So when dealers discuss their results from a show, they typically break it out into 2 categories, wholesale and retail. I would suspect that the wholesale prices are better than the retail prices. So what defines a wholesale dealer vs a retail deal? If I walk up to a dealer and say I am dealer, will that automatically institute wholesale pricing? Hopefully a dealer can respond and explain the process. Are their wholesale only days at shows where customers aren't allowed, only dealers?
Retail is a mark-up of wholesale cost, anywhere from 30-40% depending. Wholesale is at cost or slightly above. Example: US Mint sells at retail, mark-up of what it cost them to produce an item. Let's say it cost the Mint $12 to produce 1 proof set(I'm sure its more but for the sake of the example). If they sold that set at $12 they break even on their cost to make the set, no profit. They mark-up the price for a retail cost to the consumer, so they cover their cost of production, and make a profit.
A wholesale deal typically takes place between 2 dealers. But occasionally, a dealer will sell to a collector at wholesale prices. No, if it did every collector in the world would just walk up and say - I'm a dealer. Most coin dealers know each other, or at the least know of each other. For those they don't know or know of, it's not hard to prove you are a dealer if you really are one. Yes, but a collector can often purchase the right to enter on that day. That doesn't mean that the collector gets to buy at wholesale though. What it means for him is that he gets to see all the goods before any of the other collectors get to see them. It gives him first option to buy.
Frankly, the spread between wholesale and retail (bid and ask) is not usually that much different. In my friends shops I see them all day long buy and sell at less than 10%. Maybe for smaller items the spread is greater. Most times if a dealer pays say $1800 for a coin, they'll more than likely sell at 1950 to 2000. A $200 profit multiplied by say 200 transactions daily adds up nice. Guy~
Sometimes dealers will sell to other dealers on wholesale if they need to unload something. Say Dealer A gets a great price (below wholesale) on a truck load of Buffalo Nickles. He knows he can't move them all. So he sells them wholesale price to Dealers B, X, and Y. In reserve, Dealer Joe knows he has a client that wants a 1841 Liberty Seated and know what he'll pay for it. So he goes to other dealers looking to buy it wholesale pice.
