Where do dealers get their coins??

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what newbie miss is that dealers know the other dealers and we buy and sell to them at reduced prices because we like them. Demanding collectors who we don't know (or dealers we don't know for that matter) do not get the same deal as the guy I do 25k in business with every show who I always find a night at each show to go have dinner with. This is quite simple actually.

 

I'm not sure where they get them, but I know they sure wouldn't clean them..

 

In 2000 I bought a $1,000. face value silver for 5,000.(Several family members went in on it)....I had about $50 in 1964 silver. I was able to search the coins with some very good finds 21-D merc,Au50 walker,roll of UNC 1963 Franklins, several other nice mercs and franklins and replaced them with my 1964 silver ..waited a few years then sold the lot for $8,500. It was fun and I had a nice little profit. Paid of the family 'investors' and had some great upgrades and trading material

 

Well, I can't speak for others, but I can give you an example in my case.

I went to a coin show recently and had 70 random ASE in various conditions (no real bad ones... some in air-tites, some flips, some mint boxes).

I wanted $18.50 each for them and offered early in the show to sell all to one person (non-dealer) for $18 each. Well, that guy bought $90 worth of wheat pennies off me (2 5 lb bags + 8.5 rolls) and was very interested in the ASEs, but moved on to peruse the rest of the show.

So, I took a look around the show and found someone (dealer) who was advertising "Buying Silver Dollars", so I chatted him up a little bit about what I had and told him I would check back with him later... still hoping to get a better price from the first guy.

In the meantime I sold 5 for $18 or $18.50. (unsure)

Come to the end of the show and the first guy had come back to negotiate, but he was offering less than $15 each... for that I would just hold on to them! I didn't even try to talk him up after that. (Probably should have, but I was tired and not thinking quite straight!)

Anyway, I really didn't want to take those back with me seeing as it was my goal the whole day to sell them, so I took the whole pile over to that other dealer and he looked them over. He made an offer, I made a counter offer, he made an offer, I made a counter offer... anyway, we settled on $16.50 each (spot was at about 13.15) and he bought the 65 I had left and paid cash.

It was less than I wanted and I certainly could have sold them for more on Ebay or by holding on to them, but this way was much easier, cheaper, and less time consuming. In addition, I had been holding those for awhile and it was time to move them off to someone else and put the money toward a new purchase.

Also, I will let you in on a little secret... I had bought when silver was around $10 to $11 and I paid $14.50 each from another local dealer! So, I still made $2 each. (not counting extra expenses)

Anyway, there is some insight in to a dealer to dealer to dealer transaction.

Regards,
Michael

 

Where dealers make the most money are from estates and from people who inherited estates. I've seen people come into local dealers with freezer bags full of mixed silver coins they inherited and the dealers pay melt value. When people come into a shop with a bunch of coins they've inherited, most of them know next to nothing about what they have is really worth. Dealers around here (Dallas) will offer just over melt value for BU 1895 Morgan if they think that they could get it for that. An unknowing person would be happy to get it because they have no idea what they've got. I never try to sell anything to dealers, but I see other people bringing large collections into shops around town that will take whatever is offered.

 

Dead coin collectors.

Comment from local shop owner when I asked.

Can't take them with us.

0CD

 

Sad but true

Collections are sold daily at 20% of the value at coin shops

 

Sounds like I need to wine and dine some more of the big guys, lol. I did buy one seller a hotdog at LongBeach but the price on the coins went up after that....go figure

 

Spreading your good cheer all around

 

Uh

actually that does happen all the time and with insurance and medicaid your lucky to break even. The bulk of profits are made when the insurance company didn't keep up with the pricing decrease on generics OR if a drug is so expensive that even 1% profit is a 10 dollar sale.

If you don't believe this, look at Rite-Aid's stock...

Ruben

 

Talk about mark-up!! Those hot dogs at the Long Beach shows darn near equal the parking fee!

 

What margin do you dealers typically operate on, all things being equal, and excepting any special circumstances? Now don't all answer at once.

 

Very informative.

So who here are Vest Pocket Dealers?

pm me!

 

its all summed up in a word..............CASHFLOW

 

eddiespin;
I don't think it's a fair question to ask a dealer what his margins are. I compare that to asking a fellow worker, or he asking you, how much your paycheck is. That's personal and private information. If he offer's it fine, but to ask for it is another story.

 

Those are manipultations by employers to keep wages down. How much DO you make. Amazingly, in big time positions, all your co-workers know your pay.

Ruben

 

Much agreed and appreciate the anology

 

Nobody's mentioned the term "vest pocket coins" except you. Vest pocket dealer is a commonly used term and has been for years. As a dealer since 1964 you should know that.

On another note, someone earlier was talking about profits and how coin dealers are evil for wanting to make a profit but others retailers/resellers aren't viewed that way. Possibly because any Joe can pick up a Redbook and find out that their G'pas 1908 IHC is worth 100 bucks hey you have to pay me 100 bucks because that's what this book says why do i need to learn to grade the book says it's 100 bucks gimme 100 bucks but i paid a grand for this coin over here whattdya mean it's only worth 20 bucks i got it from this place over here or maybe that one on tv and they said it's worth 10 times what i paid you're trying to rip me off you slimy so-and-so all coin dealers are scum i'll get more going down the street you'll be sorry because "they" said it's worth a lot and this book says it's worth a lot and what does that mean "grading" this is the coin in the book see look i told you it's worth that you're gonna be sorry i'll come back and show you all the money i get for this down the street you're a liar and ripoff artist that's what you are i'll show you.

Sound familiar?

 

I have seen coin dealers at every estate auction that I have been too where there have been coins for sale. It's the same concept as where do antique dealers get their antiques for sale. Most of these auctions occur because someone passed away, the kids or other people who inherited the estate don't want to deal with having to dispose of the property, so they hire an auction company to come in and auction off everything. The auctioneer makes money by taking a percentage and/or adding a buyers premium to the sale. If the party who passed was a coin collector, often these will go on the block as the heirs are only interested in the FRNs they can get for the entire estate. Most of these are "no reserve" so you can luck out depending upon who is there to bid against you. '

Most reputable auctioneers will know the value of these things, but won't pull them from auction for better prices elsewhere because if they started to do that, it kills their business. Normally there will be a period beforehand where you can inspect the goods (coins) and ask questions.

There are huge bargains to be had at these things if you know what you are doing and have the time to go to them. Unfortunately it can be time consuming as there could be a lot of other items on the block that you may not have interest in. Make sure you know and understand the terms of the auction before registering to bid on an item. Sales tax if applicable and/or the premium can eat into the margin quickly.