Trading part of my collection for a high value coin.

Thank you for mentioning CAC, I don't know if it's worth having a CAC bean or not, I also recently saw a MAC bean I know nothing about. Do the beans add to the value enough to make it worth it. I also have a large collection that I want to upgrade.

 

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CAC yes especially on gold and more expensive coins.

 

Since there is no interaction between the seller and the dealer for the sold coin, it cannot be compared with trading.

Selling the coin outright to the dealer means there is no flow of inventory out, and therefore a completely different situation.

Ergo, no I’m not.

 

Same Bat Time, Same Bat Channel ???

 

That's what we'd be hoping for after the unprecedented derailment of this fine thread

 

Trades can work out for collectors, but it’s tricky. When I was dealer, my rule was, it’s the wholesale value of your coin against my retail price, which was usually a decent amount below the numbers you see in most retail price guides.

Dealers buy coins because they think they can re-sell them for a profit. Smart dealers just don’t add stuff to their inventory for the sake of adding it, at least the successful ones don’t. You avoid coins that can end up as “dead stock.” That being said, every genuine coin has a value, and if you can get it an attractive price, it is not “dead stock” if you can re-sell it and make some money.

Every dealer has areas of the market when they are stronger than others. When I got a coin for which I had no collector base, I almost always ended up selling it to the dealers who had that customer base. When I knew I had to wholesale a coin, I would not pay as much for it.

You need to bear these things in mind when approaching a trade. In a perfect world you raise the cash by selling the coins at the best price, and then you make a cash offer on what you want. Cash offers usually speak louder than trade offers. Turing the coins into cash at favorable prices is very hard to do if you don’t have a strong knowledge of the market and who the significant players are.

These are things you need to bear in mind when it comes to trades.

 

Not when, if. There are no guarantees that it will sell.

 

I don't recall the op saying that. That would not really change anything in my opinion. Each dealer has their own market and to stay in business and turn a profit they buy and sell to each other. This moves their dead stock.

 

John, great post.....I've never had that trading or business mentality, I am an investment analyst by trade but never understood the actual mechanics of running a business, whether a coin shop or a local stationary store.

Question: how much of a difference between the wholesale and retail prices (bid/ask) prices on stuff did you look for when you had a coin shop ?

I certainly understand not wanting to buy something and have it unsold 2 years later....so how DOES the local coin dealer make enough to pay their bills AND earn a living ? Is it a business where you have 1 or 2 great months and 10 or 11 blah months ? Or did you pretty much earn a decent living each and every month or quarter since you had enough customers and made it up on volume ?

This is what I mean above....if you bought that coin for wholesale, couldn't find a buyer for it at retail and sold it to another dealer, isn't that dealer going to pay only wholesale, too ? So how can you make any money unless the underlying PM price or the numismatic value itself increased during the time you held it (which would make you a speculator, buying stuff in HOPES of it appreciating, which can also go against you) ?

 

@GoldFinger1969 The other dealer you sell it to should have a different market and therefore you can sell for a small profit. At least you got your money back.

As an antique dealer I could support myself my having antiques shops in malls in different states. I could buy from one mall and sell in another mall. I could pay all of my expenses and travel constantly. Not much of a life and not much of a retirement but I could support myself on that profit by utilizing different market areas.

 

And no guarantees that the original coin would have sold. As I said in my hypothetical example, both coins are just as easy to sell.

 

I generally worked on a margin of 10 to 25 percent depending on how expensive the item was. If I could get a quick flip in a 5-figure item, a gross margin of a few thousand dollars with a low mark-up was fine. This was especially true if I was selling a coin for another dealer. This worked well because the dealer was happy to get the turn-over and I was happy to get the gross margin with no commitment of my capital.

Coin show owners have whole different situation. They have significant overhead costs to cover, and that changes their pricing structure. They can't pay as much, and they often have to charge more. That's why coin shops are generally a dying breed. The Internet has largely taken their place.

There are many levels of “wholesale.” The absolute lowest one with many dealers is what they pay “the public.” Some dealers have the idea that they should pay “the public” as little as possible. I have never understood this attitude if "the public" is offering you a good coin. My attitude was that I would pay “the public” was much as another dealer if they were offering me a profitable, quick turnover item. My attitude is I would rather keep my inventory moving than try to get the last buck out a customer by charging the highest price possible.

Unfortunately, most of the time, "the public" is trying to sell junk. Sorry, but that was the way it seemed most of time when I was a dealer.

For example, a fellow at show offered me an uncertified 1877 Indian Cent that was an EF-45, using my grade. I paid him close to Graysheet money because I knew that once I got the coin certified that I could get a good price for it. I guess the other dealers had been giving him low-ball offers. I got the coin graded and made a nice buck from it.

As I said there are various levels of "wholesale." If you are carting stuff around at show to sell to dealers, that's one level. If you have other dealers coming to you at a show to buy the coins in your case, that's often another higher level. There are also areas of the market when some dealers get consistently higher mark-ups. These include the dealers who specialize in die varieties, like early copper and the token and medal people. For token and medal people they generally have to get a better mark-up because their gross sales tend to be lower.

I sold a lot of Civil War tokens when I was dealer. It made for a wonderful side speciality that most dealers won't touch. I knew quite a bit and had the suppliers, so it worked out well for me.

 

Cac pays more than Rarcoa or HA for coins that meet their criteria. Find a collector member of cac that only pays for coins that get approved, not every submitted coin.

 

I have to agree with others as sell yours first then buy what you want don't trade with dealers as there is no such thing as trading even they are in it for money and profit and they will bs you

 

Generally true...but again (and this MIGHT not be the OP's situation)...if you are selling/exchanging a liquid item (like a Saint or a CAC Morgan) for something ILLIQUID that the dealer has, you might get a good deal.

Think about it: you're a very specific buyer for something that he might have bought a while ago. You're not giving him cash, but you are asking for a good price on something he can easily sell to the public and/or another dealer.

Conversely, selling an entire set or some obscure coins for a highly popular coin (the opposite of what I just described)...the dealer takes on much more risk.

 

That's a two way street. Can you imagine the number of folks that come in with Sacagawea Dollars thinking they're real gold? Or the innumerable customers that come in with 1969-S Proof sets thinking they're worth hundreds? Or the sheer number of clueless folks that think their corroded 1943 steel cents are copper?

I have a friend who owns a shop. Almost everytime I'm in there, someone comes in trying to sell him a "gold" watch that they got from their grandfather, that isn't gold. The other day a guy came in yelling about how he found a 1916-D Mercury in pocket change. It was counterfeit. And the dealer handed it back to him and didn't even get mad! And he knew this guy. Regular customer who came in trying to basically steal from the dealer by tricking him! You could tell his story was bull, and when he got the news it was fake, you could tell he was pretending to be surprised. I bet it's overwhelmingly frustrating and depressing being a coin shop owner, dealing with a revolving door of crooks, rip-off artists, and clueless customers that get angry at you when you tell them the truth.

I don't have a shop, but I'm a coin dealer. Last year I had a little lady come to me with a box of coins. Her husband had died and she found the coins he used to buy occasionally. She was very excited. I added it all up for her and called her back. I told her she had about $450 worth of coins and I could pay her $375 if she wanted to sell them to me. She was devastated and angry. These actual words came whimpering out of her mouth: " I thought he had a million dollar collection." She decided to keep the coins. I didn't charge for the hour and a half I looked through everything. I apologized to her for being the bearer of bad news. Later, I was told she was very upset with me because she felt I lowballed her. I was speechless and hurt. I tried to be kind and pay a fair price. I didn't charge her a dime and truly felt for her. But I suppose she took the frustrations with her deceased husbands poor buying habits and her own unrealistic expectations, and decided to make me the bad guy. Now picture having to deal with that on a daily basis. That's what coin shop dealers have to deal with. If you have a picture in your head of all coin dealers ripping people off and laughing maniacally all the way to the bank, you're telling yourself a lie... just like that poor widow and her husband's "million dollar" collection.

 

I think that this comment is a bit harsh. I have done trades that made me very happy as a collector. One time I did a trade went three ways. I got an 1802 half cent in exchange for a nice gold piece which went to a dealer who gave coins to the dealer who had the half cent. Everybody was happy, and I ended up with a coin that I could not have otherwise afforded.

I don't think that most dealers are "out to get you." You need to understand that they are dealing for a living, and that they need to turn a profit to feed their family and stay in business. If you think that you deserve to get "all the money" then become a dealer. It's not as easy as it looks, and to be successful, you need to be knowledgeable. It’s not just a matter of going to a show, throwing coins in a case and selling. You need to be an expert grader, and you have to learn things about the market that go beyond the price guides.

 

I think this is absolutely the right approach.

I know that I have sometimes sold a large number of coins from my collection to finance a single high-dollar purchase. To me, owning that expensive coin was worth the trade. And, buying quality means that when it comes time to sell, you have quality coins that people desire.

 

This discussion has been a good one and I would simply add that most of us fund our collections with 'hobby' money from our household budgets, so there should be a certain level of expectation in regards to 'loss' when selling or trading.

I usually don't sweat these concerns as I have often made up the dollar 'loss' with the entertainment value I've received from acquiring, holding and adjusting my collection during any given timeframe.

If it's truly ones fun hobby, I recommend people not get too wound up about 'profits' or 'losses'.

I can imagine a dedicated and experienced coin hobbyist would either make a great or terrible dealer.

 

CBD, great story....I would simply tell a person like that to go to other dealers and see if she can get more $$$. You tell them you made a fair and best offer...they can accept it or go shop around for a higher number.