$20,000 Capital To Start A Coin Biz... How Would U Start?

Never actually thought about jumping in as a dealer, but that seems like it could be rough start if you don't focus on a specific level of customer... obviously the higher end/expensive stuff is out. I would think ebay resale of lower-mid range items (graded and ungraded both). Perhaps buying bulk at a large coin shows at bullion value (or as close to it as you can) and using that as your resale on ebay.

I'd start by adding at least one more zero to your stake, and preferably two. $20k is not enough to start a coin business. The point at which your business will require full-time attention is well below the point that it will provide full-time income.

Unless you can present a broad inventory across collecting interests and grades or a marked specialization to make specialists come to you, take a $100 bill and start flipping ebay cherrypicks.

Duh $20,000 is nothing, that goes without saying I thought? The point is discussion of ideas on how to start small with minimal inital capitol.

I have to agree that $20k is nowhere near enough.
You risk being greatly under capitalized and loosing the $20k, especially if your prime personal income to survive depends on this.

$20k would perhaps be a good start to set up a small sideline hobby business, that provdes additional income to your already established income, that keeps your family going.

You could perhaps start as an on line trader, but time would be needed to build up a good business reputation.

Up front business set-up costs, insurances, taxes, safe keeping, and inventory establishment have to be paid as well. That is quite apart of the cost of your own time, which would be intercepted, if you already have a job.
Loss of quality time with your family should also be considered.

Against these costs, it is good to consider the lost opportunity alternative investment strategy:
'How else, doing nothing, except investing the money, could $20k provide an additional income?

Another interesting way to look at this would be that you have been hired to build the initial inventory for an online / coin show dealer. The decision is done, you just need to spend the $20,000 and get coins for resell. What would you buy and why?

The original post asked for a Morgan dollar based coin business too. I would try and buy slabbed coins just below the big price bump. Those seem to sell well in what I would imagine your customer base being (online and coins shows).

Assuming the business is US based, I'd spend my 20k like this.

American Silver Eagles: These sell great around me, but a coin business isn't a silver investor. I wouldn't want to keep more than 4 weeks supply of any coin in stock. I don't see much room for profit though on this type of budget. I would like a monster box per coin price but not on this budget. I would buy about 5 tubes worth and call it initial inventory. Say 2 grand in round numbers.

Lincoln Wheat Cents: These are big sellers around me and I tend to think there is margin here. I don't see much profit potential in buying key dates to flip unless you are a master grader. My money would go to some wheat bags and try and purchase some collections to coin out by years and mintmark. I might spend $1500 - 2000 here as well.

Indian cents: Another big seller in my neck of the woods. Guys buy these up in the LCS all the time at a dollar a piece in the bargain bin. I would spend $500 - $1000 here confidently.

Buffalo nickels: Not a big seller, but I see them move still. Maybe $250 - $500. You need variety. If you want to catch all the fish, you have to fish all the holes.

Junk Silver: This is a big seller around me. The 40% never moves even at 10% under melt. Again though, not a silver investor so I don't want to keep more than say 2 - 4 weeks supply on hand ever. I think I could sell this though so I might spend $5000 here. Avoid Roosevelt dimes, Washington quarters, and Kennedy halves. I would pick up some junk foreign silver here too. Can be bought cheap and sold slowly at a higher margin.

Gold: I love gold but it doesn't turn. I would not stock gold. Obviously no platinum or palladium coins either.

Key dates / quality type coins: This depends on your target audience and your ability as a numismatist. If comfortable with grading and pricing the coins and committed to travelling to shows to both purchase and sell, then I would spend money here. Maybe $5000. More risk here, but if you want the fruit you gotta venture out on the limb to get it.

Morgan dollars: King of the hobby. I would put $5,000 - 7,500 here confidently.

That is my $20,000.

Cascade , for the US coin business focusing on Morgans is like dumping ten bucks at a Carls Jr. or McDonalds. It will seem like instant gratification but then you have that queasy feeling in your gut. Yes I do speak from experience. I started a coin shop in 1985 after working a couple of years for a large firm here in Canada. I had the experience and the knowledge of how to run a business ( business college)but was severely undercapitalized. My inventory was worth about 100K at cost and was saleable stuff. My cash flow situation was such that I was always scrambling in the beginning and that was NO fun. Things did get easier the longer I was established and I was fortunate enough to have a mentor ( a stamp dealer friend ) who also backed me on larger deals. My advice to you DO not attempt this with 20 K it will be the saddest business decision of your life. If you think that you will like the business and want to try it as a career, there are a couple of different ways. First go work for a dealer who will give you a shot, even if it is for ten bucks an hour. The experience will be invaluable and you will learn lots. Conversely take the twenty K and go hustle coin shows and work the floor. It is a grind and you will learn on the fly. The joy of being this type of dealer ( often called vest pocket) is that it will not be your primary source of income and you will learn from the small mistakes you are bound to make. There are lots of guys who buy at shows, or on ebay. and then fill want lists for mail order or sell on line themselves. This is the way to go in my opinion. So go give it a shot and good luck to you. Heck the worst that should happen to you is an experience that costs 20 K. The best is that you become super successful. That is up to you.

Let's start with the first question.

Where does your stock come from?

I think having your own website would help compared to using ebay at a 10% cost to you every time you sell a coin valued at 2500$ or less. This would probbaly set you back a lot money wise but at least you could advertize your website to places like here and people could go directly to your store.....Ebay is rough for small time dealers the big dealers have so many coins to offer and most likely at a lesser price than you could.

My preference would be 1 cent coins maybe buy some roles and have them graded then sell the ones you can turn a profit on....pretty hard to do with Morgans with a 20 000$ start. You would have a much greater chance finding nice red cents in roles to turn a profit.....that is how I would start then if that works out then maybe use some of the profits to buy a few nice Morgans.....but I would stick with the 1 cent pieces as my main focus and Morgans 2nd. I think the market for 1 cent pieces is much larger than the Morgans.....I could be wrong but from what I have seen there are soooo many cent collectors and new collectors getting into hobby seem to float into that set most of the time as well.

And maybe everything I have said would not work either....who really knows.

I would never do it as a full time thing I would keep my career and do this on the side....just not worth ending up living on the street or risking every month not having enough money to eat and pay all the bills.

My age would play a lot into this as well me been in my mid 30's I would be fine trying a project like this knowing I have a full time career to fall back onto. But if I was much older and had minimal money to live on or no retirement plan this would be out of the question.