What Do Auction Prices Represent? Wholesale Or Retail?

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CCFPress Press Manager United States 1420 Posts	Posted 10/18/2015 1:52 pm Doug Winter Numismatics - For better or worse, the current market has come to heavily rely on auction prices to determine the value of a wide range of coins. I am often asked: do auction prices represent wholesale or retail? A one word answer: both. The coin market is quite possibly the most transparent market there is in any hobby or collectible. PCGS, NGC, and Heritage provide comprehensive databases for nearly any major issue of United States coin, in a variety of grades. In theory, even an unknowledgeable collector now has access to records which only the most sophisticated dealers and collectors could access as recently as a decade ago. But with millions of data points for United States coins comes a big, hot mess: what does this data mean? Without the ability to interpret this data, we are left with a range of numbers. For very rare coins, which may have many years between auction appearances, it is easy to conclude that the most recent record (or APR) is a clear indication of value. As an example, I recently paid $42,300 for a PCGS MS64 example of an 1847-O eagle in the Legend 9/15 auction. This is a common date, but it is extremely rare in MS64 with exactly three known. The last time this date had appeared for sale was February 2009 when the same coin sold for $51,750. There is no clear-cut distinction about this being a "wholesale" or a "retail" value. The coin is worth at least $42,300, and it would have cost at least 5-10% more for a collector or a dealer to have purchased it from me. Read the Entire Article Report this Post to the Staff

Joe2007 Pillar of the Community United States 3843 Posts	Posted 10/18/2015 3:03 pm Depends on the composition of the auction. If the majority of the bidders are collectors, then it is retail, if the bidding is mostly from dealers then it is closer to wholesale. I'd think that most of the big online auction houses like Heritage and Stacks/Bowers are closer to retail prices than wholesale since there a lot of deep-pocketed collectors bidding. I've always heard that ebay is closer to wholesale, I'm not so sure. A lot of the more notable ebay stores seem to sell at high retail prices but the lesser known sellers seem to sell roughly comparable coins for considerably less. As a collector I go to a lot of local auctions (not for coins) and have learned over the years that some auctioneers (particularly those with auction houses) have many more collector/retail bidders while others do not. I try to go to those auctions where there are no crowds of collectors and where most of my serious competition will be dealers who cannot bid as high as collectors since they have to keep their profit margins intact. Report this Post to the Staff
john100 Pillar of the Community Canada 5324 Posts	Posted 10/18/2015 3:28 pm Most auctions have a juice rate of 15 to 20% plus taxes so I would say wholesale except for the very rare units. Report this Post to the Staff
Coinfrog Bedrock of the Community United States 94367 Posts	Posted 10/18/2015 5:09 pm I think Joe2007 said it well. Report this Post to the Staff
D0ubl3Eagle Pillar of the Community United States 5854 Posts	Posted 10/18/2015 7:34 pm On average, I think auction prices fall somewhere in between wholesale and retail though there is a lot of gray area where each one of these values begins and where one ends. I remember watching an episode of antiques roadshow a while back and the one of the appraisers was explaining the different types of value estimates one can give. In roughly increasing order, they are wholesale, auction, retail, and insurance. To me the order makes a lot of sense. Someone insuring a collectible is going to want to be confident the value estimate in the event of a loss will be enough to cover the replacement cost which typically means insuring for more than retail. From the perspective of the dealers, they will tend to avoid auctions if lots go for more than what they are willing to pay too often. From the perspective of the collectors, they will shun auctions if items keep on selling for more than what they would have to pay elsewhere. The dealer's maximum willingness to pay is around wholesale while the collector's maximum willingness to pay is around retail or the price charged by a dealer. If auction prices stray too fall below wholesale, it will attract lots of bidders thus increasing prices whereas if it too far above retail, it will discourage potential bidders and prices will fall. Auction prices will gravitate towards somewhere between wholesale and retail. Report this Post to the Staff
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