An Idea I've Been Kicking Around

I'm not a dealer & don't play one on tv. I can see the advantage of not having a brick & mortar store & selling everything on the web, lot's less overhead & you could start before you retire from the military. However, I thought one of the advantages of having a store was having people come to you when they want to sell a collection, either their own or inherited. If you only have a web site where do you consistently find new stock at true dealer prices?

"If you only have a web site where do you consistently find new stock at true dealer prices?"

Most people with collections don't want to bring in a load of coins for you to look at anyway. You need to go mobile . And show up in some old beat up vehicle lol "How do you find business?" Marketing!!

USMCLion,

I'm USAF retired and working for an income, not pleasure.

I don't know where you live and what is available in your local area, but I could tell you if you pick the right location and truly love the business and those asscociated with it, a brick and mortar could be successful. I wish we had one I could regularly frequent and establish a relationship with the proprietor. There is one locally, but I can't understand how they stay in business the way customers get treated.

If you have a coin club in the area, join in and see what opportunity exists and what the competition is like.

I have been, in the past, a dealer in a collectibles store, so I guess I can give you some insight.

We (me and two other guys) sold hockey cards, back in 1991-92, whcn the market was just starting to heat up. I admit there are differences in the focus of product from a coin store, but I imagine some of what I am going to say is applicable to your situation.

1) Your overhead will be a killer -- rent, insurance, taxes, business licence, any Chamber of Commerce fees, and any clerical stuff you want (business cards, letterhead, etc.), not to mention security (burglar alarm -- your insurance company will insist on one), accountant (if you hire one), and sales tax collection. You will have to find a way to offset all these costs, and usually you're going to pass on their costs to the customer because you won't be able to afford to take the hit yourself.

2) You have to constantly monitor what your competitors (if any) are doing.

3) You're going to have to deal with the public, some of whom will be difficult and even try to cheat you, and you're going to have to keep smiling through all of it, so that you keep your reputation intact. One nasty word to a customer can kill you dead in the water, especially since anyone with access to a computer can complain about you in any forum anywhere. Word of mouth can make you, but it can also kill you.

4) If you hire staff, you're going to have to keep an eye on them too.

5) Very few businesses actually show a profit in the first three years. Of course, your expenses will offset your taxes, but the taxman will still be regarding you with suspicion, because that's their nature.

6) Too much inventory can strangle you if it's not selling, and you might suddenly find yourself having "sales" to get cash in because the rent is due, etc.

The only way I would open a storefront business is if I needed some form of tax write-off because I was making too much money someplace else.

In regard to the store we had, if I had it to do all over again, I wouldn't. I wished we had had the internet back then, because that's exactly the way I would have gone about it. No overhead except for your computer and internet costs, and that's it. Nobody breathing down our necks, no expenses due that lead to HAVING to make X amount of money this week.

We also found that we made more money before we started the store, because then we were just setting up at flea markets and farmer's markets, etc.

Now, I know that coin collecting is probably a better hobby than card collecting because overproduction in one is not the same as it is in the other. But, let's face facts -- not as many kids are getting into coin collecting all that much anymore, surely not like they once were (the same is true of stamp collecting). There are too many things to compete with these days -- Nintendo, the internet, etc. I'm not going to say the hobby is dying, but it does have a very limited appeal, and not a very wide audience. You're going to have to carve out a small niche out of an already small marketplace.

I hate to come out sounding all gloom and doom, but I'm just trying to be realistic and save you a headache down the road. It's free advice; take what you will from it. I realize you love the hobby, and that's fine, but you will find it difficult to make any real money from it.

If you have money to invest in a business, trust me, the best things to invest in are restaurants, bars, and funeral homes. People are always going to eat, drink, and die. You'll never run out of customers there!

I can easily imagine the setting, and that sounds like a very positive experience for all involved.
The reduced overhead of a small town with a large collector base nearby would be a good combination, imo. Particularly if one is a collector-friendly dealer who is helpful and educational to beginners. Judging from what I hear, a lot of collectors feel ebay is their best alternative simply because of a scarcity of good dealers in their area. That's the case for me, which is why I mostly buy at shows.

As one cautionary note, I've talked to a lot of dealers about the issue of inventory, where a few have told me privately that many shops have so much money parked in coins that returns little income. This may be why many dealers around here have become essentially metals brokers to make money. I guess I've wondered if there might be any alternatives to a shop that has such a large "footprint" of inventory? Someday I'd personally like to see dealers who specialize in just one area, where they pool their inventory with others as an exchange to better cover collector interests. Under such a scenario, a collector might provide a list of coins they want, and dealers could find the coin on their network and earn some margin for helping along the transaction? Perhaps this is done already in some circles, and it strikes me as a positive alternative to the anything goes, jungle atmosphere of ebay.

Again, thanks everyone some great idea's and great advice. Like I said its something I've been kicking around in my head.

I can rent the space for a month, which has a security system already for the price of renting a couple tables at a coin show. So the overhead will be pretty small. I will be my sole employee, if I have something to do/vacation etc the shop will close. I'm not trying to make millions of dollars from selling coins. I want to do domething I love and make some money and stay busy and out of my wifes hair. Having a retirement check coming every month is what really makes me think I can do this. I have quite a while to get ready. Once the wife and I make our final decision I'm going to start to aquire my inventory. I have some pretty good methods that I've been using for years as I travel around the world, I'm just going to do it on a larger scale.

The classic "shopkeeper persona" is true for the UK and everywhere. I wasn't going to be quite so direct, but yes--that rings true to me, which is why I only frequent a couple dealer's shops. Conversely, a dealer who is collector-focused and helpful won't be lost on those who visit.