I see threads on dealer pricing and/or gouging. When I first got into the biz in the mid '50's the buy/sell of coins was, with rare exceptions, fairly consistent. Coin World had a mid-section to its paper that listed the retail trends of coins. Most dealers used that as a pricing guide. There were no slabs back then and grades such as AU53/55/58 were not used. An AU coins was just that. Sometimes we used Choice AU for a super super slider coin. When grey sheet came out with dealer/dealer wholesale pricing I remember I had to send in my Sales Tax license copy to verify that I was a dealer to subscribe to it. But, through the years, it became available to the public and the public seemed hell bent on buying at those prices. I was on Facts Teletype for many years and dealers stuck very close to bid/ask prices. I could easily sell a roll of 50D BU nickels at bid to other dealers with no problem. Today that wouldn't work in most cases unless the dealer has a very quick flip on the product. Then came the 80's with high interest and a changing coin market. Many dealers started to offer coins at around grey sheet pricing to the public. And, of course their buy prices went to 10-30% below grey sheet like todays market. Being a dealer now I base my buys on how fast I believe I can turn the product. A fast moving coin/set we will buy at 10-15% below bid. Slow moving stuff goes to 20-35% below bid. Another factor coin dealers use is: 1. am I flush with cash right now, 2. is my inventory low, 3 am I turning my inventory fast. If yes to all those my buy prices will be high. Opposite position: 1. am I cash short, 2. am I stuffed with inventory, 3. is my turnaround very slow ----- well, then I offer much less. I am NOT trying to lowball and scam the seller --- I am being realistic with my financial and inventory position. Considering dealers cost of operation dealers cannot work on 10% unless they always have the same amount of people in their buying line as they do in their selling line. If we could easily and readily buy/sell 100K worth of coins a week most dealers would work on 5-10%. But, it's not always that easy when you factor in all the costs to make a decent living and pay your overhead. When a legitimate dealer offers 35% back of bid for your coins, unless he/she is a shyster dealer, it is taking all the above into consideration. Most dealer to dealer transactions today are below bid -- that's right, below bid. Unless it's a super rare coin and the dealer has a home for it right now those are real facts today. You just cannot get bid from a dealer on common stuff (i.e., proof sets, mint sets, modern commems, current BU rolls, etc.) If you could I'd go to the bank, pull all my stock, and ramrod it down the highway to that dealer --- and really grin when leaving with a good check. Greysheet is a retail price guide today --- simple as that. Even slabs, that cost money above the coins value, rarely are easy to sell at above grey sheet. Just try to sell common date MS65 morgans at above grey sheet to the public. Sure, it can be done sometimes, but it's not an everyday occurance. Most go between bid/ask. So, that means the dealer has to pay 20-25% back of bid if he wants to flip them fast to a dealer -- he needs some wiggle room. If he pays 10% back of bid he will sit on them for a while as they trickle out to the public (who, by the eay, has a copy of the grey sheet in their back pocket). Times have really changed over the last 50 years in the coin biz. Are there exceptions to all the above --- absolutely. Nothing is written in stone but, as a dealer, you do have to be very very informed on the market to know what to buy, when to buy, what to realistically offer --- and then, hope you come out with a profit at the end. Hope I didn't bore you all with this long winded post. :whistle: Peace to all :thumb:
As a buyer, it is nice to read an article like this one that explains the point of view of the seller/dealer. I've had very good luck with the dealers in my local area and now I can appreciate the things that must run through their minds as they negotiate the selling price of their coins. Thanks for the insight.
I've explained the same thing a hundred times, but many collectors refuse to believe it or think I am just making excuses for dealers. Far from it - I am just explaining reality. That said, there is one thing I would mention Jerry. I agree completely with your comments about coins selling at Grey Sheet, but then you are speaking about the here and now - a falling market. Things tend to change in a rising market. For example - 2 years ago the public could no more buy at Grey Sheet than I can fly by flapping my arms. They had to pay more than Ask. Now of course, because the market is falling, and most think it will continue to fall, they will not pay more than bid. And the dealers are happy to do that just to get rid of the stock so they don't go further underwater with it.
Based on the comments above, I see that my perception as a buyer of coin prices appears to be wrong or at least not fully thought out. I have been looking at CDN as dealer-to-dealer prices. I have been looking at Coin Values as dealer retail prices. And I aim to pay about halfway between. Since I haven't sold to dealers I have never considered what dealer buy-prices are when dealing with collectors. It makes sense that the prices would be less than CDN otherwise how could dealers make a profit selling to each other. Since I'm not the only one who won't pay Coin Values prices to acquire a coin, it makes sense that to make a living a dealer has to buy from collectors at prices significantly below CDN Bid. I think I have the general picture now. And I think it's safe to further generalize that: - dealers make a profit selling to other dealers - dealers make a living selling to collectors
Good post! Some people should watch pawn stars on the history channel. That is reality of how some businesses work. Fun to see some of the bills and stuff that comes into the store.
I totally agree with the OP that if you are going to stay in business ...any business....you must make a profit...or close your doors....but I can see why some people including myself get upset at the way some dealers do business...example....one of the things I enjoy collecting is circulated silver dimes...kennedy and winged liberty...and since my budget for coins has always been pretty meager I used to go to a very well established and respected dealer in my area buy his 90% silver at 14-15x face fill the holes in my folders and put the rest in my small junk silver hoard...now I never really had an issue paying the price ..but I was somewhat recently in need of cash and went to the same dealer to sell some silver and was offered 9.50 x face...now silver has gone up 2-3 dollars an ounce since my last purchase so needless to say I was pretty upset by his pricing..since then I have done my best to start and really educate myself about this hobby , and changed dealers ....all things considered I understand his objective as a dealer is to make money, and maybe that is the going rate, but it rubbed me the wrong way and until I get the education( one of the reasons I am on this site..I have been learning alot from everyone)I wont be as quick to buy coins from anyone..
In all honesty, I'd reverse that kanga. Fully 80% or more of all sales made by a dealer are to another dealer. They rely on sales to other dealers to make their living. Sure they make more profit on sales to collectors than they do dealers, but if they relied on sales to collectors only, coin dealers would be out of business in a month.
Agreed. I would also say that I think that 80% is just about right in my particular circumstance. Collectors are only looking for 1 or 2 or 5 or 20 coins in certian grades... their range is narrow. We try to stock those coins in the cases... but what to do with the rest? I know some dealers who will price anything you throw at them. That is why we sell so much to other dealers they aren't picky and when you need or want to turn your inventory liquid you have to do what you have to do. We don't necessarily make money on everything we buy either. Lately with the softening market I have sold quite a few coins at a loss... but I'd rather have the money in the bank for the next deal then dead inventory I can't sell.
A very good post. I agree with it whole heartedly. I have often sold coins to dealers and I have been realistic in my asking usually expecting 20 to 25% back of bid. The problem I have nowadays is that some dealers will offer me no more than 30% of bid for, yes, common coins but high grade, well preserved coins in high MS conditions. And the problem is that has not been an isolated incident but is starting to become a pandemic. It bothers me to think that this isn't just shysterism but a large downturn in the market that could have much further effect on the hobby as a whole.
