most of the coin dealers I work with use the CDN and add 15% or subtrack 15% dependent upon selling and buying. I have found this to be a common practice. Obviously you don't want to sell a coin to this dealer and buy it back right away. Do you think the 15% rule is fair, remembering these guys are in the business to make a living and have overhead. I would like to make 10% on the coins I sell on ebay but rarely do. Suggestions?
Interesting question. 30% might be fair. In a free market, though, mark up is rather calculated by what you can get instead of what's fair. But, also consider this; is 30% a fair mark up on a $5 sale? is 30% fair on a $3,000 sale? Personally, I'd be a whole lot more flexible on the mark up on that $3,000 sale than on the $5 sale.
I have seen some coin dealers that will sell a coin at cost or even lower. It depends on how long it has been in their inventory. Just keeping a coin in your inventory cost you money. How ? - by tying up money that could be spent on a coin that will sell and bring him a profit. So the real answer to this question is that it depends on the given coin. Something that a lot of people don't understand about business period - let alone coin dealing - is that you have to have things in your inventory that will sell or you will starve to death. Having all of your capital tied up in stuff that nobody wants to buy does you no good. You have to stock the items that everybody wants to buy ! So if you are looking for a coin that is very popular with collectors - don't expect to get any really good deals. Those are the coins that a dealer makes his living on. And on these coins his markup % will be higher. But the stuff that he has had in inventory for a while - now there you can get a deal. So many times it can pay off for the buyer to be patient. If a dealer has a particular coin you want but the price is a bit too much - then walk away. Come back next week - or next month. If that coin is still there - odds are he'll be willing to sell it to you cheaper. He just can't afford to keep his funds tied up as his livliehood depends on turnover - not so much on markup percentage.
A lot of dealers are tight fisted and will not let go of their coins for a smaller mark up, let alone at a loss. Coins are not the same thing as stale inventory.
I will admit that some coin dealers are tight fisted Bill. For that is the nature of business. But to a coin dealer - coins are exactly that - inventory - nothing more - nothing less. And no business can afford to have inventory that continually sits on the shelves and does not sell. At least if they want to stay in business.
GDJMSP said: "So if you are looking for a coin that is very popular with collectors - don't expect to get any really good deals. Those are the coins that a dealer makes his living on. And on these coins his markup % will be higher." And then, again, a coin that moves will have a lower markup than one that does not. With ancients in particular, a 100% markup or a 50% mark down is common because no one coin in that market has the draw or appeal that a common Morgan in an MS 64 slab will have. And coin dealers, not matter how prosperous, are not necessarily rational about business. Each of us does what we do and we fall into patterns and habits that work. I agree that it seems irrational for a dealer to hold on to inventory that cannot move. But, as has been pointed out, coins have long shelf lives, so if this coin does not sell that one will and this one will stay in the safe another five years. Also -- and this is a minor point, 15% above and below CDN is not exactly the right formula. See the comments above. If you mark something up 100%, then you have to mark it down 50% to get back to the original price. If you mark something up 50%, its new price is triple the markup. So, too with the 15% increase or decrease.
