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 Replies: 26 / Views: 2,503 |
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Pillar of the Community
United States
2049 Posts |
Hey guys,
I had some generic questions that I was curious about.
1) As a dealer, do you keep track of what you paid for coins on an individual basis and if so how do you know it? Do you mark it in code on the back of the 2x2 flip?
2) What kinds of margins are involved in coins on a general basis?
3) How often do you have people coming to your shop or show table wanting to sell coins?
I've always wondered how things operate on the dealer side of things. The coin shows I go to seem to have dealers that are always busy in both buying and selling. I see more selling going on at shops vs buying by the dealer but maybe that's just a timing issue. Any info you want to share would be appreciated. Thanks
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Pillar of the Community
United States
5318 Posts |
quote:
2) What kinds of margins are involved in coins on a general basis?
I'm very interested to hear what dealers have to say on this point.  Sofar I've seen two distinct tendencies with dealers: 1) Those who habitually overgrade, or doctor coins to bolster their margins. 2) Those who have a good eye and do the legwork to find deals that provide good margins for them, while also offering a good value to their customers. While I'm sure there is a range between 1) and 2), I've found that if a dealer makes a habit of 1), they're too lazy to move back to 2), essentially becoming coin grifters. I apologize if my unsolicited comment is off-topic, but I think it's very pertinent to the margin issue w/dealers. |
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Pillar of the Community
United States
2602 Posts |
From what I've seen in coin stores of dealers buying coins "off the street", this is where they make their killing. They offer like 5x face for silver, gloss over semi-keys as being commons and do their utmost to point out all the keys that are missing in the books. They come up with a number and then to look nice, add $25-50 to it, and the seller comes away feeling as though it was a good sell. I've seen so many of these transactions in different coin stores, that it seems commonplace. But maybe there are some dealers out their who are different. I know dealers need to make their living, pay the bills and rent on the store, etc, so I'm not upset by it. I just feel bad for the old ladies that come in with a must-sell situation and don't really get what their coins are worth.
From seeing many transactions at coin stores, I'd say that 40-50% would be a typical margin. However, one has to keep in mind that perhaps 80% or more of what the dealer buys is not going to sell right away. Only hot items, like key dates, are going to sell right away and at near book value prices. The rest of the stuff the dealer has to unload or sit on it, and maybe a lot of this would have to be unloaded at greysheet bid or ask to get rid of it, so they aren't sitting on their capital too long. My sense is that dealers would really not want to buy collections from the street, unless they can move nearly all of the merchandise quickly.
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Pillar of the Community
 United States
2049 Posts |
Sofar I've seen two distinct tendencies with dealers: 1) Those who habitually overgrade, or doctor coins to bolster their margins. --- I see alot of this as well and I liken it to used car salesmen putting a high sticker price to allow room to negotiate downwards to the more realistic retail value. I noticed at coin shows that alot of dealers like to have bargain boxes where coins are 1/2 off. Alot of these coins are overpriced to begin with so it is perceived as a value to the buyer, but in reality you are not getting as big of a bargain as you would like. I still search them though, and last week picked up a bunch of Morgan and Peace dollars in VG-8 or better condition for $12.50-$13 each so I was satisfied with my purchases. |
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Pillar of the Community
United States
5318 Posts |
quote:
...dealers buying coins "off the street", this is where they make their killing
And to be fair, there are two sides to that coin  Likewise, I can make a killing on dealers who sell unattributed rarities at 1:100 because they're overlooked in their Krause books, which is hardly the definitive reference.  True to that well-worn adage, knowledge is power..for buyer and seller alike. Edited by KurtS
01/28/2008 12:38 am
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Pillar of the Community
United States
749 Posts |
quote:
last week picked up a bunch of Morgan and Peace dollars in VG-8 or better condition for $12.50-$13 each so I was satisfied with my purchases.
Where might this place be, I'm in WI also  |
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Pillar of the Community
United States
2049 Posts |
quote: -------------------------------------------------------------------------------- last week picked up a bunch of Morgan and Peace dollars in VG-8 or better condition for $12.50-$13 each so I was satisfied with my purchases. -------------------------------------------------------------------------------- Where might this place be, I'm in WI also ---- It was here in Madison at the Sheraton Hotel on John Nolen Drive and Rimrock Road. I believe they have another show coming up the 1st Sunday in March and it should be the same group of dealers. Email me through my profile (is this possible?) and I will get you the details! |
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Pillar of the Community
United States
2049 Posts |
True to that well-worn adage, knowledge is power..for buyer and seller alike.
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Well said...there was another thread where a guy bought 28 Morgans from a lady at a garage sale for $425. Some people seemed to question his integrity but I believe in buyer beware as much as seller beware when it comes to transactions.
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Valued Member
United States
168 Posts |
my guy does a typical 5%...he knows that I know he's in the wholesale busniess.
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Valued Member
United States
231 Posts |
Wow, it seems that I am the first dealer to post here and I am kind of afraid to. You guys hate us don't you? lol I actually am recently new to the business and have made a few mistakes already. I make a rule for each type of coin that I buy. The turn around is different coin types. Silver halves and dollars have to bring a 25% profit. (this is acceptable because these coins sell out every week) Other silver coins are around 1.5x purchase price, nickels and common cents 2x purchase or better, older coins follow your gut and Key dates BEWARE. This is only true for us because we mostly get people building type sets and hoarding silver. All the customers building sets are working on Rosies, Washington quarters, Mercury dimes, etc. I bought a V nickel set and still have every single coin from it and it has been four months since I got it. Every day there is someone coming in wanting to sell or trade and sometimes five or six. We usually buy more than we sell in the store and sell on ebay or to other dealers in surrounding cities. I find that if I can do a higher volume, I can lower my prices and get people coming back. We are the only shop in town, but people will still drive 30 miles to another one if they feel you are ripping them off. |
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Valued Member
United States
82 Posts |
I took in a bunch of common 40's and 50's wheaties to my dealer that were repeats and just stuff I didn't want. 2 cents a wheatie!! What the heck is that about? I hear the going rate on ebay hovers around 6 cents. It was my first time actually selling a coin and I was a little shocked at how little he offered. I will probably see those wheaties on his bid boards next week! |
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Pillar of the Community
United States
1571 Posts |
I see a little of both sides to the situation, and still like MY position: I tend to trust people, and when I see something that I want, if I like the price, for what I'm about to get, then Consider it a fair deal. I don't like the "shyster type of sellers on ebay, and they give a bad name to the ones that are honest, and consider both side if the transaction. They know what they paid for the item, and know how much 'mark-up' is necessary to make a little profit. That is just good business. those are sellers I enjoy dealing with. I don't sell, never have, never will. I would not sleep at night, wondering if I sold something "way over value"! Dick |
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Pillar of the Community
United States
2049 Posts |
I took in a bunch of common 40's and 50's wheaties to my dealer that were repeats and just stuff I didn't want. 2 cents a wheatie! What the heck is that about? I hear the going rate on ebay hovers around 6 cents. It was my first time actually selling a coin and I was a little shocked at how little he offered. I will probably see those wheaties on his bid boards next week! === That doesn't surprise me. If they are common 40's and 50's wheats then they may have a hard time selling them. And if they do sell them at let's say 5 or 10 cents each, their profit per coin is minimal. They would have to sell quite a few of these to make it worthwhile. At the same time, if they sell them on ebay, their profits are eaten away by listing fees and final value fees, as well as the time it takes to take the pictures and list the item. So again their profit on these, even if sold at the going rate of 6 cents each would be minimal. I have seen people selling bulk bags of wheaties on craigslist for as low as 3 cents/coin. |
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Pillar of the Community
United States
2049 Posts |
Wow, it seems that I am the first dealer to post here and I am kind of afraid to. You guys hate us don't you? lol I actually am recently new to the business and have made a few mistakes already. I make a rule for each type of coin that I buy. The turn around is different coin types. Silver halves and dollars have to bring a 25% profit. (this is acceptable because these coins sell out every week) Other silver coins are around 1.5x purchase price, nickels and common cents 2x purchase or better, older coins follow your gut and Key dates BEWARE. This is only true for us because we mostly get people building type sets and hoarding silver. All the customers building sets are working on Rosies, Washington quarters, Mercury dimes, etc. I bought a V nickel set and still have every single coin from it and it has been four months since I got it. Every day there is someone coming in wanting to sell or trade and sometimes five or six. We usually buy more than we sell in the store and sell on ebay or to other dealers in surrounding cities. I find that if I can do a higher volume, I can lower my prices and get people coming back. We are the only shop in town, but people will still drive 30 miles to another one if they feel you are ripping them off. === Lol no we dont hate you. There are some that are jerks and act pompous, but most are good people. My original post was more along the lines of wanting to get some honest feedback because it is something I have considered going into myself. I make a pretty good living doing sales now, but it's not something I am passionate about so a career change is a possibility. Opening a business of some sort is a very attractive thing to me, but I want to gather as much info as possible to help me make the right decision. |
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Pillar of the Community
United States
619 Posts |
All dealers (any kind of merchandise) are out to make a buck. How much do you get when you trade in your car? Remember in college when you'd walked into the bookstore with your stack of texts that you paid $400 bucks for and tried to sell it back to them? No, you can't hate the dealer for trying to make money. Now, for the few bad apples who will lie or misrepresent -- that's a whole different thread.
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Pillar of the Community
United States
750 Posts |
All I can say is this quote and I do mean quote from the dealer I visit every Saturday. " Every person who walks through that door wants to )(*#@ me, they steal, bicker about price and want me to pay more for their coin then I can sell it for"
Thought it was rather interesting that he would make such a statement. I told him not to worry about me, If I steal from him he is out of business.. : )
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Replies: 26 / Views: 2,503 |
Posted 01/27/2008 3:34 pm
