Some basic questions on high-end coins

Hello everyone,

Note that by "high-end coin" I mean any coin that sells for more than $100k. Since I love my wife and very much desire to remain married, I won't be purchasing one of these, but my 18 year-old son is starting a sports card business that's been going well, and I believe at some point he's going to deal with a card in the same price range. Since I expect the below questions to apply equally as well to ancient coins, I'd thought I'd ask.

Also, I'm just curious.

1) How are these coins delivered? For simplicity-sake, let's assume I bought a coin for $200k at Triton, so it's already in the US and doesn't need to cross borders. Does the purchaser typically fly in or pay someone to fly in to personally receive the coin? Or are there specialty white-glove services above FedEx and DHL that provide top-notch security door-to-door?

2) How are payments typically handled? I remember someone mentioned escrow services similar to how one buys houses. Are these utilized or is it more typically wire transfers - and the buyer needs to have a lot of trust in the seller? If there are escrow services, who typically pays the escrow fees?

3) (this one I'm just curious about) How does one get the OK from an auction house to bid on say a million dollars in coins? Do they require a bank statement showing proof of funds, or do they require a deposit consisting of a percentage of the maximum bid amount before the auction opens? I assume if I've spent $1M at say NAC, that Triton and Roma will probably just trust me, but I'm curious how that first one happens.

For those who care, my son buys boxes and "breaks" them live. He's currently doing about $5k per month and plans to grow well beyond that. Since he's starting to open the type of boxes that may contain a $300k card, he's a bit worried how he'd send it. My assumption is they're sent similarly to high-end coins.

 

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Auction houses have private insurances that cover their posting around the globe even for items in the 6 digit chunk. I doubt your son could make such a deal with an insurance company and postal carriers don't insure for more than 10k. So indeed if he sells 200k he should go to deliver in person along with a hired bodyguard

 

I can't really answer 2 and 3, but there are courier services like Brinks and Malca Amit that are often used for high end coins, jewelry, gems, etc. It can be cheaper for the buyer or seller to make the flight and deliver or pick up the item in person but when that isn't possible or isn't desired, these services are trusted by a number of people around the world who need to move 6-figure items around.

 

Interesting questions.

The most that I ever paid for a coin was $26,000 for the Segovia 50 reales, 1635 R, back in 1997. I guess things were pretty simple back then, as compared to now. I simply sent a check to Superior, and the coin, with its Capital Plastics custom holder arrived by registered mail.

In answer to #1, I would imagine, these days, that Fedex would be used for such a high value object. Otherwise, probably registered mail. Fedex is fast and secure, but if the coin is sent internationally, then the issue of US Customs and customs fee enters the picture. In the past I have had to pay these fees to Fedex for international deliveries. This has not been the case with postal shipments. If one were to personally pick up the coin, that is an alternative, but again, if done overseas, the customs and declaration issues would been to be addressed.

For #2, I know that Roma will allow credit card payments and Paypal payments for total invoices up to £2,500. Anything above that amount is paid through a wire transfer. I am not sure about escrow services, but I imagine that people who can pay $100,000 or more for a coin would simply pay cash, through a wire transfer.

#3, some auction houses have a prior approval requirement, such as Steve Album, in which the buyer specifies the upper limit of his or her bid total for the auction. I am sure that this require is there to stop bidders from heading to Mars when participating in the auction. I am sure that some houses have exceptions, if the bidder has well established credit, or owns Amazon and has flown into space, to gaze upon his fulfillment centers below.

Sounds as if your son is having fun and making money! I know that there were, before the pandemic set in, sports cards shows. Even coin shows had sellers of other collectibles, including sports cards. When they start up again, maybe he can set up a table.

Hope this helps

 

Congratulations for your son's sports card business! That sounds very exciting. Here's how I've handled it:

1) I've had dealers hand-deliver coins in the past and fly to pick up consignments in-person (the latter was a non-trivial challenge to coordinate during a pandemic).

It's generally only possible to ship up to $75K through FedEx, although dealers can sometimes receive an exemption one package at a time up to $150K. Above that, coins are more economically delivered by armored service (Brinks, Malca Amit, among others) or shipped to the offices of one of those companies for in-person pickup.

2) There is a deep level of trust in the coin industry in particular, although one bad check or missed payment will ruin your name. I've never used any escrow services and have trusted dealers holding significant funds from consignments for months. They have conversely trusted me by shipping coins well ahead of receiving payment. This may be more difficult with sports cards or other cases where buyers/sellers aren't as well known.

3) Some auction houses will require a deposit of some percentage of your expected bids, which is usually outlined in their Terms and Conditions. That said, I haven't needed to do this as I've developed personal relationships with dealers over the last 10+ years. It helps to pay quickly and without fuss via their preferred methods (wire/check/etc.)

I had one obscure auction house ask for an "identity theft waiting to happen" level of information from me so I instead opted to just bid with a dealer who already had an established relationship with them.

Hope this helps!

 

Thank you for all the replies!

I checked FedEx, and they have two services that sound interesting:
1) Declared value up to $100k. They're clear that this isn't insurance, but is the most FedEx is liable for. I assume this just means that FedEx will try really hard not to pay.
2) Security Box kit. This is a metal case with a key and a combination that fits inside one of their boxes. Only the shipper and recipient have access to both. I'm guessing that the key is sent separately, while the combination is relayed over the phone.

However, my son was just figuring he'd have to fly out there, so that may be the solution if he pulls one soon. The problem is that eventually his business will be bringing enough that it won't be cost effective to close it, unless he hires someone to deliver, and that has security problems itself.

Any ideas what Brinks charges to deliver/insure a $200k coin say from one coast to the other? Their website isn't obvious, and I assume that means I need to call them and pretend to be someone important.

It's actually fascinating to watch him. He does most of his business through live streaming, where he sells spots in breaks and boxes directly. Stuff that doesn't sell immediately he puts on his web site and he pushes it later. His biggest limitation right now is that PayPal and Venmo usually hold his money for 3-5 days.

One of the models for his operation is my nephew, who's 21 and currently makes $500k a year moving sneakers.

Certainly crazy times for a business!

 

Thanks Joe! This is exactly what I was looking for.

One other dumb question: if the seller hand delivers a coin, do they charge you extra for that, or is it included in the tens of thousands you just paid in commission?

 

I haven't paid extra when receiving hand-delivery, although that's because I've usually worked around their schedule (i.e. they happened to be passing through my city).

Shipping, however, does add a decent chunk of cost for the peace of mind that comes with the added security (and the import duties: Malca Amit is also a customs broker and handles customs and all of the complexities there).

For the cost, you do get ostentatiously large "rob me" bags included from time to time, so that's a plus. This was probably 10lbs of packing material for a 7gr coin:

 

The cost will vary depending on if you're bringing the coin/card to them or having them pick it up from you, and if the recipient is collecting it in-person or having it delivered to a residential address.

It will likely further vary if you're regularly shipping expensive objects or if it's a one-off. I've paid between $600-1500 in shipping costs for various coins sent within the US from dealers who operate at a decently high volume with either Brinks or Malca.

While it's certainly not cheap, the dealers I've spoken with swear by these services which have a near-zero loss ratio whereas FedEx/others have packages go missing from time to time.

 

Can you please translate this paragraph? I actually don't have a clue what this is about, but it may be due to my limited (non-existent?) knowledge of another related hobby.

 

"Breakers" are people who purchase boxes of trading cards and open them live on YouTube or Instagram or something. Before they open the box, people will pay money to buy certain cards with the chance the card is in the box or not.

For example, I have a box of baseball cards worth $500. I sell teams before I open them. Dodgers is $50, Yankees are $30, Giants are $40, etc... People pay money with a chance of receiving what might be in the box. Some teams cost more because there is a star rookie or something that could be worth much more. The chances are very low but the risk may be worth it for some.

I am pretty familiar with the sports card hobby so hopefully this cleared it up a bit for you.

 

Like most hobbies, collecting can be devastating for some people. They can be addicted to opening card packs or buying spots in breaks. I recommend this video, it makes you think:


I am not big on all the new sports cards, I enjoy the vintage cards more. A box of sports cards nowadays can cost thousands of dollars. I think this is what the OP is worried about, if his son pulls an extremely expensive card out of a box like that and doesn't want him to get scammed.

 

Yes, this is one method of breaking. He also buys a box say for $800 with 40 packs, and sells each pack off for $50. People buy numbered packs.

The most expensive cards are in boxes $500-$5000 that contain one to seven cards. He'll sell off numbered slots. With the higher priced boxes (he hasn't gotten to the $5k ones yet), there could be a card worth > $1M. The odds are small and it's very much a lottery, but since his goal is to eventually open these boxes on a regular basis, the odds are that he'll someday pull one of these cards.

To me, it sounds crazy. Let's see... I can either own a top quality silver Eid Mar coin that's directly from one of the most monumental episodes of world history, or I can own a sports card from someone no one will have heard of a few hundred years from now.

 

I agree with you, I’d much rather have coins than cards. Not to mention the precious metal value of a coin compared to just a piece of plastic. During the apocalypse, which one will be worth more? Although good for your son. Card breaking is a tough business and it sounds like he is succeeding.

 

Or, if you had a couple million to spare, you could own an unopened copy of the "Super Mario Bros" video game. That collectibles market is going nuts too.

https://www.nytimes.com/2021/08/06/business/super-mario-bros-sale-record.html

 

It's fascinating how many non-traditional ways there are to make a buck these days. No wonder all of my local fast food restaurants are closed down due to staffing shortages, with people making hundreds or thousands of dollars a day opening packs of baseball cards, streaming video games, "etc."

My wife is currently stitching out sweaters for people's Elf on the Shelf dolls - an apparently $10-20k per season market that I had no idea even existed 12 months ago.

 

It sure is. I've been flipping items (such as sports cards) from garage sales and things like that. A great side gig for a 16 year old.

I don't think this is the reason why people aren't returning to work though... I think some people have discovered that they can make more money from unemployment or covid pay than they would with their actual job. And they aren't even doing anything!

 

Perhaps w overestimate the number of people who know or care Rome ever existed. Or do we underestimate the number that worship current celebrities. I will never understand collecting things made to be collected. That includes modern NCLT and proof sets as well as new in package sports cards. To me, collectables are things we wish we had saved but were too stupid. I was a kid in the fifties and spent my dimes on baseball cards and comic books. I chewed the gum. The books were read; the cards were played with and passed around among friends with grubby hands. A Mickey Mantle was more likely to get passed around so it was more likely to get 'worn'. When I went off to college my mother decided to throw out all that trash. That is why those things are rare today. My mother did not throw out my coins. That is why they are common. When I needed money, my mother bought my coins at face value (she had no use for the ancients) but saved them because silver was rising. I got them back when she passed. I sold the ancients to Joel Malter in 1974. He did not give them back. Collectables values are based on people, and their mothers, making poor choices.

 

Wow, that’s a really unique perspective. When you think about it, baseball cards were invented in the late 19th century by tobacco companies. So they weren’t even originally meant to be collected by kids. I could imagine a few decades later when cards were started to be produced for kids, all of the people who put their Mickey Mantle rookie card in their bike spokes. From what I understand, nobody expected them to be collectible and that condition would even matter. I don’t think card sleeves or cases were invented yet.

 

I did a small foray into Yugioh card selling. Ended up with a net loss of around $500 after 5 months or so.

I've been restoring and selling vintage and antique musical instruments since 2012. The pay is horrific, the hours are long, and it's really not worth it.

I've been selling ancient coins for the past year. I can barely break even.

Still trying to find an effective side gig