First Experience With Coin Shops

trdhrdr007,

Yes, that's a very slim margin. I wonder if I'll have a job next year there. That's profit margin, above the line, EBITDA, whatever one would like to call it. All costs except interest, depreciation and taxes. It's mostly a wholesale provider of telco data.

And you are absolutely correct. Retail B&M is another animal. Sadly, many coin shops seem to overlook that providing a pleasant atmosphere and superior service might, just might, be the path to greater success and profits. To those that do, I hope they last forever.

I understand the coin shop ethics all to well. I went into a coin shop with my 1809 half (listed in other forums, raw graded at AU53) He offered me $175 for the coin and told me it was worth $225. He then proclaimed to say he will buy everything for 90% of what he will sell it. I kept going back to the point he just offered me 70% for the 1809, and he simple would change the subject. He also only offered me bullion prices for my Seated dimes. He was fair on bullion prices though. his buy/sell prices on morgans was only about $3 difference but as for coins with real collectable value he was way off

Yep, fastest way I know to get banned from a table or shop. If you follow the seller out to a public parking lot and make an offer out there, or if the dealer turns to you and asks if you want them, that's a different story.

007 is right on target. Typical giftware and other retail stores work on keystone. This means they buy at $5 and sell at $10. They order what they want, when they want it, and sometimes don't have to pay for months.

Compare this to a coin dealer. The collector doesn't tell the dealer to pick what he needs from his personal collection at 50% off retail, he takes the dealer stuff he no longer wants, then expects the dealer to pay him more than the price one dealer is offering to pay other dealers for items that he needs because he already has a buyer.

When you're talking dealer to dealer, they usually don't buy at 50% of greysheet when you're dealing with quality graded coins. I've sold to a dealer online who sold to smaller dealers; I know how this works to some extent. I got good money for my stuff compared to what I paid for it. He sold a coin he bought from me for $1100 to another dealer for $1200 or $1250, who probably sold it for $1350 or something. At the shop near here however, the owner is quite conservative and its a different story. I keep having to remind him that the TPG's and market are much more liberal than his strict grades during our bargaining, even if hes 'right' lol...I guess it depends on their mindset.

If you're talking about sub-par raw coins with minor problems, sure maybe they would buy at 50%. I think part of it is that they're worried that in this economy, they're going to have to mark down heavily to get rid of the stuff in a time frame. Some of them are too stuck in the old school way. Part of it is that they are just tough negotiators, and they know they can convince a lot of collectors and financially desperate people into parting with their stuff cheap. Its important to try not to seem like you need the money, as it might make them bargain harder since they think (often correctly) that you will give in more easily. In my case, I wasn't going to let anything go for his prices unless I wanted to let it go for that price. Personally, I try to buy really cheap, but I don't like to rip people off or talk people down excessively like many dealers do. I try to be fair to people I sell to, even if I can be persuasive sometimes = ) And yes, I'm an aspiring coin dealer. I often go on ebay and hunt for lots ending at bad times and perhaps the odd estate, lol. I'm guessing many of the older dealers don't really know how to do ebay like that and their fear of not being able to sell the coin + the tough negotiating kicks in hard.

I just think that many dealers, especially older ones, think they have to be ruthless negotiators and get the absolute best outcome possible to make decent money. I disagree, but it takes different approaches to still make good money and I can kind of see why they do it. Being a younger guy, its certainly from a different world. I would personally never try to get someone to sell me their stuff at 50% of greysheet.

Another thing is everyone is trying to buy gold and silver. Mack sure your local shop has been there for awhile.

Silver dinner sets has been really coming in.

I don't see what all the fuss is over. We have forums, ebay, conventions and shows that bring knowledgeable actors together. At these venues informed buyers and sellers meet and a "market" price is established. At a shop it's a whole other game. I experienced the same thing in sports cards. Moral of the story is to avoid stores for sale unless you're desperate, of course with a handful of exceptions for stores that are highly active in real "market" type venues. But even these stores will likely offer less than what you could get with an outright sale to a final customer. Bottom line is they have to shell out their cash to buy inventory that their clientele may not be interested in. We can't fault them for not wanting to pay top dollar. Unfortunately this may result in unknowledgeable sellers getting ripped off, but that's the price you pay for not being educated. Fortunately in this hobby if you don't like dealing with someone, you can just stop dealing with them.