Dealer-To-Dealer Trading @ Coin Shows

Discussion in 'Coin Chat' started by GoldFinger1969, Apr 7, 2022.

  1. GoldFinger1969

    GoldFinger1969 Supporter! Supporter

    Something that I don't understand ....GD here has said that 80% of the business at big shows might be dealer-to-dealer BEFORE the show even begins. That's how lots of dealers get inventory.

    Questions: If the dealers sell their stuff at full price (retail) to the dealers...who then have to tack on more to make a profit...how is that price competitive with the market price ? And if the dealers give a discount (wholesale pricing) to their dealer friends so the price they sell at is competitive and also lets them make a profit....aren't they leaving money on the table ?

    I'm confused when I see dealers say they bought dozens of coins from other dealers, sometimes 1 or 2 dealers. Didn't THOSE selling dealers leave alot of money on the table by not selling their stuff to the retail buyers who'd be coming en masse to a show ?

    I get selling hard-to-sell stuff at a slight discount if you are stuck in a coin shop, especially in the pre-internet days. But why sell wholesale, especially at a coin show, if you have the internet and coin show traffic to see all your stuff and pay full price ?
     
    David Betts likes this.
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  3. ToughCOINS

    ToughCOINS Dealer Member Moderator

    Selling at wholesale is part of belonging to the dealer community. In order to be able to acquire needed coins at a profitable level one must similarly be willing to part with coins at a level profitable to the other dealer.

    Generally, the more available the coin, the more room that can be found between retail and wholesale and vice versa.
     
  4. GoldFinger1969

    GoldFinger1969 Supporter! Supporter

    But you would not sell another dealer coins at break-even -- or even a loss ? -- for the community, right ?

    Maybe the Secret Sauce is bid-ask spreads for coins, TC ??
     
  5. MK Ultra

    MK Ultra Well-Known Member

    Daniel from CoinHelpU on youtube occasionally posts dealer to dealer transactions both ways. Not being intimately familiar with some of the aspects of being a coin dealer, I suspect they know what they can sell and can't sell, and what level of velocity they want.

    - They have an established loyal customer that wants that 1921 D, they find one and maybe they're only making $X, but the wholesaler gets cash flow and hopefully makes $ too.

    - The wholesaler is a weekend warrior, doesn't know what they're doing, needs money for some emergency, or retiring and wants to move bulk amounts.

    - The 'sale' is really a trade, and both dealers get product they think they can move.

    Dealing baseball cards in the late 1980s, Rich Altman would come by everyones table and flash cash and buy out stuff. The promoter that I worked for had me set up one weekend and gave me boxes of 1990 upper deck football that he got before anyone else. He didn't want to have to deal with Rich directly, so he forced me to do it. I also had a 1984 USFL set that I had bought at a store for cheap, another dealer bought it because they felt it was going to appreciate more. But I had put it out at other shows and nobody bought it.
     
    GoldFinger1969 likes this.
  6. Randy Abercrombie

    Randy Abercrombie Supporter! Supporter

    You have to train your mind to think of it as business. Having your cash tied up in inventory costs you money. Having to carry it to the show, pack it up and carry it back costs you money so often selling at wholesale is your best business move. Back before Covid my dealer buddy traveled the nation going to shows and I often handed him my wish lists. Whenever he found my coins he always brought them back to me at a fair retail cost so I’m sure he bought them at what I would call a wholesale level.
     
  7. ToughCOINS

    ToughCOINS Dealer Member Moderator


    That's actually how I got started . . . deciding that I had to sell coins for less than I'd paid for them as a collector, in order to break into the dealer ranks. That was a very different time for me, however, as I was working mostly with common coins at that point, for which the price guides are usually much more reflective of reality.

    Dealers in common coins use Grey Sheet for its convenience. It saves them the need to constantly refresh pricing in their minds for what amounts to too many dates and grades. Grey Sheet used to publish Bid/Ask spreads years ago, but no more. Most dealers did not adhere to those spreads, and the maintenance of that extra data was surely a burden on CDN which paid few dividends. Besides, computing spreads in one's head is easily enough done by most.

    As for a secret sauce, when I was a collector I used to think Grey Sheet was it, but it isn't. Grey Sheet does not make the market . . . it follows the market, although it follows it more closely than any other widely distributed resource. My opinion is that there is no secret sauce or, if it must bear a name, it is experience.

    There are some dealers out there who have seen most every example of the rarest of coins, and never forget what they've seen, and how much they sold for, and when. Grey Sheet means nothing to them. They know the owners and what they're willing to sell for, and the potential buyers, and what they'll probably pay. That's rarified air, and I have the utmost respect for those encyclopedic minds . . . I'll never get there.

    What you buy and sell should determine what you use to arrive at pricing and, just as importantly, what you use for pricing will determine how successfully you buy and sell. Just don't forget . . . price guides are merely guides.
     
  8. johnmilton

    johnmilton Well-Known Member

    When I retired and was no longer a member of “the club,” the price quotes shot up for me immediately.
     
    GoldFinger1969 likes this.
  9. David Betts

    David Betts Elle Mae Clampett cruising with Dad

    Wish I could find that guy in Maine got about 100# s of good 80's cards and no markets!
     
  10. imrich

    imrich Supporter! Supporter

    Yes, a collector/seller may sell at wholesale or less to the "community", which I do all of the time.

    I sell above normal quality/value coins at less than "Grey Sheet" in bulk, no negotiations from my written contract.

    I know when I've a serious buyer by the statement "I'll take all that you've got" at a meeting place some distance removed from a normal urban location, as stated in ad.

    The "community" wants to negotiate, not purchase, as you have admitted.

    The object appears to be to be reaching an unreasonable hypothetical price.

    When future buying occurs they can state availability at the unreasonable price, as I've experienced here with you and others, quoting past available prices.

    I just finished a PM to someone here that made an absolute statement about coins I offer in Uncirculated condition on a public meeting site.

    They stated that regardless of various factors they were a buyer.

    I normally would just disregard what I considered a rash statement by buyers here.

    I offered what was stated as wanted, where a response was with a new variable.

    I responded with a final offer, which normally will be rejected for some reason, as one I provided in my complete polite response.

    The "community" doesn't appear to understand Quid Pro Quo.

    More community people should watch the infamous negotiating program for funding of incompletely established businesses.

    The Sharks are believed fantastic.

    JMHO
     
  11. GoldFinger1969

    GoldFinger1969 Supporter! Supporter

    Absolutely understand...and I get selling an occasional bad purchase at a loss so as not to tie up $$$ in stuff that isn't moving.

    But you can't do it for TOO MUCH inventory, right ? You can't keep selling stuff at a loss to "free up cash", right ?
    This makes sense, thanks.
     
    Randy Abercrombie likes this.
  12. GoldFinger1969

    GoldFinger1969 Supporter! Supporter

    Really ? Wow.....that's surprising (to me, at least).
     
  13. imrich

    imrich Supporter! Supporter

    A licensed "Dealer" has expenses that the average collector who wants to enjoy the "Grey Sheet" pricing should not be allowed the legitimate advantages.

    I was informed that the "Grey Sheet" is meant only for individuals who can show their license and bond required in our state.

    Severe penalties can be imposed including collection confiscation and imprisonment for individuals violating state legislation.

    Licensed Dealers may be exempt from personal sales taxation but has an exemption document.

    A lay person may believe they are also exempt, not properly paying due sales tax.

    There are other advantages for a licensed Dealer, but numerous afore-stated disadvantages and regulation.

    JMHO
     
    GoldFinger1969 likes this.
  14. Randy Abercrombie

    Randy Abercrombie Supporter! Supporter

    My best dealer buddy found my bucket-list coin (my avatar) for me on a dealer only website. Man, I tried to bribe him with women and liquor to let me have that website address. Alas, no luck.
     
    Last edited: Apr 7, 2022
    GoldFinger1969 likes this.
  15. charley

    charley Well-Known Member

    I disagree.

    That is not fact.

    That is not fact, in reference to CDN publications.

    QUOTE="imrich, post: 8290512, member: 22331"]Licensed Dealers may be exempt from personal sales taxation but has an exemption document.

    A lay person may believe they are also exempt, not properly paying due sales tax.

    There are other advantages for a licensed Dealer, but numerous afore-stated disadvantages and regulation.[/QUOTE]

    Everyone pays the taxes at some point in some manner.
     
  16. imrich

    imrich Supporter! Supporter

    Everyone pays the taxes at some point in some manner.[/QUOTE]

    I believe you're correct about acquiring CDN documents.

    One may be in trouble using the document as a buy/sell justification for transacting as a "Dealer" who generally needs licensing and liability bonding.

    The law is complicated and circumstances dependent.

    The State Sales Tax is believed due upon transacting, thus supporting eBay automatic collection.
     
    jamor1960 likes this.
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