Finding And Dealing With Dealers

Building a relationship with your dealer is a lot like building your collection. Do your homework. Take into consideration the type of collection that you are building. Often dealers will specialize in certain areas of the coin market. Most dealers are willing to help you in your quest. Make them your inside connection. Use them not only for building your collection, but also for building your numismatic knowledge. They are a valuable source of information. They can assist you in authentication, certification, and the buying and selling of your collection. Most offer some form of a wantlist program. This is a valuable tool that is too frequently overlooked by most collectors. Often dealers will set aside coins for customers that they know. This will allow you access to coins that the average customer will never know about. Most will also offer better buy/sell prices to a known customer. Look at their return policies, shipping and handling, and guarantees. This should be an important factor in choosing your dealer. It is also an area that is often overlooked. An educated customer is the best customer. Once you have developed your relationship, share this information with others in the hobby. Especially the new collector. Too many new collectors are lost due to lack of information. Don't assume that because we live in the information era, that everyone knows where to look.

Education and knowledge are best when shared.

Collector's often ask how dealers decide on prices to buy and sell. Here is a little insight into the process.

A customer enters the dealers store, (storefront, show, online), the dealer will pull out his most current copy of the Coin Dealer Newsletter, commonly referred to as the Greysheet. He will look at the bid/ask price of the coin(s). Now depending on his need (inventory-ability to sell) of the coin a price will be quoted.

As an example if a dealer is offered a strict MS-63 1922 Peace dollar the bid is currently $21.00 / ask $23.00 Now most dealers have plenty of this issue in stock, so the offer will probably be $17 or $18 with a resale offer of $25.00

Now if the same customer offered a strict MS-63 1921 Peace dollar (key in the series) the current bid is $267.00 / ask $295.00 An offer of $275 to $285 will be made. A resale price of $320.00

It is always easier for a dealer to sell a key date. Most transactions of a dealer are to other dealers. We use bid/ask prices (greysheet) for this purpose. It is used as a reference for retail prices also. Most dealers try to work on a 20% rule. This will cover our expenses of processing the coins for sale.

Now I suggest that every collector obtain a copy of the greysheet on a semi annual basis. (every 4-6 months). This will allow you to better judge your coins value to a perspective dealer.

So lets take a few minutes inside the coin dealers shop.

First is coin values.
This is a hard subject to learn. Prices have many factors. Every coin will have different prices.
First consideration is the year of the coin.
Second is where the coin was minted.
Third is the overall grade of the coin.
Fourth is collectablilty of the coin.
There are many coins that will have all these conditions. Some will only have a couple of them. Learning the difference is what sets people apart.
When looking for value, learn the way the dealers do it. This is not really a secret. We use up to date coin price guides. Most commonly the greysheet. We also keep in constant contact with other dealers and our customers. Learning what others are looking for is the easiest way to have what they want. This equals sales. Most collectors search for the same things.

Second is where to buy.
This also takes time. Most collectors mistakenly search for the cheapest. This is a regular pitfall. Buying at a cheap price usually equals a cheap coin. Collectors rush into buying coins too quickly. Many seasoned collectors and dealers will tell you that it is far more important to buy the book before the coin. This is by far the best advice out there. Learning takes time and a commitment. It will save you many heartaches down the road. Once you enter into the market place, look for a quality dealer. Whether they operate a small shop, deal on ebay, or have a large business with an internet site. Take time to build a relationship with your dealer. Take into consideration their operating proceedures. Look for their guarantees and refund policies. Look for dealers who specialize in the area of numismatics that interest you. A knowledgeable dealer will not only help you build your collection, but will be able to assist you in your numismatic knowledge.
It is your money that you are spending. Make every purchase count.

Lastly, collectors wish to make money on their coins when it comes time to sell. This is not hard if you have done your work ahead of time. While coins should not be used as investments, everyone wants to make money. So again, think like a dealer. If you have purchased coins that are actively traded, they will sell quicker. If you have bought your coins in the grades that most collectors are looking for, they sell quicker. If you have bought well, they should sell quicker. This doesn't always mean that you will make a profit, but it should help. Most coins will appreciate over time. Don't rush to buy or sell. Learn all you can.

Knowledge is the key to this hobby. Many collectors see coin prices rise and think this is an easy way to make money. It is not. A lot of planning and thinking of the future are keys to surviving in this business.

There are many kinds of dealers out there. From people selling on ebay, to flea markets, to small shops, to large national dealers, to the TV shopping channels. All serve the hobby in their own ways. Some good and some bad. The key is learning how to spot the difference.