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Posted 11/19/2007 6:44 pm
I am not going to say whether offering 50% under retail is low or not. Consider this however....is your idea of retail is the book price or what the market is actually doing....consider if the dealers market is ebay or auction then the real market could be only 50% of book value...take off a dealer margin of say 25% and you will get 1/4 of book value and in my opinion the dealer offered a very fair price.
Consider that in most retail (this is the Aussie market here but I assume it is consistant all over the world) for items under $100, margins can be up to 60%. In aussieland the margin on a can of soft drink if the retailer sells at RRP is just on 60%. If you say a dealer margin of less than 50% is acceptable on similar value items then the dealer is making less than a lot of other forms of retail selling items under $100. It appears that when buying most items the general public is happy to pay for these profit margins but when it comes to collectables I have heard customers say margins of 10% are more than acceptable. If this were the case their would be no coin dealers as we would all be bankrupt. You must always keep in mind a coin dealer is a retailer and must make similar margins to other retail enterprises because at the end of the day they have the same overheads as other retail businesses. The only difference is a coin dealer relies on stock from the public...most other retailers rely on wholesalers. I can assure you that me and most other dealers have margins less than than that of other retailers.
Consider that in most retail (this is the Aussie market here but I assume it is consistant all over the world) for items under $100, margins can be up to 60%. In aussieland the margin on a can of soft drink if the retailer sells at RRP is just on 60%. If you say a dealer margin of less than 50% is acceptable on similar value items then the dealer is making less than a lot of other forms of retail selling items under $100. It appears that when buying most items the general public is happy to pay for these profit margins but when it comes to collectables I have heard customers say margins of 10% are more than acceptable. If this were the case their would be no coin dealers as we would all be bankrupt. You must always keep in mind a coin dealer is a retailer and must make similar margins to other retail enterprises because at the end of the day they have the same overheads as other retail businesses. The only difference is a coin dealer relies on stock from the public...most other retailers rely on wholesalers. I can assure you that me and most other dealers have margins less than than that of other retailers.
