Are Coin Dealers Irrelevant?

Once upon a time, coin dealers made the market and controlled which coins were hyped or promoted. But today, with the internet and the U.S. Mint, as well as world mints, becoming the largest coin dealers, have traditional dealers lost their clout? I’d say they have.

When it comes to modern coins, the U.S. Mint and world mints are the largest dealers out there, telling us all which coins to collect and which coins will be hot. And contrary to history and popular believe, these days they are offering some beautiful rarities that should perform well in the short and long run.

When it comes to classic coins and the secondary market for moderns, with the growth of the internet, we’ve all become dealers via sites like eBay. We no longer need or want the traditional dealers to tell us what is hot, we know what is hot, we see the market and we all make the market.

What say you?

 

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I buy most of my coins from dealers I know of. Dealers provide a lot of services to the industry:

1.For sellers, provide a liquid market to get rid of all of grandads old coins. Many people do not wish to become Ebay dealers, especially for stuff they know nothing about.
2. For buyers, provide some assurance of authenticity with a return policy. Face it, all coins cannot be slabbed, and for ancients even slabbing does not guarantee authenticity.
3. They help educate collectors, and provide collecting guidance. Do you think its a coincidence that most of the most knowledgable people concerning coins are dealers?
4. They are the first line of defense on fakes. How many fakes from China have you been seeing SQG? Now, how many chinese fakes are you seeing being sold by respected dealers? Just wait until they have higher quality fake slabs, then you will really see how valuable buying from a knowledgable dealer will be.

I disagree with anyone saying the internet has made dealers superfluous. Yes, there are fewer local dealers around, part of that is fewer penny collectors than in the 60's. However, a good dealer today is still just as needed as ever before to the health of this hobby.

 

Who do you think is buying all those U.S.Mint coins? Who do you think is bidding and buying all those Heritage rarities? And who do you think puts them back onto the market making large sums of money off of collectors?

 

I say....................you're making a lot of assumptions based upon what you see and not necessarily what reality might be.

"Coin Dealers" are the backbone of Third Party Grading.
Without Third Party Grading, there would not be anywhere near the Internet Market that there is today.

 

The worse coin buying/selling experences I ever had was with coin collectors not dealers.

 

Funny, when silver was spiking and people wished to cash in on pm, I sure saw a lot of dealers being sought out to sell to. So much so that quite a few major shows had to up the amount of times they changed garbage cans, since the dealers were breaking out the coins and throwing away the junk like mint packaging, slabs, and other things that make modern coins too bulky. But anyway, modern collectors sure wanted dealers around when they wanted to profit on pm increases, getting back to point one, dealers provide liquidity to the entire market. Do they make a living by doing so? Of course, but that does not neglect the value of this function. Its like Wall Street, sure they make a lot of money making nothing, but business is better off because of the liquidity they offer.

 

1. eBay is were granddad’s coins are sold today. Actually, the first time I made a profit on a coin was on eBay were I got a fair price, rather than being ripped off by a B&M dealer trying to pay their overhead, as well as make a living/fortune.
2. With sites like eBay and high def pics, there’s no problem with authenticity. If the coin isn’t what was advertised, you’ll have a refund in days. Much better than arguing with a traditional dealer who is attempting to not refund your money.
3. The Internet, as well as coin clubs, provide a wealth of knowledge. Coin dealers provide biased opinions that differ from dealer to dealer, depending on their own self interest.

20 or 30 years ago, I’d agree with your view of the market – today there has been a drastic change in the way business is done, which is why B&M dealers are disappearing.

 

While many seem to think the internet, with places like Ebay, have hurt dealers, it couldn't be further from the truth. In reality, many of those Ebay sellers are in fact the same dealers that own shops and travel to shows and attend auctions. Whether people buy from them in a b&m shop of on their Ebay shop is irrelevant. Without dealers, coin buying would be a terrible experience overall.

 

Really? You believe most collectors in a few days KNOW a coin is false? Good gosh, I have been around coins goign on close to 40 years now, and some fakes take me weeks to finally prove its false, and you think an average collector knows this in a few days?

I think you have had some bad experiences with dealers. Maybe its what Doug alluded to, in that they do not normally deal with moderns.

I look on Ebay and see just THOUSANDS of fakes on there every day. Are you saying every single one of these either does not sell, or are returned? Referencing Ebay and saying "there is no problem with authenticity" nearly had me falling out of my chair laughing.

 

1. I would not consider the U.S. Mint or other world mints to be coin dealers in ANY sense of the word. They are coin sellers, offering a narrow range of products of dubious future value. They are opportunists, cashing in, attracting stackers who want something "higher class" than junk silver and everyday eagles.
2. They are not selling rarities. They are selling low-mintage coins (and concoctions), hoping you will make the mental connection that low mintage = rarities and/or investment grade material.
3. The vast majority of their crap will end up, down the line (like 1960s-1980s proof sets), sold at a loss for bullion, with all those slabs resting comfortably down at the local landfill. Good luck.

 

True, the smart traditional dealers have moved to the internet. Yet, now they have to compete with everyone else that has become a dealer. They no longer have a captive market within the area of their B&M.

 

Keep in mind that there are Coin Dealers and then there are Coin Marketers.

Coin Marketers are irrelevant while Coin Dealers are the mainstay of the Coin Industry.

 

I'd say they're expanding their territory........

 

True, but eBay will refund your money, no questions asked. Now, don't think a B&M dealer won't sell you a fake either. At our local club, there's a list of dealers not allowed to sell at our show because they have sold fakes.

 

Btw, concerning this passage. Where do you think most knowledge from the internet and coin clubs come from? Where do those club members get their knowledge? Mainly dealers. Most authors of the books we rely on for our knowledge of coins are/were dealers. Sure there have been some good collectors over the years, but even their knowledge base was formed from mainly dealer written books on the subject. Dealers are "ground zero" in most cases for building our knowledge base. Sure NOW everyone knows this information, but they didn't before dealers wrote about it. I actually know authors of numismatic books, a couple are in my ancient coin club, and they will be the first to admit they are standing on the shoulders of giants, mainly dealers.

 

For a few days.

Let's test this. Find someone who is not huge into coins. Have them go onto Ebay and select some coins. Then, with no help from you, ask them if any of those are fakes. Are you saying your mother would be able to know she bought fakes in time, all of the time, before the Ebay refund clock runs out? No cheating, no coaching her "only buy slabbed coins from US addresses Mom". Give her a hypothetical $500 and ask her to pick out some pretty coins, and try to get the best deal she can.

Buy those same coins from a respected dealer, and if it is EVER proven false he will refund your money. Period. Any dealer who does not do this is NOT a repesctable dealer, and you have every right to blackball him, hate him, talk bad about him to others, etc. He is not the kind of dealer I am referring to. I am talking about someone like LostDutchman, TomB, Penny Lady, and many others here on CT and others not on CT.

 

"The shoulders of giants", my, my, I think you're giving dealers a little too much credit. I'd trust a numismatic researcher who is only a collector over a dealer any day. The collector is in it for the joy, the dealer is in it for the profit.

 

Unknowledgeable collectors may never know they bought a fake, whether purchased online or at a B&M. I don’t know too many dealers that offer an unlimited refund – most say all sales are final, no refunds.

I’m not saying there aren’t honest B&M dealers, but they are few & far between. The more the internet takes over the market, the more desperate they get, if they’re not able to adapt.

 

David Bowers is in it only for the profit? He is probably the most prolific numismatic writer. David Sear?

Many numismatic researchers become dealers to be able to be around coins they love. Becoming a dealer is not some kind of transformational act that sucks the soul out of a person. Like everything, there are good and bad ones. There are HSN, Coin Vault, and people of their ilk who will sell you a Morgan, a used pinto, or a copier. They simply do not care, they are snake oil salesmen out to make a buck any way they can. Sure, I hate, hate, HATE those SOBs. Most true collectors hate them, but they always exist since so many people are simply lazy and refuse to educate themselves.

However, to impugn men like David Bowers or David Sear, two dealers who have brought to light so much knowledge as to literally transform our hobby, I violently object to. Go back over most good coin books. MOST are written by people who were dealers. If I want an opinion on a coin, I will ask a good coin dealer. Do you really think anyone knows more about indian head cents than Rick Snow? Is Rick Snow evil because he sells coins, so no one should listen to what the man knows? What about David Sear, the single most knowledgable man on earth concerning ancient coins. Should his opinion and writing be tosse on the proverbial bonfire since he had the audacity to sell collectors coins?

I am just not getting why you hate dealers so much. Is it that they disagree with you on your position about modern coins?