I know that some some of the members here are coin dealers. I'm 21 years old and have been thinking what type of career I want to try out. I know I'm young and I can always change career's in the future. I was wondering what I need to become a successful coin dealer. These are some things I think I would need: Coins to sell (obviously) Money to put into more coins and PM's other people want to sell to me A shop to lease, but I could start out on e-bay and in coin shows and stuff Friends in the business Perhaps some business and economy classes at the local college I'm just doing some brainstorming. Anything else I would need? It would be great to hear from some of the current dealers about where and how you got started in the business.
To become 100% legitimate Coin Dealer takes big money and than quite a bit of available cash to buy . So unless your quite well off in the financial department, it's going to be very hard to become a full time professional Coin Dealer.
It takes money and business expertise (buying low / selling high) to be a coin dealer. You can be a small, part time dealer on a $10 k capitalization. This will enable you to get enough coins to fill up a case at a coin show to get a market presence at least in your area. You can usually find an Allstate show case in the $60 - $100 range plus a light at Target for $15. This is how I started while working as a Financial Analyst after getting my MBA. But if you try to go to big shows or travel then the overhead costs will gobble you up. It takes a $100 K capitalization, preferrably $250 K and higher. Lets say a show has a table fee of $200 and you do $2000 total buying and selling with a gross profit of $150. Allocate the fee $200 show cost between the sales (selling expense) and purchases (inventory cost) at 10%. In this way you can get a feel for how the show circuit performs for you vs the Bay and Teletrade to see if its really worth your time. Simply put, to be successful as a dealer you will need to master buying low and selling high. A shop with walk in traffic enabling you to "buy it right" is a huge plus. As a shop owner I am able to buy stuff at 60-65% of CDN bid (or less) and then flip it on the Bay or at a show for an immediate profit. In addition, a bullion and inventory stockpile will accrue profits in a rising market. Ten Cents on the dollar does not make it in the coin business and I have never operated that way. At a show I am there to buy and sell at my price and don't wholesale to anyone unless its something I am trying to dump or else I am making money on it. Keep your greysheets hidden and if someone tries to pressure to sell at bid or wholesale just politely say "I dont do wholesale." If they ask what bid is just say "I dont have that available." If they press you further just say "I told you the coin is priced at $165, thats what I have to have for it if you want it." Dont take checks, if they have the money for it they can find an ATM. As far as dealers saying "Well everyone in the room knows I am good on checks." I tell them "I dont give a hoot who you are I take cash and will gladly take any of your bullion related material in trade at melt." I once took an MS 70 Gold Eagle at melt on such a deal. If they want to trade classic slabbed coins for a purchase I will usually offer a trade in allowance of 65% of CDN Bid. Remember your not at a show to buy and sell with dealers unless there is a compelling reason to do so. They are your competition, not anyone you should bend over backwards for. Learn how to get rid of people from your table who might try to interfere with a deal your doing. Remember, if you have someone at your table who is making a deal which is one that really makes your show (high profit retail or super buy for you) they have priority. If someone trys to horn in on your deal (interfere) you need to get rid of them asap without alienating the potential buyer or seller your working a deal with. If you don't have big money to invest in your coin business (at least $100K) then you will need a real job that pays money until which time (if ever) your coin business generates revenue or has a bullion next egg that enables you to free your self from working for someone else. Years ago I loaded up on silver coins of all types and it is reaping huge rewards for me now. I have also made huge profits selling World and US Currency. You will run into a lot of buyers at shows who have a greysheet in their hip pocket - forget about making much money off these guys (they dont pay retail) unless they have something to sell you at a price which will work for retail down the road. Its easier to make 100% on a coin you have $100 in than one you have $1000 in. If you have too many big ticket coins, you will pay dearly when you have to blow out some to pay bills. The more your business position is composed of cash for deals you can buy right then the better you will do. If a big gun dealer is looking at your coins seriously, he is probably smelling rip (crackout). This could be a flag to you to possibly resubmit it if you dont sell it to him. Some of these guys I would swear get their stuff graded favorably bc the TPG sees their name on the invoice. At the end of the day I like to see a markup over cost of at least 50% over what I have sold. Once overhead costs hit I am doing good to make 15% on my inventory. At a bare minimum IMO, it takes a markup over cost of 40% to make it in the coin business. Its a hobby related retail business like any other. I have seen good people with strong numismatic skills fail horribly in the coin business because they simply were not tough enough to buy low / sell high or have the business sense to make it work for them. Others with barely rudimentary numismatic know how have done well bc they mastered the business end. But more than anything else it takes big money $100 K and up to really get in the coin business. I find it exciting going to shows or operating a shop buying low and selling high. For me its the thrill of the deal.
I am not a coin dealer, but I think your idea of "perhaps some business and economy classes at the local college" sounds like a great plan. Education is key. Good luck! TC
One thing that hasn't been discussed is the extent of your knowledge of grading, improper cleaning, NT/AT, counterfeit detection, etc. You might want to consider taking some of the courses offered by the ANA. Chris
Before you take the plunge get your education. ANA offers a 5-day course at Summer Seminar on what you need to know before you become a coin dealer. I took the course several years ago (and I am not a coin dealer). I would highly recommend that you take this course before you commit to becoming a coin dealer. ANA also offers courses on Coin Grading (Beginner, Intermediate and Advanced) and Counterfeit Detection that will pay for themselves many times over if you become a coin dealer.
Player 11, thanks for probably the best dealer post I've read on this forum since I became a member a year ago. It really is all about buying low and selling high. Much easier to say than to do. You confirmed what I suspected, most dealers make their money when they buy the coins. I guess my question is, with so many educated buyers out there, how do you sell coins at retail prices? You probably need a good sense of what's "hot" at the moment.
+1 Your right on some parts but I am a dealer and work on OPM: other people's money. Start small by buying and selling at a profit. That is what I do as well as working for a shop and private dealer.
Dang, I could never become a coin dealer. Too much "Christian" in my background. I'd wind up giving it all away......
Good credit, because most dealers don't put up their own money, but borrow a lot of cash to get started. No credit, no money. Guy
