So I went in a coin shop today and a couple people were there trying to sell their coins. The coin shop guy was being brutally honest with prices. For example, "I would buy this for $15 and sell it for $17." "I will buy this for $615 and sell it for $640, but since gold prices are probably going up you should probably keep it until then" So this guy is claiming to make a miniscule profit per item, as well as recommending people with gold to hang on to it until prices go up. How does this guy stay in business?!
if he is a older man then he probably retired from his job and worked at a coin shop because he loves the hobby so he can rely on his retirement money to keep his shop open
Sounds like a decent honest dealer that was being upfront with the sellers. Most shops would not be able to survive on that low of a margin. As @BUZZING mentioned this person most likely does this as a way to support his coin collecting hobby rather then support a business with those prices. It is very nice knowing that there are still people out there that did not try to take advantage of these people by offering them a lowball price and pull a ripoff which happens far to many times to unsuspecting persons. It is understandable that coin shops must make a higher margin , or there would be none which also would not serve the hobby well. By letting the customer know what the coins were worth gave the customer the choice to sell or try and get a better deal which I doubt very much they would get any where else. Kudos to this fine gentleman for being honest ,and treating people like the way we all like to be treated. I really believe that the coin shop owner was only making minimal to use to purchase more coins for himself . Plus he sounds like he likes to deal in person with others that have the same interests. A very interesting thread. thank You Dillan
Just because someone says something doesn't mean it's true. There are ways for shops to sell bullion quickly so that could be it, but if its numismatic you can check inventory to see the honesty of it. Saying to hang onto something until prices go up can be nothing more than a polite way of saying I am not interested. Anyone who actually thinks metal prices will spike soon wouldn't be selling them
Or he could be claiming to be selling the coin at a lower price making it sound like he is giving them a good deal. He might not have been interested in buying gold at the time.
Either he is just saying that and not being honest... or he does enough small business to add up. I've found myself doing quick flips on fairly expensive coins for a quick $50. Not a ton of profit, but not a ton of time involved either, and they add up.
He's not making enough to survive if he's being honest. I doubt he is. It's not worth his time. There is a reason coin shops keep going out of business. They blame Ebay and that's a big part of it. They have to make enough of a profit to cover rent, other expenses, salaries and their own income. He's not selling enough things at a $2 markup (or even $25) to do any of that. Traditionally coin shops had around a 30% markup but that's not every transaction. Even at that rate you would have to gross 250,000 every year to make any kind of a living. So they need to do a number of big ticket transactions. He's not getting thousands of people to come in and make a $2 profit on a sale.
There are 2 Local coin shops in my town. I do business with both. One is a guy that took over his dad's store. He does all the local shows and has a good reputation with the other dealers and collectors. His overhead is low since the shop is connected to his mom's house. We are in a small city with pretty low cost of living. He consistently sells me silver at 1.25$ over spot, he buys it from me when I need cash for spot. I was in there a month ago and a guy walked in, they obviously knew each other. He bought 2k worth of slabs from this collector. I asked to see them and I picked out a 2015 NGC Isle of Man PF70 silver incuse Angel and 2017 PCGS IoM PR70DCAM 2oz silver high relief Piedfort first day. He said they would go for about 150$ on ebay. He also said he paid 25$&50$ and would sell them to me for 30&60$. I love the coins and know this is how he operates since I have been dealing with him for a decade. My best guess is he does about 300k/ yr and makes an ave. of 15% on that. The other dealer does jewelry too has close to a mil. dollar building next to the mall. They do way more volume but does about the same spread. I had an 1882 proof Indian for sale on ebay @1100 for 3 months. When I took a bunch of Lincolns in to them to have them sent to PCGS, I took it with me. He gave me 1k, which is better than what I didn't get from ebay. He was confident that it would sell it at FUN. I'll include a pic. at the end of this just cause it's so fun to look at. I get the best deals from both guys since they have known me for so long, basically dealer prices. Neither give bad deals to unknowlegeable customers. They are both fair and survive by being completely honest and making a reasonable cut of their volume. It is completely understandable to me how the OP's shop can stay in business. That's what I would be doing if I didn't have other responsibilities. I lose money every year keeping my website free because I love silver and hate ads. I would do business with the OP's dealer just because of the type of guy he is, even if it cost a little more. Just like I shop at the local market instead of walmart. Hurrah for the OP's shop.
Back when silver was like $16 an ounce, I went through his junk box and picked out a very nice 188-something Morgan with a small nick on the rim, for $18. Sans the damage, it would probably have been AU. Awesome!
Coins whose value is driven by melt often have small margins associated with them. Others have much larger margins
Low margins can be overcome by large volume, but that doesn't sound like this guy. Large volume is how outfits like Apmex can charge great prices - even if they only make a dollar per bullion round, but they sell a million of them, they still make a good living. But it sounds like this guy is more in it for the fun. He's probably not too concerned about profit because he has other sources of income. He probably is just making enough to pay the rent and electricity, but it keeps him active and engaged. The other alternative, as someone else alluded to, is that this is a marketing scheme. If you tell someone you'll sell it for $640, they'll be willing to accept $615 knowing that you need to make a profit. In reality, he'll turn around and sell it for $740, having talked the seller down to a lower value. Not saying that's what this guy is doing - but I have seen it done before.
