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The Future Of Local Coin Shops

 
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Pillar of the Community
United States
617 Posts
 Posted 01/28/2020  10:08 pm Show Profile   Bookmark this topic Add Ballyhoo to your friends list Get a Link to this Message
As an older dog I remember well the several coin shops in my area. Back then this was the primary source for many of us collectors, aside from a coin show on occasion. Alas, over the years as collecting declined a bit while at the same time technology rose, half of those shops are but a distant memory.

A realization occurred to me. While I have nothing against technology or the internet, where coins can be bought twenty-four seven, I wouldn't say that this is the biggest reason why they closed. Most, like those near me, have embraced it and actually do better than simply relying on a brick and mortar business. I recently lost the last standing local shop, the nearest now some thirty miles away. My take away to this was the average age of a local coin shop owner which is in the neighborhood of 52. Knowing this, and looking around various other places, one has to wonder who will carry the torch, so to speak, when the remaining dealers retire or the inevitable shall happen.

While guilty of buying far more online than from a local shop, I still think I give them enough walk in business throughout any given year. So I'm left wondering, is this a trend beyond my area?

Thoughts, comments?
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United States
1162 Posts
 Posted 01/28/2020  11:24 pm  Show Profile   Bookmark this reply Add fortcollins to your friends list Get a Link to this Reply
It's a much larger trend. There are a lot of reasons for the decline. Here are a few observations.
There has been a sharp decline in the number of collectors, forcing dealers to serve much larger areas to reach the same size customer base. The internet provides that opportunity.
The rise of slabbed coins has made sight-unseen investing more common.
Investing and speculating have replaced date-and-mint collecting for many people.
Circulating coinage is boring, and doesn't spur new collector interest. The days of filling a coin board from pocket change are largely over.
Crime rates have made brick-and-mortar stores too dangerous to operate, even in relatively safe communities.
Overhead costs are too high to compete with internet sellers, national coin superstores, and large shows.
Mint market saturation with never-ending NCLT offerings has drained the supply of funds for classical coin series.
The flood of Chinese counterfeits has undermined confidence in raw coins.
Sharp declines in coin prices in the 1980s and early 2000s soured a lot of people on collecting and put quite a few dealers out of business.
Margins are too small to sustain career coin dealers. Many dealers have retired from careers and are the business equivalent of hobby farmers.
Pre-Wayfair taxes generally affected brick-and-mortar stores, while giving a free pass to internet sales. This hastened the demise of local shops in states that tax coin sales.

Just a few thoughts. I'm sure others will add many more ideas.

All of that said, I've been a vest pocket dealer for decades, and never have owned a brick-and-mortar store, for many of the reasons I just listed.

JMHO.
Pillar of the Community
United States
1234 Posts
 Posted 01/28/2020  11:36 pm  Show Profile   Bookmark this reply Add hfjacinto to your friends list Get a Link to this Reply
I have 4 LCS witting 30 minutes I spend the vast majority of my hobby budget at 2 of the 4. There are always people there, vast majority are into bullion though.
Pillar of the Community
United States
858 Posts
 Posted 01/29/2020  04:20 am  Show Profile   Bookmark this reply Add Daves Errors to your friends list Get a Link to this Reply
1) The internet has put a lot of shops out of business Due to people being lazy and it's cheaper. Shops are selling to high to try to keep with the internet. If they sell low to keep up they cant pay rent.

2) Coin shops only have a small variety to pick from. The internet you can buy from all over the world. If you can't find it at a shop >>> THE INTERNET WILL find it for you.

3) Rent for the shop. No sales no shop.

4) Location. If ya open up a shop in a town and there are not a lot of collectors ya make no money.

5) Lack of interest from the new kids on the block. They would rather text all day and play video games.
Edited by Daves Errors
01/29/2020 04:44 am
Bedrock of the Community
13014 Posts
 Posted 01/29/2020  04:24 am  Show Profile   Bookmark this reply Add basebal21 to your friends list Get a Link to this Reply
This isn't a coin shop issue, this is happening in all areas. Why would someone open a shop they have to pay rent to etc when they can run the same thing online without the overhead?


Quote:
There has been a sharp decline in the number of collectors


No there hasn't. If anything there's probably actually more now with the internet, but how and where people collect has changed.


Quote:
The rise of slabbed coins has made sight-unseen investing more common.


Sight unseen is about the same as always, they've really just allowed internet sales to flourish.

For the record sight unseen literally means you've never seen it and just bought it from a line of text or stock photo.


Quote:
Investing and speculating have replaced date-and-mint collecting for many people.


Not really. The TPGs have allowed collectors to branch out in areas that they may never have before. Type set collecting, world coins, box of 20, buying whatever you like etc are all much more popular today than building complete sets.


Quote:
Crime rates have made brick-and-mortar stores too dangerous to operate, even in relatively safe communities.


Not true at all. Would I run a shop in inner city Baltimore of course not, but crime rates are no where near the levels this point suggests.


Quote:
The flood of Chinese counterfeits has undermined confidence in raw coins.


This has been going on for decades.
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14293 Posts
 Posted 01/29/2020  04:41 am  Show Profile   Check Fuzzy317's eBay Listings Bookmark this reply Add Fuzzy317 to your friends list Get a Link to this Reply
I just found out one of my local coin shops closed down several months ago. Not due to health or inventory or online competition, but because of the local government.

The government had changed some policies and were starting to treat this coin shop like a pawn shop. The biggest change was if he bought coins from a customer, he had to hold onto them for several months, report the purchase to the local police, and get detailed personal information from the seller (address, phone#, and SSN#).

I think the gentleman had retired from another industry and was only using it to add to his retirement income. The rules and government involvement got large enough for him to just call it quits.
<---- expert of nothing, student of everything. My Coin Galleries
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12721 Posts
 Posted 01/29/2020  08:21 am  Show Profile   Bookmark this reply Add T-BOP to your friends list Get a Link to this Reply
I think you guys left out a very important reason for the dismiss of LCS's . In my area most of them have changed their way of operating from collector coins and currency ( for the general coin collecting hobby ) to a Bullion gold & Silver Business . Virtually pushing away the Newbie coin collector and also many seasoned coin addicts . Thus reducing their clientele .
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82702 Posts
 Posted 01/29/2020  09:26 am  Show Profile   Bookmark this reply Add jbuck to your friends list Get a Link to this Reply
basebal21 hit most of the points I wanted to make.

I feel like the hobby is evolving, not dying.

Two of the three LCSs I use to frequent 20+ years ago closed when the owners passed and the heirs liquidated.

The remaining LCS is still open, but I seldom go there as I prefer the selection variety of the coin shows and online venues.

There are a few other LCSs around, but they are more the "we buy your gold" type places.
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United States
19082 Posts
 Posted 01/29/2020  10:09 am  Show Profile   Bookmark this reply Add just carl to your friends list Get a Link to this Reply
So much depends on the area you live. For me coin shops are all over the area. Not much chance they are going to close. One reason is numerous coin shows in the area. Coin shop owners go to them, make friends that also go to their shops. In addition to that, most coin shops around me are not just coin shops. They are also Hobby Shops. This means they also carry numerous other types of hobby items in sporting events of all types. They also carry numerous coin collecting items such as Albums, Folders, Flips, etc. One I know of also carries large amounts of Ancient Artifacts such as old statues, clothing, etc. This one is right in the middle of a large city so massive amounts of people pass by all the time.
One shop I have frequented have several people that sell at coin shows and when you go to their store they greet you like an old relative.
Like I said the amount of coin shops vanishing is mostly due to owners not being versatile enough. And too, I do think local laws too have been a problem.
just carl
Pillar of the Community
United States
1621 Posts
 Posted 01/29/2020  11:13 am  Show Profile   Bookmark this reply Add Alpha2814 to your friends list Get a Link to this Reply
The one local shop I had been to a few times just relocated, from a tiny space on the 14th floor of an old building downtown in the Financial District, to what used to be an IHOP with a big open lot in the touristy part of town. I can't tell if that's a step up or a step down -- it's clearly a change in some direction, probably just following their clientele. Used to be that people who worked in the Financial District were older and had money, now they're younger and getting by, and most have never even seen a Kennedy half dollar.

I stopped going to this particular shop because their inventory kept getting pricier, dealing in higher and higher value coins (maybe to keep up with their rent in the old space) while I was still ramping up my own collection. Last time I was in, they blew me off for wanting something slabbed and questions about reholdering. If I had first asked about early copper (i.e. actually spending real money, the other reason I went in), I might have gotten better attention. They're still mostly out of my price range so I'm just not looking there anymore.
Working on: Indian quarter eagles, Chinese pandas, and San Francisco tokens; upgrading my Peace dollar and US Type sets

"Fear is the enemy of will. Will is what makes you take action; fear is what stops you, and makes you weak."
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16257 Posts
 Posted 01/29/2020  1:10 pm  Show Profile   Bookmark this reply Add Conder101 to your friends list Get a Link to this Reply

Quote:
For the record sight unseen literally means you've never seen it and just bought it from a line of text or stock photo.

And for slabbed coins true sight unseen means that as long as the label on the slab matches what you ordered, it is YOURS no return privilege.
Gary Schmidt
Pillar of the Community
United States
3736 Posts
 Posted 01/29/2020  8:15 pm  Show Profile   Bookmark this reply Add Joe2007 to your friends list Get a Link to this Reply
There are still about a half dozen coin shops in my city of about 2.5 million in the metro area. These shops are largely focused on buying collections/bullion rather than selling coins to collectors. The lack of large inventories, quality, and higher than average pricing are what is driving me away from my local coin shops and to shows. Many of these shops will be sold or go under when the owner reaches retirement age or passes on. My favorite local dealer sold his brick and mortar shop but still organizes several shows and sets up as a dealer with several well stocked tables. He says he enjoys this much more in his retirement and says that cutting the overhead was key and he still has sources for quality collections to sell at shows.
Pillar of the Community
United States
617 Posts
 Posted 01/29/2020  8:30 pm  Show Profile   Bookmark this reply Add Ballyhoo to your friends list Get a Link to this Reply
Thanks all for bringing some clarity to my concern. I see that a few discussed the ability to buy sight unseen. While true, a draw back for me personally is that ability to see what I'm looking to buy in hand. As an example, I've started the Walking Liberty series this year. So far I have the 1941, 1941d and the 1945 in PCGS MS64. My goal is to have the short series in 64 and the much tougher early in AU58 to MS64 all as equal in eye appeal as possible. This can get quite difficult relying on photographs. Not impossible, but if it's not up to my standards than I'm left to sell it for an upgrade. Which only adds time and money. There's always coin shows.
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