I love food but I don't want to own a grocery store. I love darts and old cars but I don't want to own a dart store or a used car dealership. I love beer but I have never wanted to own a liquor store. I love fishing but have never dreamed of owning a bair shop. Similarly, I love coins but I have no desire to be a professional dealer. I think, for the most part, collecting and dealing would be pretty mutually exclusive. At the end of the day, it has to all be inventory to a dealer and that is a different mindset than many collectors have. It would take a lot of the fun out of it for me because I think it would require a much more dispassionate approach to coins than I currently possess. Not knocking dealers at all but I just think it is odd that so many collectors want to know how to become a dealer in this hobby. So what is the appeal for you collectors that desire to be professional dealers?
I think collecting coins gives people a taste of what it's like to be a coin dealer. Eating is nothing like owning a grocery store...nor is drinking beer and owning a liquor store. But if anyone has bought a coin and later sold it and realized that once you buy it...it doesn't immediately go down in price...then it kind of makes you wonder... Not to mention it's fun! Not everyone that wants to be one becomes one. Reality hits somewhere along the line with massive research and patience. Also...why not do something you're already doing for fun and make money at it?
I guess maybe I have never had fun selling coins. Buying...yes. Selling...no. Maybe it is just me and the fact that I am not a retail sales type person. I worked those kind of jobs as a younger person and never enjoyed it. Even when I was working in a hardware store (and I love just about everything that is found in a hardware store) I didn't like selling. Maybe the liquor store wasn't a good analogy...a bar would be better. I have know a few bar owners who seemed to like their product a lot.
In my opinion far too many collectors - especially those relatively new to the hobby - suffer from a mistaken perception. That being that it is easy to make money from buying and selling coins. Well let me tell ya folks - it is not. It is likely the farhtest thing from easy there is. Take a look at any coin dealer you can find. Do they drive big fancy cars or live in mansions ? No - they drive cars and live in homes just like the rest of us. They work very hard trying to squeeze a profit out of their business and it's much tougher to do that than with many other businesses. Another reason many collectors think it is easy to make a profit selling coins is because of the price guides. They buy a coin for a given price - but then they look up the value in the price guides and say - WOW I got a deal !! Well you likely didn't get a deal. If you were able to purchase a coin for $XX then that's likely all it is worth. Which means that is all anybody else would pay for it as well. In fact you probably could have bought the very same coin in as good or better condition for even less if you had shopped around enough. Any collector that wants to know the reality of the coin business can find out what it is truly like. Just try selling a few of your coins. I would venture that unless you have owned these coins for many years that you will receive substantially less than you paid for them. If you are lucky - you will break even. You do not show a profit in a business by breaking even.
I figured coin dealers were rich. The 3 I go to locally are filthy rich. Several ferraris and huge houses...and 1 guy is in several books. I knew it was a lot of work...but I figured the payoff would be worth it.
The local guys I see here don't seem to be rolling in it. Are Pinnacle, Legend and David Hall all local to you? I know the high end firms probably do pretty well but they are probably the exception. I have always thought coin dealer margins are rather small for the most part.
If you have been collecting for 20 years, and all of a sudden your company decides to send your job to Mexico or China (thank you Washington DC), or bring someone in from India (thank you President Bush) to do your job, a coin dealership just may be a very viable option. It may be that not every collector wants to be a dealer, but frequently entertain the idea as an interesting endeavor.
On any given weekend here, there are usually 3-5 small time coin "dealers" selling coins at the large local flea market where the overhead is low and the traffic is high. I'm sure there are some good ones out there but I haven't had much luck finding good coins and service from any of these characters.
We have a large monthly flea market and a few dealers set up. Two are pretty good and I have bought from them on occasion. One owns a shop near me and the other I am not sure where he is from. Another sells just modern proof sets/SAE's/State Quarter stuff and a couple sell some cleaned junk.
Large houses and flashy cars? WOW, sounds like I am in the wrong business. OOPS, I am in this business. Did I forget to get in the line for big houses and flashy cars? There are some very good thoughts in this thread. Most of us dealers make a living at dealing coins, but that is about it. Not too many have riches beyond belief, and the few that I have met that do, got their money in other avenues such as the stock market or other businesses. Now you can comfortably live as a coin dealer if you know your coins and know your business. It is very easy to go under fast. Many people start businesses and fail each year.
Well, I for one can say with strict confidence that I will NEVER become a dealer of coins. First off, I have the passion of collecting coins. Most if not all are considered to be the few things I would grab if the house was on fire. But business is a funny thing, and market demands, clientele and competition are just a few things that hinder one in getting started in any business. Not to mention this - A minimum of $50-100K would be required to get a small business dealing coins off the ground. I go to a great dealer that has been in business for a few years. They started with their life savings + $40K from the bank. They now have $350K in inventory, with a moderate sales pace. I think it would be fair to say that any coin dealer would have to take every dime of profit made for the first couple of years and invest in inventory to grow and be successful. People don't go to coin dealers primarily because they are nice; they go for selection and to find things that aren't easy to come by. Me - I am considering opening a cigar store, though. Same deal, years of struggle to eek out a profit only to reinvest for inventory and advertising. My $0.02, Cris
Question for dealers: Once you became a dealer, did you quit collecting coins? There must be so many interesting coins that pass through your hands. I've always thought it must be hard to sell them instead of adding them to your own collection.
Well you almost have to. It is difficult to sell coins if you want to keep them. We photograph all of the coins now, so that we may keep a record of what we have owned. Since most of our inventory consists of registry set coins, these are quite tough to keep. The price we pay makes us sell them quickly. I do keep a state quarter map on the wall of my office. The sad part is, the map is only filled through half of 2002. I own the first two cent coin given to me, but that is it. My collection is whatever we have in stock.
I have found that I have had to let some of my prized GEMs go..... And I miss some of them..... But there are a few very special coins that I will never give up...... Some of the coins in my Registry sets now have new home and are being enjoyed by many.... I saw myself as a temporary steward of my coins, and the time comes to pass them along for somebody elses enjoyment.... Boy I miss my 53s PCGS MS65FBL Frankie......
I'll also add, its a wonderful feeling when you place a knockout GEM in a collectors hands whom truely enjoys and appreciates the coin.... I enjoy the feedback I get after placing some stunning DCAM Frankies into collectors hands...
I thought i was going to make money selling Buff nickels when I bought a roll of them. NOT! I give most of them away to kids and some to new forum folks who PM me and ask to buy one, i give them there first. BTW, i'm out right now.
Like any business catagory, there are hugely succesful people, middle of the pack people and failures. Q. David Bowers comes to mind as one of the more succesful ones. I find it intersesting that your avatar is a Colonial coin, but you deal mostly in modern registry sets. Registry sets remind me of the oft sited example of tulip bulb mania. This is not meant to be critical. I have collected screwier things myself.
