looking at prices coins make on ebay im curious to how all these sellers on there make money.Im even more curious how people can afford staff and premises.I know this thread is a bit of a cheek and i know many will say its learning and trial and error and making contacts ect.But what i would like to know is what are all you guys bread and butter dealing that pays the wages and the rent. i have bits and pieces up on ebay in the uk just now with this nick i use on here.but to be honest i would pay the prices im selling these for myself.Then i look around the net looking for bulk wholesale ie rolls of morgans or peace dollars or mixed bulk coins ect.And i still cant see where the profit is in these going by prices achieved.So where am i going wrong ? , and how come others like dealers on here can make a living at selling coins. I think ive answered my own question by saying these can sell them at a profit ie they must be buying them a lot cheaper, so my other question is how can they be buying them so much cheaper to be able to make a profit than i can.I have cash at hand and a brain in my head,i still cannot seem to purchase cheap enough to make money at re-sale of the items.I know i aint a dealer far from it but i think dabbling a bit is the way to learn best you learn about coins more in the end and less chance of getting ripped off.It gives me a good insight into the coin world and teaches a few lessons.It also gets rid of un-wanted coins
You have answered most of the questions. As a non-ebay dealer, I have a relatively large staff compared to most. We have 3 offices in three different states currently. There really isn't a trick or secret. Most of our buys and sells are between dealers. (About 80%). Buying in bulk is one form, and the other is simply cherry-picking. Being able to spot the small differences in grades, or the ones that sit right on the border between the grades. When selling at retail, it is just a matter of knowing what the market will bear. This takes lots of hours each day on the dealer networks and on the phone. Building a client base takes time and effort. Staying up to date with what your customers needs are. We deal with a handful of registry set collectors that pay top money for the nicest coins available, so that makes buying easier. Then comes where to sell. We use large auction firms such as Bowers and Merena. For choice quality material, there simply isn't a better venue. Large shows also offer the ability to buy and sell lots of material. Too often, people confuse the profit of a single coin with how we make our money. The only secret is volume. I can sell coins at very little profit, and move lots of volume. When you want to make money, just find a coin that you can profit $1 on, and sell a few thousand coins a week. It is basically a numbers game. Volume = Profits.
yeah volume i have found that very small pofit margins, to make profit you need to shify a lot of volume.This however takes a lot of money. i have been buying mixed lots of foriegn coins from people that look like they dont know much about there coins then working through them for anything valuable then just selling them back on.Got a few nice coins like this but definetly would need a lot more of these to make some money outta it and there just aint the volume of this source on ebay. you say 80% of trade is between dealers there must be lot of fresh money coming into the trade to pay all the dealers wages.or they coins would just float about as if in a mini stock market. i think your so right its volume i had to ask because im wondering is there something im missing ive just purchased just over 400 ounces of 50% silver uk coinage from a couple of sources and intend breaking up into small retail lots of nice mixes andgiving that a go.I think though im looking at making only tops 1.50 uk pounds off each transaction so to make good money i would need to sell a lot of volume.I also sell 1 gram gold bars that are bought mostly as a novelty but these im making very little on due to competition.
Electronic auctions are successful because buyers are untutored. Buyers believe that they are getting a bargain, no matter what price they pay. Also, the final buyers ("ultimate consumers" in marketing jargon) are emotionally attached to the purchase. "L@@k at what I just won!!" Won. As if they actually "won" something. The dirty, unspoken truth is that for one buyer to get a great price, one seller must have sold too low. So, for the great buy the last person in the chain gets, that person must ignore the reality that their purchase is worth much less than they paid for it. Again, for the last buyer, it does not matter: they MUST HAVE that Morgan Dollar MS-65 PCGS or whatever. When they go to sell that Gem, they take a loss. Generally, and traditionally, dealers buy collections. The dealer is stuck with a lot of useless junk that sells at a lower margin in order to get the few items that sell much better. To buy and sell as you seem to want to, you have to get to the primary sellers, i.e., to heirs liquating estates. There are many, many, many. many other factors. Having the material that OTHER people want to buy is one key. In ancients, for instance, my passion is for small Greek silvers. But "everyone" wants Roman denarii of Nero, Julius Caesar, et al. In US coins, you can be hot for Seateds, but "most" people want Morgan Dollars. In Canadian, decimal coinage is the mainstream. And so on. I do not know who you are referring to when you talk of people with staffs of clericals, but "most'" electronic auctions are one person affairs. Staffs of clericals are more typical of the VERY established houses, such as Harlan J. Berk, or Sotheby's. One other note: While working on the computers of a commodities trader, I learned a maxim that most people sell into their misery. When you get the news that someone made a killing, you can be sure that they did not brag about their many losses. I suspect that there are astronomically more losses going on. When a collector brags about making a killing on an item, remember that they are sitting on a huge inventory of unsold merchandise. They are mute about that. We could beat this to death. We probably will. The bottom line is perseverence tempered by wisdom. In other words, success comes from staying with it through thick and thin... unless you cut your losses and get out. Michael
Seems to me the really big money is made by the large auction houses (Heritage, Bowers, Superior, ANR, etc) -- they make 15% on every auction, regardless of the selling price. But the barriers to entry are extremely high -- these auction houses have been in business for decades and even generations !!!! Bottom line --- there is no easy way to make money dealing coins. Like most businesses, it takes hard work, hustle, and perseverence. When I was a kid, I wanted to be a coin dealer, but now I am happy just being a collector/investor!!
i think being in the uk has some advantages and some disadvantages for me. advantages are that buyers are as you said not as informed about usa coins, and also fewer of these are for sale here.though there does seem good intrest for them.especially of course the morgan dollars.thus is also true with buying especially not so popular usa coins like dimes or cents there is not that many collectors of them but like i said everyone loves a big shiny dollar. the disadvantage is aquiring coins is a lot harder you have to deal mostly on the internet there aint no big usa coin fares here.So you miss a lot of stuff and instead of buying straight from your buying from someone thats marking up what they bought at a fare.you are also paying large postage costs which eat into profit again. in british coins the market here to me looks similar though here coins of low mintage and high grade still dont realise prices you would expect.we are awash with good grade coins of 100-200 year old that are not making much more than silver or gold bullion value.
something else i was wondering was presentation, is it worth buying boxes to say hold a morgan dollar or a peace dollar and selling them this way.im wondering if that would recieve better bids when retailing.
