I'm coming to a sad conclusion...

If you have seen my previous threads about my LCS, you might remember that I clam he is seemingly being a little duplicitous, selling problem coins for full price, ASEs $4 over spot, only partial refunds on returns, a few other things...
My LCS is the only one in approximately 75 mile radius, meaning that he sorta has a monopoly on the market in my area, its southwest Missouri if that gives you a better insight.
So something that the dealer said that struck me, I brought along a friend to the shop and he in no way has any numismatic knowledge, he was just there because I was, anyway, and he was very surprised at the volume and value of stuff in the cases, so he asked the dealer, you own all this? The dealer said no, that all the coins were sorta "on loan", my friend continues on, thinking that LCS is the way to big bucks and my dealer said its really not and the financial aspect is not that great...hold on...

The coins were, "on loan"

- I could most likely guess that he is in some major contract with a numismatic and bullion distributor, who offers him lots and lots of coins at wholesale, requires that he makes a certain percentage on the coins to repay the distributor and still requires that he up marks coins to keep his lights on. You might be asking, why doesn't the distributor just tack on its premium before the sale? Just as a purchase incentive, buy now, pay later.
- To add on to this speculation, my dealers sells a lot of modern numismatic and bullion product that would be easy to do contract sales with, he does have historically numismatic coins however they are lesser on his inventory.

I don't want to speculate too much, and I could be totally wrong, but the comment provoked me...

 

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Not sure that answer means all that much. I think a fair answer by any proprietor for a random question about his business and the ownership of his stock could be that it is "on loan".

 

Very true, I just know he has mentioned a distributor before, I know its a stretch, but possible.

 

On Loan? If a shop sells stuff that is owned by another party isn't that more like "on consignment"?

My dad used the term "on Loan" when he had to finance something. It was his way of saying the bank owned it.

 

So it's like a subscription; that's what I'm getting from this post?

 

Like all coin shops are basically pawn shops/consignment shops. Most everything is second hand or more.

It could be true it could be false. He could have a lot of it there on consignment hoping to sell them for people, he could buy collections and owns them and sells them and says "it's on loan" in a way to avoid people haggling on prices. "Nope I can't come down on this, I'm selling for someone else."

It sounds slightly worse than my LCS but not by much. At my LCS anything you are interested in buying he will give it a once over before he completes the sale and will change the price if it's a variety he missed, effectively destroying any chance of cherry picking unless he just doesn't know about it and his books doesn't have it.

I only go there if I have to. Not worth the effort. Pawn shops are better to cherry pick from. Lol. Gotta be careful of the fakes though, they will claim ignorance.

 

Every business entity is unique in the same way that every family is unique. And in the same way, there are good ones and there are some that are not so good. Sadly, CB I believe your dealer probably told you everything you need to know about his place of business. I wouldn't frequent the place anymore unless I need sundries like catalogs and flips.

 

Definitely a strange comment and if he's like you say he is with prices and in the other areas, I forget he existed and to all my buying and selling elsewhere. There are a number of honest dealers online.

 

Yeah I agree that I need to "get out of there" metaphorically, however it does seem kinda difficult to considering that it is my 1 numismatic resource outside of the internet.

 

@CoinBlazer .... Missouri .... Years ago coin shops used to mail out flyers of what they had in stock.

One of the places I bought from was in Missouri, though went out of business over a decade ago. I think the guy ran it from his house.

The internet really crimped their business and they disappeared at some point in the mid 90s.

I wonder if I can find any receipts to see if you knew the place .. .hmm ...

 

There is two is southwest MO, the other one is K&M Coins in Neosho MO, but they are nearly ready to close its doors

 

I'll echo Doug. Of all the stuff I've purchased less that 1% of it has come from coin shops. I've found that most I have visited contain rude, arrogant, and condescending staff who act as if I'm wasting their time. So I don't waste mine......

 

I feel extremely fortunate that I live within a reasonable distance from a pretty good coin shop that has a bid board. The owner is knowledgeable, but comes from a sports card background and doesn't really like coins that much. I trust him fully.

 

Yeah. Pretty much the same, here.

 

I'm in the same boat. I've actually acquired many nice coins in my collection from my preferred LCSs. I have several decent ones that I've built a relationship with in my Metro and I'm happy to frequent them. The next is from shows and last is online. I prefer to see my coins in hand before I buy them and online purchasing doesn't fit well with this desire.

 

The coins could be on invoice from a wholesaler or else he also operates pawn shop. If pawn in win win situation bc he either gets coins for free or guy pawning them pays back loan plus vigorish. So retail customers he may want good 50 pct profit or more.

The wholesaler could have them on invoice at bid plus 5-10 pct so the dealer will have them marked up over that. Shop dealerprofit = the sale less the invoice amount due on his purchase or sale of the coin. Let’s say 10-20 PCGs generic saints on invoice at bid plus 5 pct. He picks 5 or so really nice pieces to purchase for shop inventory (markup higher) or send to CAC which are PQ May sell some at bid plus 25 -30 pct pct plus sells a few of the lower end ones others bid plus 15 pct then settles the invoice w the wholesaler.

Friend in coin club used to operate a shop like that in Jersey just regular guys working their angle. He had as a sidekick Johnny who was a bouncer at a strip club at night worked there during the day for security and run out those not real buy or sell customers shop could make money with he referred to as - bozos, tirekickers, slight of hand artists.

 

There are several LCS's in my area but only one is worth my time. He carries what he sells or has a market for so the vast majority of my buying is from reputable online dealers and coin shows.

 

One good coin shop here and some really good dealers around that I can do business with privately. And a lot of coin shows within a couple hour drive. Plus auctions and the National auctions not hard to buy coins here