Question to dealers, buy offers

Yes

Hi Tone,

Yes indeed. As I mentioned before I have a note I bought quite a while ago, I see by the "guides" (even though I see they are useless now" that I think I can make a few bucks on this item and add to my coins with the proceeds. Guess it's just not worth it.
Then again, I see this item advertised for X amount of dollars and don;t think I am wrong in asking somewhere near that price for it. Dealers want to make a profit I know, but how much is the question.

?? I don't know..............................

Thanks Tony

 

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Ahh I guess if one looks at the markups that way you are correct Sir. I am asking questions beacuse I don't know. Thanks.

Tony

 

There is so many variables in your question.

There is so many variables in your question.
It depends. You say you do not care about greysheet, well that's one tool dealers rely on and sometimes 50% of retail is just about right. I'm not sure what you are expecting?
Is it not the same in all markets with many being much worse?
For instance, go buy $1000 worth of jewlery and tell us if you can find even one place that will offer as much as 50% of what you paid.
You see it does not matter what you think is fair or just. The only thing that matters is do you want to sell to that dealer at that price, that's the only thing that matters.
There are very few coins worth what we like to think they are in real life.
They are only worth what buyer and seller agree upon at the moment of sale. I hate to say it (again and again) but this stuff is not rare. 90% of this stuff is easily availible at most shows, shops and in collectors collections.
If you want to play outside of the norm your going to have to buy the coins (or whatever) that falls outside the norm. Those coins are few and far between but to work out some kind of formula for buying and selling without the above knowledge and the greysheet, I don't see how you ever could.

 

Yes I........

Hi Ben,

Yes I see what all you guys are saying. I am only asking because I don't know how the dealers go about making offers and what the percentage under retail their buy prices were. I knew they used the greysheet but never knew how it worked. As I said I have no problem paying retail for my coins, I just have never looked into this end of it. I will not be selling any coins soon I see that. In the long run with the coins that I collect it will never really be worth selling any of them. Put it this way I know much more now than I did this morning when I posted this thread so I did good.

I am not really expecting anything, but know I do know how dealers base their offers. Now that I know the price guides are useless too, I guess I'll have to base my retail prices in auction results and the like.

Going to a show on Sun and hope to pick up a few nice coins for my collection, that I do enjoy.

Thanks Tony

 

Pricing also depends on the particular inventory an individual dealer may be carrying at the time.

 

I once asked one of the better local coin dealers around here how he prices his purchases and sales. He told me he normally offers 80% of greysheet and sells at 100% of greysheet. That seems fair.

 

If you buy beautiful orginal problem free coins at fair prices

If you buy beautiful orginal problem free coins at fair prices and in the keys or semi keys of given series and hold them for 10 years or more you can be the one in charge of the final price in most cases.
The coins I am talking about are 1922-No D Lincoln in VF-30 or above.
1912-S Nickle in same, 16-P Std. quarter, 27-S quarter and so on.
I still no how no one that does this when they start and very few later on.
It's only human nature to buy coins that are lower priced and we generally want more than one or two coins sitting around, we like to buy many coins, This is exactly why the above is true.
Even after all I have learned if someone said "here is $100,000 and I want to make 10% on my investment over 10 years" I would not guarentee that I or anyone else I know could do that with rare coins.
You add in the fact that these really rare ones are not always even availible, or are not the right look or grade, just so many things it's not for the faint of heart.
I doubt that most coin dealers even make more than $10 an hour after all is said and done - it's not what people think by a long shot.

 

Keys

Ben, You hit the nail on the head. I have started collecting Keys myself. Cent Thru Half. They might not be in the higher grades but I did realize that a key is a key and that will not change. They will always be in demand from collectors, hence in demand to dealers too.

Tony

 

Here are some major factors :

Does the dealer think this will be a quick flip ? (i.e. it fills a pre-existing customer want-list or they've had folks asking for it) If the dealer thinks they can sell it quickly, they take a smaller margin and therefore can offer closer to retail. If they're concerned they'll have capital tied up for a while, they have to take into account time value of money and offer less.

Does the dealer have to put up their own money ? If so, it's their capital that's at risk so they sometimes offer less. If you offer it on a consignment basis, tell 'em how much you want to take away from the deal. Take into account a reasonable selling price and something for the dealer's time and trouble; you get the difference.

 

Oh, and another major factor (similar to one of Doug's earlier posts):

Is this coin the "same ol' same ol'" or is it unique and fresh ? How different is it from coins the dealer already has ? Obviously, dealers can't offer much for a coin that's just like stuff they already have and aren't selling.

The big point is this : there are perfectly honest reasons why two different dealers give very different offers for the same coin - either buying or selling.

 

Thanks 900, Yes, I see all this now. I do not collect rare coins so it is the same old same old, you are correct. Hence me starting on keys. Just have to hold on to coins that I accumulate I guess, no sense selling anything at such a loss. Learned alot in this thread today.

Tony

 

There are some dealers that take coins on consignment - like Rick Snow. And usually they charge a percentage. Not sure if Rick would take any old common coin, but for high grade IHC he is a good person to work with. I believe Tom Deck will do the same thing on Large cents - only the two I know. I am sure others would do it.

 

Presently, the market for collectible coins is similar to the market for many other types of collectibles (art, cars, etc). Because the economy is soft and money and credit are tight, many collectibles are not rising in value and are selling at the lower end of their valuations.

However, the price of silver has risen 46% in the last year. So, even if your collectible coins haven't gone up, your "junk" silver has.

A possible strategy would be to sell your "junk silver when you think silver has "topped" and buy collectible coins with the proceeds while their prices are still depressed.

Latest informed forecasts still indicate that silver will march towards $20/oz.
Bullion will likely outperform most collectible silver until the economy catches fire. That is likely several years away.

 

Thanks guys yes,,,,,,,,,

 

A "retail" price guide might be unrealistically high, such that some dealers might not even sell at those (high) levels. And if an owner of a coin has paid considerably more than the going rate/fair market value for it, an offer of half of what he paid might not be unfair.

My point is that a fair price for a dealer to pay is based on a number of considerations (apart from so-called "retail"), including the quality and eye-appeal of the item in question, as well as what similar coins have been trading for, what he would try to sell such a coin for, how liquid he thinks the coin is, etc.

Generally speaking, if I am a seller of a coin at $1000, I would be a buyer in the $850-$900 range. Other dealers might have smaller or larger margins, depending upon the type of coins they handle and how rich they are trying to become.

 

You know the one thing I did not see mentioned is the "grading of a coin". The seller's opinion on a coin and the dealers may be vastly different. I have seen my local dealer explain the price he gave to people on why his offer was what they considered low. It was interesting to hear some of the discussion.

 

Good point, Mark. I was thinking and speaking in terms of coins that had been certified by the top grading companies, but perhaps the coins in question were otherwise. And if so, half of "retail" might have been a very fair (or unfair) price for a dealer to have offered.

 

Yeah I figured most of the discussion was around graded coins - but even then I don't think you would offer the same for any old graded coin. As mentioned before not all 64's(for example) are the same. My local coin shop seldom has many graded coins. I have often wondered if they crack them out. I will try to remember to ask them.