If a Dealer can sell a coin for $100 what should he pay?

What do you think is a reasonable price a dealer should pay for a coin that he can sell for $100. Assuming this is a type of coin he deals in and is pretty cerntan he can sell it in a reasonable amount of time?

 

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As for exact dollar value, I can't say. I always feel a buy price of 60% to 75% is pretty fair, especially considering dealers have to pay for overhead and pull in a profit.

 

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Thats what i also feel is a good range for a ethical dealer to pay.

 

he should pay whatever minimum amount that you would accept. A penny less thatn that is a robbery!

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www.thesickearth.blogspot.com

 

I Agree. A 30-35% mark up I believe is very ethical ($65-$70 Wholesale). "Reasonable Time" is the Key. If the coin is a very Hot, quick turning, than perhaps the wholesale could be higher. If it is not a quick selling coin than probably a lower wholesale as it is likely the coin will be in the dealers inventory a longer period of time.. Just my opinion.
Steve

 

I agree. I know some coins have sat in my local dealers inventory for over a year. And a couple I am not sure did not go back to the dealer network. I know that is where he got a couple of them since he told me he got them in just because he liked the looks in the catalog.

 

Dealer? Brick and mortar or on-line? An on-line dealer can get away with a little more.
Next question, is it hot or slow? In Lincolns, a 31-S move as fast as you want, but a 1954-S MS67 might sit for a while. He will pay more for the 31-S.

When all is said and done, you might get as much as $80 for the 31-S to an on-line dealer and would probably be lucky to get $50 for the 54-S at a B&M store.

 

I usually try to pay 60% of what I think I can sell a coin for considering business costs and inventory turnover.

 

So you are going with a 66% mark up. That seems a bit on the steep side - at least usually. The "35% mark up" means you would pay $74. (1.35 X $74 = $99.9)

 

Not steep at all. Ideal would be keystone markup - 100%. Basically it takes a Gross Margin on Sales of 40% to make it in the coin business. While I have a base inventory which is primarily retail, I am not an investor but a dealer. So my offers for coins are to purchase them at a price I can sell them at now for a good return. If I can blowout an MS65 generic morgan for 90% of bid on the bay then I will offer 54% of bid.

 

buying at $65 - selling at $100 is a 50% mark up.

 

I believe in a free market. The buyers decide what the selling price is. If the dealer is selling a coin at a reasonable and competitive price, it doesn't really matter what he paid for it. What if it were given to him or he just happened to find it? Should he sell it for next to nothing to be "ethical"?

 

There is nothing wrong with selling coins for what they are worth regardless of what was paid for them, the problem is when a person that knows nothing about coins go's to sell to a shop and the dealer offers 10% of the value and leads the person to believe that its a good price that's when it becomes unethical.

 

What exactly is "ethical"? A deal is only done when both sides agree. Any accepted deal should be "ethical". If a collector finds a 1914-D cent in the 10 cent pile, how many would tell the dealer, he would give him 70% of the value rather than the dime?

 

If one leads a person to believe that dads gold coin is only worth twice face that would be unethical but if the person was just asked what they wanted for it and they said twice face that would be fine.

 

A dealer in my area would likely pay $25-30. We are in a major economic slump here with official unemployment over 15%, so the dealers are taking every advantage of people who are desperate enough to have to sell their coins. Last I checked, gold was being bought at $13 a gram.

The first thing they say, is "I have a lot of those coins in the back and don't even want to buy yours. Then they act like they are doing you a favor to take it.

 

Do they also offer discount if you are a buyer? or is that only "one way"?

 

Everything I have looked at seems pretty high. And I refuse to give them my stuff. I haven't bought anything in awhile and supplies are full retail. Those are much cheaper on-line. Maybe because of lack of volume, they are trying to cover expenses with wider margins on fewer transactions ?

 

It costs a lot to run a shop as the fixed overhead expenses are a killer, especially in this economy. Shops make their money buying it right and selling supplies at retail.

Unemployment is high, many are being forced into taking Early Social because of age discrimination in hiring. Corporate America has essentially shafted the American Worker. They have busted the unions and shipped 9M+ jobs overseas and millions more paying jobs have been squashed because of downsizing. Whatever you do, save your money when your young and don't get buried in lots of coins that you have to take a hit on when forced to sell.

 

Actually, that is a 35% MU:

Retail - Cost $100 - $65 $35 35%
Retail $100 $100