Thoughts on price transparency?

I'm going to buy the one that is the best current value for whatever it is.

Assuming they are all three the same exact coin, that would be listing #3.

However, this decision is *completely irrelevant and independent of whatever price the guy paid for it!*

I don't care what he paid for it. That's his business. If I got it for a great price (as the end consumer, that is, the collector), sure, I'd brag about it here on the forums with other collectors. But that's not what the dealer is.

 

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Why are the costs of the seller completely irrelevant to the buyer? Don’t you have to consider that there is a growing segment of the population (regardless if we like it or not) that is antagonistic towards businesses? Is there value then to providing transparent information like paying a “fair” price for products or paying employees a higher wage than the competitors? Are there people that will appreciate to know that the seller didn’t rip off someone’s grandma or that they pay their employees the targeted $15+ per hour rate?

Edit: this is just food for thought-kind of like that chocolate at the store that is more expensive but labeled as made from fair trade cocoa....

 

No - I don’t owe them transparency. They are going to do on their side of the ball what’s best for them. As far as some hostile pop segment I don’t care what they think anymore than some segment that thought everything orbited the Earth.

1. it’s none of their business what my cost in a coin is or the costs of my business.
2. Many are ignorant or don’t care what it costs to be in the business nor will I be low balled by them.
3. The US coin market (except for impact from the metals) has been in a loss of altitude for sometime (PCGS 3000). Anyone who can read a graph understands that. Realistically nobody can really make money in a stagnant market which is like a slugfest for any dollar made.
4. Sometimes I have them quote what wholesale bid is - I just tell them go find one.
5. Coins are a retail business where goods are marked up to cover costs of inventory and operating expenses plus yield the owner profit.

 

Of course those things matter. Similarly, if a dealer at a show has his table covered with political or philosophical stuff that I find repugnant, I'll pass on his material, even if it costs a few bucks more at other dealers.

But, as Doug just said -- if I know the dealer, I don't need to know financial details about how he derives his prices. And if I don't know the dealer, why should I trust what he says about those details?

 

The other intangible not mentioned is length of ownership.

If my parents bought a 1958 proof set to commemorate my birth, the "profit margin" may calculate out to an "unreasonable" number.

Bad example, but it's the only one that comes to mind. If you picked something up and held it for 15 years, that would fall into this category.

What about bullion? I've got some 10oz silver bars that I paid $32 each for back in the 1980's. Am I a thief for wanting over $250 for them today?

Z

 

That is a good question. There is nothing that guarantees that the transparent statement is true. However, the majority of sellers are people that we don't know. Yet we still choose to purchase from them. Trust is built up or eroded over time. Price transparency would not be the sole factor most would make a decision on. It would be one of the things to consider when evaluating several similar sellers who one has not dealt with previously.

Let's go back to the recent mint product example. It is no longer for sale at the US Mint but you are looking to purchase one. Three sellers all have it for the same price, all have 100% positive feedback, and shipping is the same across the board. How do you pick which one to go with? If one seller uses transparent pricing, that would separate them from the competition and could be the difference in making the sale.

 

If ones knows the dealer, then it's true that they won't likely care. The more relevant discussion is for the dealer's that one does not know (which is a much larger number than those one knows).
And the dealer with transparent pricing could easily lie, but there are often repercussions to that and ways to verify. It is hard to lie about the price paid for a coin if bought from a public auction. If the dealer overly fluffs their shipping or materials numbers, it is also easy to tell. If they scam non-coin people by paying pennies on the dollar, that information can surface via online reviews or by coin people who were in the shop at the time of the transaction.

 

That's a good point. In general, I was considering the strategy for those that are selling items acquired relatively recently (say within the year).

Also, while you may find people that think you are a thief for your "egregious" markup, many will understand the nature of price swings among strictly bullion products.

Another idea is to work in an inflation component into your transparent price. Yes you bought it at $32, but when you add 15 years of inflation costs, the margin isn't as big (this idea is shaky though as inflation doesn't legally play a role when it comes to something like capital gains).

 

It removes "emotion" and "sentiment" completely from the transaction.

No possibility for "hard feelings" OR emotion based negotiation tactics.

Z

 

That is a different scenario from what I presented.
In my example there would be no difference in price. All three sellers would have the same price, shipping, and feedback (quite possible with US Mint items being resold on eBay).

 

But is emotion/sentiment ever not part of a coin transaction? Isn't the reason you buy a coin in the first place based on some feeling/desire/enchantment with the coin? And when working with a seller, don't emotions creep in? If the seller is rude or condescending, don't you tend to walk? On the other hand, if the seller makes you feel comfortable, aren't you more likely to make a purchase even if the price might be higher?

 

You asked for what I thought of the idea of "transparent pricing" from my own standpoint, therefore I am not going to pretend I know what the "market" or "everyone else" thinks.

It would be a complete waste of time for me. I don't care what the dealer has in it. I view "transparent pricing" as just another ploy to manipulate the buyer market into guaranteeing to make good a dealer's risk. You know, "privatize the profit but socialize the risk".

I have sometimes had a dealer reject my offer with the statement that he bought it for more than my offer. Who cares? If he made 10,000% profit on it would he tell me? No. So, why should his cost matter to me? It shouldn't and doesn't. And how do I verify his statement even if I cared? Audit his books?

I am reminded of GM's venture with the Saturn brand where their hook was a no haggle price. Multiple studies showed that buyers of Saturn vehicles paid more than they should have for the "privilege" of not bargaining with the dealer. So the customer had to pay in order to avoid the stress or discomfort of negotiating. Who does that favor? Any guesses?

No, transparent pricing is anything but and simply provides the seller with another means to manipulate things to his advantage.

 

Exactly. I hope those dealers enjoyed hanging onto all their 2011-2012 bulk silver purchases all through the 20-teens.

 

Those are some good points. It very well could cost the buyer more. However, if a seller is able to make more profit from the method, isn't it worth trying from the seller's perspective? Some people have commented that it is bad business for sellers. Why would that be if examples like GM's Saturn brand demonstrated less stress (no negotiating) while making more money?

 

Conversations like this do a LOT more for buyer comfort than knowing what you have in a particular item.

Whatcha selling?

Z

 

I'm not selling anything (at least not on this thread as that would be against the rules ).....you could say I'm selling a method that has intrigued me enough to consider although not enough to fully implement.

 

Then take the approach, "No ask, don't tell . . . ."

I don't think anyone would be offended by that.

Z

 

Unless we delve into the world of politics-which we won't....