How To Become A Coin Dealer?

Hah - I think this is basically what he posted on Coin Talk. http://blog.ha.com/2014/02/mark-felds-coin-collecting-tips/

 

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Selling at local shows and/or flea markets/antique malls is a good place to start. You will at least get a feel what sells locally and what doesn't.

 

And don't forget to invest in the books, a grading, variety and error, a subscription to a trade paper and a lot of patience.

 

What is your current knowledge base in numismatics?

 

I was wondering when someone would ask what should've been the first response.

This aside, toughcoins' post was certainly a fine addition and one the OP should think long and hard about.

While it's tough to say much more without knowing the OP or his situation, generally speaking I would suggest starting small and on the side as long as you're able to offer something of value beyond the coins themselves, that is unless antique malls or flea markets are the direction you wish to head. Your knowledge and experience in this hobby will dictate the path you may reasonably be able to take; without it you will likely be in for an unpleasant surprise if hoping make anything close to a living or sell anything above widgets.

 

I'm pretty sure he edited his post after I read it, very sneaky!

 

I am not a dealer but have owned 3 business. The first I just finally quit one day (not making money) the second I sold (not making enough money but enough to sell it) and the third I still do (farming and farmers markets) so, here is my 2 cents
1) PLAN ! WRITE IT DOWN, PLAN ! WORK YOUR PLAN, Review it, fix it, and work it some more. That means making a business plan (there are templates out there for little or free that will help you think through the questions you need to think through) and make a BUDGET. ugg, yes, a budget. If you have never done one, start with a budget for your home. It will take about 3 months of doing one every month to get the hang of it. It requires significant time, thought and effort but not all that hard really. You can do it. and you need to do it. (Your looking at that coin you would love to buy... wait, do I have room in my budget for that purchase? Buy right and make money!) You don't build a house without a plan, you can't build a business without one either. If you fail to plan, you plan to fail.
PLAN
2) Do NOT borrow money to start a business. Ever. 95% of business fail in the first year, most of them end up owing money and with their credit cards maxed out. Driven by the optimism that got them started, they keep leveraging until it is a really painful end. Please do not be one of those. Things that ruin businesses are the dreaded "D's" Debt, Divorce, Drinking, Drugs, Depression, Death (of a partner, don't have partners), Disinterest (its not fun anymore), Delay (on the tough decisions), Disaster (insurance can help but you can't really predict this one), Dishonesty (this one shows up in so many ways, lying to partners, wife, customers, venders you buy from, embezzling, tax fraud, oh my the list goes on, but in all its forms, it is destructive) and my personal favorite, Dumb. Well that last one we all are guilty of from time to time!
3) plan to loose money at first. Toughcoins already said that but you can pretty much count on it. (And the rest of what Toughcoins said sounded like pretty good advice.)
4) Remember it is a business, no longer a hobby. Don't fall in love with the product. It is that, product. When you fall in love you are emotional and don't make good business decisions. Like what you do, but don't fall in love with it. When it is time to move a product, let it go.
5) There is an old saying with many things "You make money when you buy" meaning if you buy right you can make money, if you buy wrong, you will never make it up.
6) Again I am not a coin dealer but I would think that some professional credentials would be worth working toward. PCGS maybe? I don't know but find out what is worth having and get it.
7) Find a niche and work it. Do you want to buy dealer volume from the US Mint and resell their products? (I know they sell to registered buyers who buy a certain volume cheaper than the retail web site.) Do you want to be the silver guy, the cent guy, the (fill in the blank) guy. Maybe you want to have a location where you let roll hunters dump their searched coin at your location and have regular service pickups for a reasonable fee (member fee for those who do a lot or per x$ fee for one timers? Remember they really want it free so it can't be much) Thereby bringing business to your door? Do you want to go to auction and yard sales and find good buys (sell some retail and move the rest wholesale)? Do you want to build relationships with estate attorneys and buy estates? There is so much to know, buy and sell in a single niche that you can never fill it all or do it all.
8) measure your time. It is your one constant commodity that you can not replace. Make your time mater.
9) another member said keep records. I totally agree. Find a simple easy accounting software with Point of Sale (POS) entry that interacts with your inventory (Quicken, PeachTree, and there are others). Learn to use it from day one and keep it up to date faithfully
10) Are you married? Talk it over with your wife and be sure you are in agreement. Really. Trust me on this one. This maybe should have been number one.

That's the top 10 here are a couple more ramblings.

11) Talk to other dealers. and just like you are doing here, talk to people. This is a GREAT first step you are doing!!
12) It was suggested to sell on ebay. while there is money to be made there, Ebay takes a pretty big slice (and they take it on shipping too) There are sites like WebStore that let you sell for NO FEES, but they don't have as much traffic either. Of course, you may have to spend on advertizing or rent space at shows. Or you may want to have a web site, but that takes money and maintenance (time) and you have to have a way to get people there to see and buy. What ever way you go, all these things cost money and take from your profit. Just be sure you are able to make a profit, and Ebay makes it pretty tough with their fees.

 

Wow--I am blown away at the responses here. For some reason I didn't get copied on the replies automatically here or I would have replied sooner. There are several posts that I will reply to individually--but it's just to late now. But I still have an unanswered question--how do I find the best way to buy coins at the best price?

 

Is there some way we could talk live sometime? My email is airchair94@gmail.com. You seem to be in the business and have some experience in this matter. I would love to learn what you have gone through to get to where you are. Thanks,
Roger

 

I dont believe there is a secret coin vineyard where dealers go to get cheap inventory. Dealers buy from anywhere and everywhere.

 

The best way to buy coins at the best price is to be there when the coin is selling, to recognise the value of the coin, and to say you want to buy it...

 

Buy from the public, either at your own retail location or shows.

 

I retired a few years ago and decided to deal in coins and bank notes. I'm renting a small shop in an antique center and open two days per week. Biggest problem is to let people know that you exist and are open for business. I signed up to a marketing company (reasonable rates) and I can be googled. I'll never get rich, but as long as my overhead is taken care of and I make a little on the side, Im content. After all, I get to do what I like.
I would say, give it a try but don't put a lot of money in it. I had been collecting for about 50 years and had a lot of stock and I'm still buying wherever I can. Must say it is getting more difficult to get decent stock for a reasonable price.
Best of luck, Fred

 

As someone who has recently transitioned from being exclusively a collector, to a dealer as well, I can speak to a number of points.

1. As mentioned, Learn to take losses and make mistakes, if you can't accept a loss (sometimes even BIG ones) then you won't make it.

2. Pricing coins for both buying and selling requires cross referencing a lot of different sources. Sometimes I will look at HA.com, the greysheet, PCGS coinfacts, and CCE, all for the exact same coin. Each one of those sources provides a bit of a different glimpse of the market in my opinion.

3. Learn from other dealers, be a student of the business and study hard.

4. Learn to grade. Grading is easy to learn and hard to master in my opinion.

With these 4 points in consideration you can start buying coins at "dealer" prices basically anywhere coins are sold. eBay, coin shows, auctions, ect.

It really just depends at that point how much time/energy/and money your willing to devote to it. Unfortunately its not an easy business to just start doing without a lot prior homework and experience. This is probably why most dealers started as collectors.

 

Most coin dealers I know started as "pickers". They were called "vest pocket dealers" as they carried their inventory with them. Knowledge is the key, and trust me it is a labor of love. Small local coin shows, antique co-ops, and ebay are good venues to start buying and selling. Your profit will be a measure of your expertise. Good Luck!

 

Hi Tom,

Well I'm not a pro by any means,lol. I started collecting about 7 years ago. Started with $5,000 in junk quarters--mainly for the silver content. Then thought I better try to get some knowledge on coins so I read the following books:

The Official American Numismatic Association Grading Standards
The Coin Collectors Survival Manual
The Official Redbook of United States Coins(2013)
The Official Redbook of Morgan Silver Dollars
The Official Redbook Of Washington and State Quarters
The Official Redbook of Linoln Pennies
Cherrypickers Guide to rare Varieties of United States Coins

After finishing those books I've attended as many coin shows as I can-- but there's not very many by me. I've just about completed a Washington Quarter collection--ms65 or higher(with the exception of the 1932D--it an ms64). Completed a Washington Proof collection from 1936 to current dates. Working on a Lincoln Penny collection. Have dabbled with morgans. Have a bunch of Bu 1996 American Eagles.
No gold at this point. Been on the photograde site with the photos of all the grades of coins. Still don't trust myself with grading--need to attend a couple of classes on that if possible. I'm usually on some type of website comparing coins 4-6 times a week. Been to the heritage archives and well as the Stack site. Spent hours on ebay--sifting through coins until I find couple that look good--then figure out what my max bid is--and hope,lol.
So that's about my total experience so far. I still have problems looking at high def photo's online and trying to figure out if there's imperfections--how they will really affect the value of a coin--mainly because they can be exaggerated on the photo's. For that matter sometime strike and luster can be hard to determine from photo's. Also have used the pcgs, ngc sites for price comparisons before I buy/bid
Thanks again to everyone who has responded.
Roger

 

I just came across this thread and realize it is old, but one question occurred to me which was not addressed.

Dealers need cash on hand to be able to buy new stock. What is the ratio of stock to cash on hand for a typical small scale dealer operating, say, a booth in a local flea market over the weekend? I wouldn't mind trying my hand at this in the future after I retire. I have quite a bit of stock, but wonder how much cash in relation to stock that I would need to be able to do it.