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 Replies: 20 / Views: 3,097 |
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Moderator
 United States
23522 Posts |
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Pillar of the Community
Australia
4411 Posts |
It especially occurs when say two dealers have established themselves in the market differently. They buy/sell or trade with each other when they have stock they may have trouble selling. Example: one dealer is well known for selling foreign coins, the other specialises in US. They each have stock the other would usually sell easily so they sell/buy/trade. Of course it relies on respect between the dealers and id assume that takes quite a while to build and but a second or two to destroy.
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Moderator
Australia
16842 Posts |
Yep. The "horse-trading" usually happens at coin shows in the hour or two before the doors open to the public. From what I've heard people say about the larger US coin shows, there are some dealers that just go there for the horse-trading, and couldn't give a fig about selling to the general public.
There's another reason why they do it, that hasn't been mentioned yet: wantlist-filling. Many dealers have "special customers" wanting difficult-to-find items, which the dealers actively seek out coins for, knowing they can make a quick flip to their special customer.
Dealers can afford to give their fellow dealers a discount on the occasional coin because individual coin sales aren't where the dealer makes their real money - it's knowledge that is their most valuable commodity. For some, it's specialist knowledge about certain coin series that other dealers are not experts in. For others, it's knowledge of good people and places to go to "buy low" and "sell high". It's that kind of knowledge which the dealers will guard jealously, not wanting to lose their edge.
Don't say "infinitely" when you mean "very"; otherwise, you'll have no word left when you want to talk about something really infinite. - C. S. Lewis
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Pillar of the Community
United States
2049 Posts |
YEs they do all the time. As people mentioned, you will see alot of this at coin shows. I often see tables unattended as the dealer is off doing business with another dealer. In business it's all about turning over inventory versus keeping your cash tied up. So if dealer A can sell some coins, even at a 3-5% markup to dealer B, they might do that versus taking the chance that the coin will sit in their display case for weeks, months, or even years. And as Sap said, they do buy coins from other dealers knowing they have a buyer lined up, so it's a win-win-win (win for the selling dealer, win for the buying dealer who then becomes a seller, and win for the customer who gets that hard to find coin).
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Valued Member
United States
242 Posts |
This may sound like a funny analogy but its the same concept.
When I was a heavy 'for profit' gamer years ago we specialized in specific products and had other products we outsourced, other 'companies' did the same thing and when we found a particular company that fit our needs at a major level we always went to them first and bought/sold/traded at discount.
Its all about supply and demand but quality of the relationship is also important because you know they will 'come through' and 'treat you with respect' vsus just being a joe shlub that might try and rip you off and disappear into the wood work.
I would imagine thats the same for any business where very few people handle everything in the entire business. Especially collections where you cant be a high end collector for every coin ever minted or you would pretty much be a museum! lol!
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Bedrock of the Community
United States
20753 Posts |
As already stated, it happens all the time. Really noticable at coin shows but even coin stores work with pawn shops and other independant dealers. At smaller local coin shows, many dealers know each other and trading goes on all the time.
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Bedrock of the Community
United States
17884 Posts |
Quote:
As a retail salesmen I personally wouldn't sell my product at a discount for another store to sell and potentially take a customer away from me. So I take it you buy your products at retail and then sell them at retail and don't make any money on them because you just like selling? Every coin dealer is both a wholesale and a retail salesman. Coins are purchased from the public and collectors below wholesale and are sold between dealers at wholesale and to the collectors at retail. And the secret to success as a dealer is to keep your capital working. Money tied up in a coin is not working. The dealer has to keep the money turning buying coins, selling them for a profit, and the using that money to buy more coins. If you have coins that are not selling to the collectors in your area that money is not working and it is slowing down your whole business. Better to move them out to another dealer at wholesale and keep the money turning rather than to just keep it tied up hoping to be able to move it to a collector some day, even if you have to take a loss on it. I have seen many a small dealer destroy his business by refusing to take a short term loss and rebuild |
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Pillar of the Community
United States
1374 Posts |
I've seen some dealers at shows who hardly even sit at their table. They are constantly running around the floor to several dealers, trading very actively and familiarizing themselves with the inventory of others. In my experience, this can be helpful to the collector. For example, I was looking for a nice AU Trade dollar with a chop or two only in the field. I searched the entire floor, and couldn't find one. I mentioned this to a dealer friend of mine off the cuff, and within 3 minutes I found myself shelling out $175 for a very nice example he snagged from another dealer. I didn't pay the price marked, and both dealers turned a quick profit. |
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New Member
 United States
17 Posts |
Thanks for the insight everyone. Now I understand how that dealer system works. It makes more cents. Ah, see what I did there!  |
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Bedrock of the Community
United States
11951 Posts |
Yes they do .... I see it all the time.
Also that is what greysheet "Coin dealers newsletter" (CDN)
is all about, dealer to dealer price.
Not just at coin shows. Good dealers will have a network of dealers that they will trade often with.
In my experience small and medium dealers (coin shops) have a limited operating capital. I have seen collection come into coin shops with values of 10K to 350K, when that happens dealers need to be able to sell off a large amount of that collection to keep their operating capital liquid. Depending on what is in the collection, they will call a network of other dealers or special customers to sell off the bulk of what they don't need.
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Valued Member
United States
198 Posts |
Dealers will buy and sell to dealers for many reasons... I bought a beautiful banknote from one dealer at a discount, repriced it to what it should be selling for, placed it in my display case and sold it in all of about 30 minutes. The other dealer got what he wanted for it and so did I.  I will also discount to other dealers, but not by much as I price my coins fairly low anyway... BUT sometime you still have to pay the table fee and buy gas to get back home. |
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Bedrock of the Community
United States
20753 Posts |
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I've seen some dealers at shows who hardly even sit at their table. They are constantly running around the floor to several dealers, trading very actively and familiarizing themselves with the inventory of others. In my experience, this can be helpful to the collector. I too see things like that all the time. And I really don't see how that helps collectors. In my area there are 4 coin shows, minimum, per Month. One dealer I've seen at all of them. He also has his own web site and a store. He opens up his table, asks whoever is next to him if they could watch his stuff and then walks around as if a customer for hours. He does trade, buy and sell with other dealers but just don't see how that helps me. |
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Pillar of the Community
United States
1151 Posts |
Quote:
I've seen some dealers at shows who hardly even sit at their table. They are constantly running around the floor to several dealers, trading very actively and familiarizing themselves with the inventory of others. In my experience, this can be helpful to the collector That's why some dealers have runners, I sometimes do it. They send them to buy or sell a coin, and they usually either get paid a commission or a flat rate. Not many dealers want to do that though, you have to build trust up first, I suppose. |
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Bedrock of the Community
United States
36800 Posts |
In many cases, dealers do more business between themselves than selling coins across the counter, especially at Coin Shows. In the 1970's and 80's there was a national Teletype trading network for dealers and the weekly price reporting of dealer Bid/Ask prices via the Coin Dealer Newsletter (Grey Sheet).
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Valued Member
United States
198 Posts |
At our coin shows we too have the dealer who can't seem to stay at their own table, always out trying to sniff out a good deal. We let them wonder and if they miss out on a sale, that's their business.... if something comes up missing, they get very upset that someone stoled a coin or two. I give all the dealers who attend our show a letter stating that the organization is not responsible for lost or stolen items and that they need to watch or have a partner to watch their goods. It never fails though that someone will come up to me and tell me that they are missing something and want me to find the person or the item.... I ask them if they want the cops called. Coin Show Rule#4: You are responsible for your merchandise at your table. If you ask a neighbor table to watch your stuff and they get busy selling their own stuff.... who is responsible for your table?  |
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Replies: 20 / Views: 3,097 |
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Posted 09/05/2012 03:16 am
