How do dealers make any money?

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Well, coins is all I do. A good half of my life has been spent as a full time dealer, and I can say it is not easy. As has already been said it is more an art (or in many cases dumb luck) that keeps us going. It also relies heavily on who you know, not what.

But, in all honesty it helps to have a spouse who makes much more than I do with coins!

 

This is interesting, but makes me curious about whether you'd still be a dealer if you weren't a two-income family. Would you?

Retail operations are all about turnover -- how many times a year you turn over (i.e., completely sell) your inventory. If you have $40K worth of inventory on which you make $20K profit, and you turn it over three times a year, you make $60K gross profit. The lower your turnover, the higher the per-turn profit you need. Ancient coin dealers can't escape this fact-of-business-life any more than toy stores or car dealers.

 

I have been a "full service" dealer for a long time.

What I mean buy that is that I serve my community by buying ANYTHING numismatic. I have a B&M store and a real passion for coins combined with a love of learning and taking the time to educate anyone about coins.

This means I end up with a huge inventory and have to sell most of the junk in bulk to program dealers.

It takes a lot of time and is very hard work to sell coins. There is a time factor in every purchase and every sale that I bet most people wouldn't even have a notion.

I'm sure things are different for every dealer, especially the one's with the BIG business models. I am just a one-man-band, having fun, learning and trying to keep the lights on and food on the table.

 

I have known more than one coin show seller whose hobby was not so much collecting coins but setting up at shows to play dealer. If you are not trying to feed the family and have a collection to sell, you might decide it would be preferable to buy space at a few shows than to mail the coins off to a dealer offering you to do it for you for a price. To me, this does not sound like fun but I know a few people who see it the other way. Ancient coins are not like retail merchandise you can buy wholesale in whatever quantities your checkbook can cover. Metal detectorists need to know where to look if they are to find buried treasure. Ancient coin dealers need to know where to look for a source of coins that they can expect to sell.

The way I read Brian's statement above, paying $800 for a table at a good show that exposes you to $8000 worth of 'opportunities' could be great investment even if you failed to sell a single coin.

 

This is the essence of being an ancient coin dealer about which I'm most curious. While you can't escape the business reality of needing to turn over your inventory (if you want to be profitable), selecting that inventory is critical to success. It's not the same as stocking a bunch of Ford SUVs or the latest Transformer toys and waiting for the manufacturers' advertising to move them off the shelves.

My dealer who evaluates and bids on coin for me used to have a retail operation and publish a yearly catalog. He had a very discerning eye for high-quality coins that were bargains at certain auctions, or were brought to him by private clients. For coins that I bought from his inventory, he made 40% - 80% profit on such coins, a testament to his expertise and judgement. But lately he focuses more on auctions, making his profits from the fee that I and his other clients (as well as the auction houses) pay him.

My dealer's model is applicable only to the kinds of coins that I purchase, and doesn't translate to the coins sold by most VCoins dealers. So I remain curious about how dealers in these coins select their inventory and make a living selling them.

 

I'm pretty sure not selling a single coin would be considered a good show but yes, the opportunities that come with bringing collectors and other dealers to the same venue presents a perfect opportunity to bring new material into your store.

 

One of the wisests posts I have seen here. Sure, dealers can buy better than collectors but its a lot of work. We do it for fun. Enjoy the hobby and let the professionals do the hard work for a living.