Problem At The Coin Shop

I own and manage an antique mall and coins represent one of my areas of expertise. To begin with my overhead is between $180.00 to $200.00 PER DAY. That is what it costs me JUST TO OPEN THE DOORS whether I sell anything or not. I do not begin to make money until I have sold at least twice that and of late that has become much harder to do.

Someone walking in off the street has a product to sell me (remember they came to me, not the other way around). They have no overhead other than the cost of some gas and their time plus the cost of their coins. I may or may not have any interest in the items being offered. For the sake of argument let us say someone brought me some coins and I am willing to buy them. Here is the basics a person needs to know to sell to me.

1. If it is common stuff don't think for a minute I don't have a ton of it already. Therefore I probably don't need more. You bring me common date wheat pennies I pay 2 cents each. Modern mint and proof sets or common 90% silver I promise you my interest level will be pretty low therefore my cash offer to you will reflect that. Currently I am paying 8 times face for 90% silver unless it is common date Morgan silver dollars which I will pay between $12.50-15.00 depending on date/condition. I will sell the 90% for 12.5 to 15 times face and the morgans for between $16.00 and $22.00. Please note I am paying a LOT more than the pawn shops or these fly by night "I am renting a motel room for the day" people who steal from ignorant people. Also this DOES NOT reflect choice coins or key dates.

2. Now let us say you bring me grandpa's beautiful collection of antique coins (1850-1920) to include key dates that he cherry picked back in the 1930's and 40's. Now you have got my attention and I will be much more interested in what you have to offer. Depending on what it is I will pay between 50% and 65% of what I think I will be able to sell them for. This may or may not be a bit lower or higher than grey sheet. Again it is dependent upon what it is, condition and how badly I need it for inventory.

I will quote you a price and then INSIST you go to visit my two friends who own the 2 other coin shops down the street to have them give you a quote as well. I will inform you that if you get a better offer from them please take it. Otherwise come back to me. Why do I do this? Because I am not afraid of them bidding higher than me (and sometimes they do). When I make an offer I feel I am being fair to both the seller AND to myself. Sometimes my customer will just sell to me regardless of this and other times they will go to the other 2 coin shops and this means sometimes they come back to me and other times they do not. Either way they (the seller) will have gotten the best price for their coins and I sleep very well at night.

Keep other things in mind. People usually ask for discounts when it comes to coins and so I have to give away part of my profit margin there. Additionally there is the concept of the time value of money. If I don't buy your stuff I can buy something else which may or may not give me a higher profit margin.

Next I use something called the "acid" test. This is the question "If I had to sell this tommorow at auction could I get my money back?" Guess what, your coins will bring 50-65% at auction if I am lucky and other times they could bring MUCH less. I have always lost money taking my coins to auction after paying commissions etc.


So when it comes to buying coins as investments for a rainy day please keep this next sentence in mind. Common coins WILL ALWAYS be common. If you want top dollar don't collect "common" stuff. Stick with antique and rare high end condition coins. Anything else is just more "junk" for our 50 cent and dollar bin. And yes if you want to trade me your coins for some I have I will treat you MUCH better than a cash purchase. You will get the benefit of my previous buying opportunities. Hope this helps you understand the other side of the business. Sincerely, John Leckrone

Some are good, some not so good. Kind of like car salesmen.

I see 925 dealer's point, but that's probably why I wouldn't ever be interested in a brick and mortar establishment. It's those fixed costs that just kill margins. Then again, if you only do shows and business over the internet etc., what are your advertising expenses if you want to build repeat customers besides randoms at shows?

LOL so true I hang out in my local shop on Saturday afternoons and the majority of walk-ins are clueless as to what they actually have. You see so many people bringing in raggy $1 silver certs, $2 notes, dateless Buffaloes, JFK halves and Ike dollars- most think they have a fortune and get mad when they are told that the shop has a few hundred silver certs already so they are not buying them now, dateless Buffs are 10 cents each, and you can spend the deuces, JFKs, and Ikes. And then the precious metals customers come in with Aunt Agnes's gold filled jewelry and silver plated tea set, both of which should have been relegated to Goodwill or a yardsale. Customers like that waste the time and money of everyone involved whether they realize it or not. A B&M dealer has to deal with the walk-ins but it usually comes at the expense of profits that can be made on other customers with better stuff, time is money.

Actually the numbers are 35% to 50% (if I am paying 65% then that leaves 35%). And keep in mind my margin shrinks everytime someone asks for a discount. Additionally I can buy all this stuff online for the same price and sometimes a lot less so keep that in mind as well.

Now to answer your question. Not everyone is willing to sell online on ebay (can you say high ebay fees?). Craigslist is fine but again would you want someone coming by your house to see your coin collection? Want to meet in a parking lot and risk a mugging?

With regards to dying a slow death there is a simple solution for those of us dealers smart enough to do it. We simply lower our prices. Here is the kicker though. My low selling prices also reflect my offer price when buying. You can see this same trend on ebay so it is not just a brick and mortar thing. Seeing a pattern here? Sincerely, John Leckrone

"So Figman> You'd pay 6 to 8 times face for say 64 Kennedys when they're worth 13x? Where do you go to get the 13x face? (per (124) This link is not allowed by the Staff )"

I don't buy coins for silver value!

Just a thought after reading this topic, If a Collector/Dealer passes away, where would those of you who are dealers expect the people left the collections you left them, go?This is if the people who now have the collection, want to sell it.With out turning in your graves!!

This I ask of course for the best value for the collection, all b/s aside?

with wornslick. He said it all. Right back to the issue of common will always be common. His comment about paying for good advice is also key! People have stock advisors and financial advisors. We coin dealers are numismatic advisors a lot of the time. We have our opinions and are happy to share them when asked.

Now to answer your question. My wife would contact my two friends who are in the business and let them place a bid. High bid wins. This is assuming none of my children wish to learn the coin business and wife wants the money. Hmmmmm women wanting money. My wife would NEVER want money..... Sincerely, John Leckrone