the economic uncertainties a bit more in recent years. Auction houses on the other hand, seem to have a more 'recession resilient' regular client base.

Perhaps I better go before I confuse the issue even more

 

Q

Depends on which two denarii you're talking about

 

I think there really are contradictory trends that shouldn't be over-simplified. I've given up eBay entirely. There are some good dealers on there, but they all seem to list elsewhere at lower prices! I've never had a bargain on EBay, but I've seen a lot of coins selling for more than you need to pay retail. I don't understand how that works.

 

Sure but two cents, especially large and slabbed ones, are way over my means

Q

 

The one thing that I have noticed is that I can't even begin to keep up with the the amount of stuff that is auctioned/available every day. I try to follow eBay, Heritage, CNG, Stack's, Goldberg, etc. for auctions and check out dealer inventories, but I forget about stuff all the time or just "bag" auctions altogether because I don't have time to go through all of the coins. I haven't even registered or looked at half of the places mentioned on here for auctions that some of you frequent. As for eBay, my most recent sales were hit and miss, but overall, were positive. I had some winners and losers, but I kinda looked at it as, "I am selling all of these lots and expect to get around "x" dollars." I ended up with "x" + $80. So, while I cringed at some of the prices on individual lots that I felt like I got robbed, the group as a whole did better than I expected.

 

Maybe a few comments from my side, not just over the last 10 years, but over the last 15-20 years with regards to Roman coins, specifically Imperatorial and 1st and 2nd century coinage:

- Ebay, specially EB-UK and Spain can (with exceptions) no longer be really trusted
with regard to authenticity of coins. I see very many blatantly fake coins offered by sellers in these two countries. I have had more luck from Ebay-France and Germany, but even then you have to be careful, specially for collectors with limited knowledge (of what typical fakes look like).

- Prices almost doubled, at least in Germany, when the euro was introduced in 2000. What used to be priced in D-Marks was all of a sudden priced at the same level in euros!

- The prices for quality or scarce/rare or popular roman bronzes, specially if high quality and rare has held (very) well over the years, and has even increased for coins which have the desirable qualities of condition, scarcity or popularity.
'Good stuff always sells'.

- The advent of on-line sales has made it generally more difficult to 'get a deal'. Visibility has increased and with it prices for good material.

 

The increased demand, created by the internet, is exceeding the supply for the best coins, despite the increased supply of coins.

As with any supply demand curve, there will be those that fall above or below the line. Those are the folks who potentially over or under paid (in theory.) However, it is important to remember that we are dealing with averages across types of coins, quality of coins and the rarity of coins. Each would have its own supply demand curve if you wanted to get more specific.

For those who don't understand a supply-demand curve.



This is about as simple as it gets. Of course dealers try to control supply by releasing them into the market slowly. Coordinating that action across multiple sellers is not possible, but it does have an effect on prices in the short term.

And another chart for those who want to understand how changes to the curve affect price.

 

Talk of over- or under- paying needs specifying. The equilibrium price is the equilibrium price. No willing buyer has 'overpaid' in this context. The point is rather that equilibrium price might be lower than the buyer would have been willing to pay, or higher than the seller would have been willing to accept, creating a surplus for one party. Unlike many markets, you can't just make more authentic coins. But rising prices might tempt more people to sell. One wrinkle in art and collectibles markets is the concept of an anchor price. If a coin used to sell for 1k and now it sells for less, people will in practice be unwilling to sell for the new price. That makes prices sticky on the way down. How many dealers will sell for less than they paid? They might still be making a loss after costs, but the price paid is still a powerful anchor.

 

I, too, used to list coins on eBay with $.99 opening bids and no reserves. I still do on occasion, but only low grade coins that usually end up selling for less than $10. Now I list anything half-way decent as "buy it now."

There's two reasons for this. All the bad-mouthing of eBay and "den of thieves" talk on the discussion groups has chased most of the serious collectors away. Yes, you need to use some caution and common sense when buying on eBay, but it's seems almost a point of pride for some collectors to announce on all the coin discussion groups that "I never buy from eBay anymore." Okay, so you are much classier than I am: I get that. But the result is that anymore there does not seem to be much difference between the closing prices of common, low grade (or what I call "entry-level) coins and nicer ones. I got tired of letting $25 coins go for $3.

Plus, eBay has changed its selling fee structure. Used to be you were encouraged to set an auction opening bid as low as possible to minimize fees. Now I can just place a coin up for sale at whatever ridiculous price I want and not have to pay anything until it sells. So why take the risk? If I think a coin is worth $50, I'll list list it for sale at that price and let it stay up there indefinitely. The result is that eBay is no longer a true auction site, at least for ancient coins, but rather an electronic marketplace.

 

I have pretty much the same experience of ebay as a seller, all my sales used to start off at 0.99 and I'd let them find their level. What changed was a few years ago when I realized that most of my stock was going to dealers some of whom took every opportunity to over emphasize in my opinion the negative aspects of ebay.
As gsimonel says ebays fee structure has changed that and now I list at what I think it's worth and I get good turnover.
As a buyer and a Constantinian period collector I think it's great and rarely purchase anywhere else.

 

I hear what you are saying, but let me posit this

You describe one transaction. It isolates a point in time. That equilibrium you describe is a moment in time between two purchasers for a unique object. As you are aware, a supply-demand line consists of multiple points that have been averaged to the best slope. It does not describe any one unique purchase.

At the moment the hammer drops on an auction between two frenzied buyers, and the item in question sells for far more than the "equilibrium point", someone has overpaid. Why, because the equilibrium has vanished. You now have a supply of one item at a very high price and no demand at that price. The only demand was the other bidder (who may have in fact been the seller) You have no assurance that anyone will pay more than the equilibrium point for a similar item.

People overpay and underpay all the time.

Peace.

 

Sorry, economics pedant in the room. I can't resist another nit-pick. Supply and demand curves are wholly idealised. They're necessarily not an average of observations because it's at a point in time rather than dynamic. It makes logical inferences based on market behaviour, but real behaviour often works differently. In your auction example the seller could be said to be willing to sell at the reserve price. But could also be said to be willing to sell at the hammer price - in other words, they are taking a chance. Both are true descriptions. But the buyer is willing to pay at least the hammer price (unless the simply made a mistake). The equilibrium is where they overlap. The gain from the transaction is the sum of the difference between willing sale price and price realised for seller plus the difference between max bid and actual bid for buyer. Sorry, will get off soapbox and stop high jacking the thread now ;-)

 

eBay used to be an auction site. It is now mostly a fixed-price site.

For example, there are 868 Greek coins listed for auction plus 19,835 “Buy it Now” items. Only 4% of the category is auction items. In Coins/Publications/World, we see 235 auction items and 3949 “Buy it now” (5.6%). Very few of the auction items start below the retail price so it is hard to consider them true auctions. Search results are clogged with the same undesirable items month after month.

(If eBay offered a way to select only items that had not been relisted and to filter by sellers with 98%+ ratings it would be a very different experience.)

Auction consolidators sixbid.com and numisbids.com gather nearly all auctions, no matter how obscure, and provide easy searching. There is less of a chance of finding something others have missed.

CoinArchives used to be free. Novices could compare historical prices with current offerings. I believe that gave them more confidence to bid. Many mid-level collectors have told me that loss of access to historical auction search results and prices took the fun out of collecting for them. They lack confidence bidding against folks who know recent auction values.

The MOUs make it awkward for Americans to buy coins minted on the territories of Italy, Greece, Egypt, and Bulgaria. It isn’t difficult — many auction houses seem happy to send coins without detailed customs paperwork. The difficulty is placed on those of us who wish to follow the rules. The auction houses have not made it easy to find out the documentation that will be provided if the lot is won.