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 Replies: 15 / Views: 1,400 |
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Pillar of the Community
Australia
853 Posts |
Poll Question
Do you think that discounting new coin releases below recommended retail prices helps the hobby in the long term? Results
| Yes...bring it on |
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55% |
17 Votes |
| Undecided |
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29% |
9 Votes |
| No...it kills the secondary market |
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16% |
5 Votes |
Poll Status:
Locked
Total Votes: 31 Counted
Last Vote:
09/11/2007 11:29 pm
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Valued Member
United States
64 Posts |
Thank you for asking the question, but I find it surprisingly hard to answer. I went for "Undecided".
We always want to pay as little as we can for our coins. I guess that if we regularly see coins advertised for less than expected, their perceived value goes down in our mind. At the same time, if demand is high six months or a year after a coin is released, its value is going to rise anyway. So I'm not sure it makes a big difference in the long term.
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Bedrock of the Community
United States
62064 Posts |
I figure if I see a new variety of coin in a book or from a site, I will keep looking for them. How many remember the years that passed without looking for doubled dies on the 1990 coinage as the mint mark was added to the die and the single squeeze method removed hope for doubled dies. If we hadn't heard or read about it, how long would it have taken before we caught on? So why not discount books. They are a tool we can learn with and if its cheaper we might tell out friends about it. Probably not if you had to pay full price. If its a deal you tell others.
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Valued Member
United States
287 Posts |
I like cheap! at least right now anyway...
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Pillar of the Community
 Australia
853 Posts |
Cheap is good but consider this. The cheaper the price the more that are sold. The more that are sold the more that appear on the secondary market. The more on the secondary market the lower the price that is acheivable. The low the price on the secondary market the greater the potential loss to the investor/collector. The greater the potential loss to the investor/collector means less collectors. The lower the number of collectors the less people in the hobby meaning the death of the hobby....so discounting is good is it?
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Pillar of the Community
United States
1984 Posts |
I voted 'no' but not because of the reason stated. My problem is with recommended retail prices that are too high.
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Bedrock of the Community
United States
12437 Posts |
Interesting question Bigfella. Is RAM or Perth selling items below their suggested retail, is it a matter of dealers buying at a discount from the mints and then selling underprice, or is this just a hypothetical question?
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Valued Member
United States
155 Posts |
It's a very tough call to make as it can affect things differently over long periods of time. Discounted prices from resellers basically drive the values down over the short term, ie if a $50 piece is available for $40 the price is now effectivly $40. If the piece is desirable enough for the price to go up, that is what will really determine the market value over the long term, so a short term swing won't really affect the stability of the value.
When dealing with modern commemoratives from my point of view often they are not very desirable for the money charged. Either in a situation where the design is not very inspired or the subject matter is not interesting to me I don't see the reason to shell out money for them. Also if a far higher number of them is produced then there are people interested in them the performance of prices will be bad. I think the most important aspect is that the coins are made with the best designs and artwork and in quantities not exceeding demand, then they will always be safe for the long term.
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Valued Member
United States
277 Posts |
The lower the "entry fee" to get in a hobby the more poeple it will attract. New releases are what will attract new people.
Fatcat
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Pillar of the Community
Australia
853 Posts |
quote:
Interesting question Bigfella. Is RAM or Perth selling items below their suggested retail, is it a matter of dealers buying at a discount from the mints and then selling underprice, or is this just a hypothetical question?
The reason for the question is that in Australia 2 dealers in the last week or so have announced they are shutting the doors. The main reason for this action is discount sellers. In Australia you will find the discount guys use ebay and a pretend dealers (ie they do not do it as a profession, they are funding a hobby). Because of rents and expenses of the business they just can not compete and still pay the bills. This means now 2 more areas of Australia have lost an outlet to buy and years of expertise that ebay pretend dealers can not offer. Within 200km's of me 2 dealers have shut up shop in the last 5 years. Although my shop is 200km's away from these areas my mail order sales from these areas has decreased signifcantly whilst other areas that I know have coin shops have increased. I do buying trips in the areas where the coin coin dealers have ceased to trade and the amount of material I was buying first increased, now it is decreasing. This shows when the coin shop closed people decided to get out of the hobby...now several years later everything is now sold. Most of the stuff I buy is from the era prior to the coin shop closing. The bottom line is in areas where there is no coin dealer the hobby dies. Dealers are closing in reasonable numbers because of discount dealers. So discounting is good is it? The other thing that is happening in Australia is secondary market prices on new items is falling. The catalgues do not reflect this but the ebay market does. The problem is because of discounting people will buy more of a product at a lower price. This has a huge affect on the secondary market as because there is more of an item sold in the primary market the secondary market can not sustain the price and the price will fall. The affect of this people get out of the hobby as they see they are loosing money. To say prices are too high in the first place is not fair. I have spoken to the Canberra mint about this very issue. First they point out that Australian products are some of the cheapest in the world. Compare our mint sets at AU$23.50 with most euro sets at AU$45.00 on release. The second thing they state is pricing is based on what makes both the mint nad dealers a reasonable profit. The third thing they state is the price structure has a large component based on what price will cause the sale of the number of units that the market can sustain. In other words if the price was lower too many of the item will be sold causing a flood in the market, therefore killing the secondary market. If the price is too high not enough are sold causing largly inflated prices on the secondary market....both of which are not good. By discounting you are only tappering with the secondary market...placing it in a flood situation (see paragraph 4 of my post). If killing of businesses, killing off geographic areas of the hobby, flooding the market causing lower secondary market prices and therefore killing peoples investments and forcing them out of the hobby is a good thing then I need to rethink my view on life. |
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Pillar of the Community
United States
1984 Posts |
Bigfella, I completely see where you are coming from. In my crib we call it the " Wal-mart" effect. Near me most people won't treat special modern mint products as much more than bullion and in general they don't like to pay high premiums to acquire it. Whether this will change is anybody guess, but I know it won't change around here unless the greater economy picks up some steam. |
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Pillar of the Community
Australia
853 Posts |
In my opinion the economy picking up will change things little. Limiting supply will.
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Valued Member
Australia
222 Posts |
Downies' large discounts on their RAM issues demonstrates that those issues were overpriced in the first place. If discounting them means bringing their prices back to earth, then discounting is the way to go.
Collectors will win and collectors will lose. If they buy RAM issues at the peak of the hysteria, then of course they'll lose money. But this goes for any other market. You can't blame the discount dealers for selling coins to cheaply when collectors shouldn't have bought them so high in the first place.
Equally, selling coins cheaply stimulates demand, potentially bringing more collectors into the market, or giving collectors a chance to buy or get into a section of the market they couldn't afford to before.
By the way, which two dealers close? Doug is one, right? Who is the other.
Eric
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Pillar of the Community
Australia
853 Posts |
Zepplin in Brisbane is the other one.
Downies sale is in some respects is silly. One or two pieces I can understand what they are doing...they are simply clearing stock they over ordered on or simply had poor sales on. The other items I can not understand why they are selling them at the prices they are as I am still selling a fair number of the coins at what was the current market price (ie not at Downies giveaway price). In fact I even ordered some of the Commonwealth games 50c coins from them as I still have good sales on these.
What I find difficult to fathom is all the products Downies have in their fire sale I thought sold well (or I had good sales on them anyway). Bottom line is they must have well and truely over ordered or get a great deal from the mint on the mints excess.
It may not be a problem of overpricing on the primary market but over supply. I tend to think however that less people are prepared to pay primary market prices knowing how discounting is killing things.
What happens if the mint drops RRP on new products. The discounters will still discount on the dropped RRP. This maintains the problem so does the mint just drop RRP again!! The problem that is occuring now did not occur in the 1980's and early 1990's when the mint was a lot more stringent on who could buy wholesale and discounting did not exist.
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Pillar of the Community
Australia
2830 Posts |
G'day, with respect, the question highlights the unreality of the NCLT market.
Stick to Circulating Legal Tender:
the entry price is face value;
the quantities are not "managed" to create value where there is none;
it's fun to look at your change.
I quote: "The bottom line is in areas where there is no coin dealer the hobby dies." - maybe. I live 3,000 km from the nearest dealer. There were two in Darwin: one disappeared, leaving some bills unpaid; the other retired due to ill-health 5 years ago. I'm not saying that there are a lot of collectors here, but I collect a few lines of european coins from 1789~1820, thanks to E-bay.
It must be difficult running a coin shop, when faced with the realities of rent, etc. However, I suspect that E-bay makes business possible, without being dependent upon proximity to a sizeable market.
Shops don't have to justify their prices: but affordibility is essential if the marketplace is to remain viable.
Peter in Oz
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Member
United States
3242 Posts |
I voted yes  The reason if I get that way I will sell that way plus It may sell at a higher price or what the market will bare! there is no reason to pick someone pocket dry if your a seller you want them back not mad they payed a high price for an item. |
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Replies: 15 / Views: 1,400 |
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Posted 08/23/2007 4:22 pm
