Fixed price

good afternoon, I have a question that may be embarisingly ignorant.
I’m trying to figure out how a coin can be sold at auction but end up back in the store at the same sight for more than 2x what the coin sold for less than a year earlier. Should this be an automatic pass? I just thought the major sites would price around market value. Is this incorrect? Thanks

 

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Was the auction price less than Market value? Then they increase the price including a premuim?

 

I think your question is much too vague to answer either generally or specifically, at least in any useful way.

A suggestion: get some specific information on the coin, including its picture, and post in this thread something like the following

"This coin [insert picture, not link] sold at [ABC auction] on [Month][Year] for [$XXX] and is currently listed on [dealer or auction site] for [$YYY]. Why is the price so much higher?"

With these specifics, you'll probably get some useful replies.

 

Aggreed

 

Auctions don't necessarily reach market value in the first place. Venue and timing play a big role in prices realized with timing as does the current market which is subject to change. There's other factors involved as well

 

I often see coins sold at retail just a few months after an auction at double the auction hammer price. These are generally cases of dealers recognizing a coin selling at a price that leaves them room to make a profit. In these cases, dealers will snatch-up the coins and later offer them at a retail markup. It's not unusual; it's how the coin market works.

 

Try as you might, understanding the way the market works will not be easy if at all possible. You will also find examples of coins that sell at auction for half what the same specimen brought a year earlier. There are auctions that list coins with high start prices and dump the ones that do not sell for a fraction of that price to dealers that buy such remainders. People who think a coin is underpriced might buy it with immediate resale, perhaps to a specific customer, but dump it for a loss a bit later when they decide the money would be better used not tied up in that coin. Trying to make an exact science out of human whims is not recommended.

 

It's pretty common to see retail markup be double what the coin brought at auction. A dealer has to make money so most will not sell a coin for what they paid for it or under what they paid unless they really want to move it. That said if a dealer paid half of what he's asking for a coin and you know that you have leverage for negotiating a better price and many of these dealers will move at least 15-20% or so. Don't be afraid to ask for a better deal.

 

Your best bet is to participate in auction, otherwise you will be paying 100% markup

 

Thanks for taking the time to help me better understand what may be seemingly basic understanding.

There are a couple coins that say were auctioned with a $1500 estimate but sold for around $3000 between 6-12 months ago. Now the same coin is being sold on the same sites webstore for $6000.00

I know I need to learn a ton more about pricing before I learn how to buy fair market.
I will take the suggestions to
1. Bid auction not buy in webstores.
2. Review extensively past auction results
Thanks everyone, I apologize if this sounded vague, I just didn’t want to list the site or identifying information

 

Can you clarify what you mean by "... the same coin is being sold on the same sites [sic] webstore..."

The second "same" isn't clear -- do you mean that the store that's currently listing the coin for $6000 was ALSO the previous auction website? That wouldn't be impossible, but would be unusual -- most dealers are NOT also auctioneers.

 

I disagree, a lot of auctioneers are dealers, they just changed their businessmodel. The auction estimate/starting is their purchase-price, their profit (at least) the surcharge the bidder pays.

 

I suppose this would depend on your definition of "dealer" and "auctioneer."

In my reply above, I define an auctioneer as one who is listed on Sixbid -- those auction houses willing to stand behind their coins with a perpetual (not just lifetime) guarantee of authenticity. There aren't a lot of these -- maybe 40 - 50? -- and most of them might have a retail operation but it isn't their main activity or business.

I define a dealer as someone who is listed on vcoins.com, or (god forbid) sells on EBay. There are, literally, thousands of these dealers many of whom are highly reputable and buy their inventory from various worldwide auctions and collectors. Some of them may create their own auction from time to time, but they don't fit my definition of auctioneers or auction houses.

Thus, by my definitions, there are far more dealers than there are auctioneers who also have a retail operation.

If the OP is referring to an auctioneer (my definition) who really does have a retail store as well, then it's possible that the $3000 coin was consigned by an individual who placed a reserve on the coin of, e.g., $5000. If the bidding didn't reach the reserve, the individual might have left the coin consigned to the auction house, with an asking price of $6000. This is a fairly typical scenario and I have from time to time purchased such coins.

 

Good afternoon, just to clarify if website x auctions a coin with $1500 estimate and coin sells for $3000. The same coin ends up in the webstore for the same website x at a $6000.00 price.

 

is it commonplace that auction houses all act as consigners as well for items in their respective fixed price stores?

 

Apologies for poor grammar I’m typing on my cell. I appreciate all the insight. It is helping me understand the industry’s culture.

 

@JAncient77 just a quick FYI. The group here is incredibly helpful and will go the extra mile to get people, particularly the newbies like us, correct information. They ask for specifics not to be jerks, like on some forums, but instead to make 100% sure they aren't leading you astray.

 

The thing is, maybe the coin didn't really sell for the $3000 hammer price -- maybe the consignor set a reserve, and while $3000 was the highest bid, the coin did not actually sell at that price. So the consignor leaves it with the auction house (its retail department), listing it for $6000 and hoping to get something close to that price.

Alternatively, the coin might have sold at the previous auction for $3000 plus fees (about $3500 all-in) and a year later, the buyer thinks its worth $5000 so he consigns it to the auction house's retail operation with an asking price of $6000.

Is there some reason you're reluctant to reveal the coin and the auction house?

 

One can offer a coin for sale at whatever price one chooses anywhere one wants.

It might sell on a site and be offered for 20X the auction price on the auctioneers own site if that is his choice.

 

There are no static “price” sheets, or grey sheets, or whatever the moderns are priced from. It is market dynamics. If I choose to buy, I do. If I do not choose, then I do not. I usually perform ancients database searches, and evaluate the price according to my criteria.