Last Thursday I decided to drive about 25 miles to get to a local coin shop -- which I have never visited before -- and see what's what. I had not been to a coin shop since the late 1980s, as a point of reference, and my last show was TNA in June 2016. It ended up being a great shop, clean, well-organized, although stocked mostly with bullion, and I spent a good bit of money, and the owner and employees were more than happy to discuss the business and the hobby with me -- so I asked some questions, and thought that the CCF crowd might find the answers somewhat illuminating.
Time in business: 30 years
Product selection: Raw Morgan &
Peace dollars, PCGS/NGC graded coin slabs (one full case), silver and gold bullion (the rest of the shop), coin supplies - tubes/albums, bins of bargain priced coins in 2x2's by denomination ranging from Large Cents->Wheat Cents to Seated Halves->Franklin Halves, a couple of complete sets in Dansco's.
Notable absences: Colonials, paper money/currency, non-bullion world or foreign coins, ancients
On the business now vs. 5/15/25 years ago:
Now most customers come in to buy silver and gold bullion, rounds, bars, etc and don't care about coins at all except
ASE's, Libertads, whatever. As a result inventory is now maybe 10% coins. 15 years ago - modest demand for bullion, much higher demand for coins. 25 years ago - little to no demand for bullion, all coin inventory. Owner states most of the bullion buyers are motivated by fears of economic difficulties / a lack of faith in the soundness of the paper dollar.
On the average customer now:
Almost no one under the age of 40 walks through the door unless they are trying to sell something they
inherited or looking to buy bullion gifts. Most of them ignore the coins entirely except for
ASE's and Gold Eagles. Little to no interest in classic gold or classic/modern US issues. However, there are still a few coin collector customers who come in; they are loyal, knowledgeable, and very friendly, and help clear out the coin inventory.
On collecting coins as a hobby:
Feels that numismatics is a hobby is "dead" and that no one under 30 is going to be caught dead admitting to being a coin collector anymore; thinks that most of the kids are too busy staring at cell phone screens to look at coins, and also talks about how hardly any businesses do cash transactions anymore, everything is debit or credit. As he puts it, "most of my coin customers are retired old men." He thinks that the growth of the investment market in high end graded coins and the popularity of bullion have been the only thing keeping the hobby alive. Feels that the hobby has become too expensive for many blue-collar folks to pursue and that investors have driven prices way up.
On coin collecting vs. other hobbies: feels coin collecting ended up slightly better off than sports cards, stamp collecting, beanie babies, etc. but still these days being supported mainly by investors and not collectors. States slab graded coins raised prices by a lot and made coins much less affordable which hurt the collector market quite a bit.
Value of coins collected in the future: Sees the bottom falling out of the market as the buyers all get old and pass away with no new interest from young folks. Thinks non-bullion coin prices will soon experience a huge price crash within 10-20 years and is recommending to all of his coin customers to get out of the market before "the bottom falls out."
On setting up at coin shows and other local events: Cost of the tables, cases, etc. and security and safety of transporting the merchandise is not justified based on low turnout at most shows, little or no interest in non-bullion products, and thin margins. States Internet has been a much more profitable avenue of sale with much reduced overhead and expenses, but even then, inventory can sit for 2 or more years before someone buys it.
On merchandise selection: Paper money was never popular with most customers even years ago being way outnumbered by coin collectors; no demand for non-bullion foreign coins, ancients, or colonials so cannot justify the cost to keep in inventory. Says that the rise of the slabbed-coin industry hurt sales to people who used to just come in to fill album holes because very few customers still pursue album sets, wanting instead high end investment-grade slabbed coins.
On how to possibly get young collectors back into the hobby: notes that a few young collectors have had a lot of interest in NCLT issues such as Disney coins, colored coins, holographic coins, etc. Thinks that the US would do well to license Pokemon or Transformers or MMA fighters or other pop culture phenomenon and release affordable NCLT issues, tokens, etc. as well as taking programs like the
State Quarters and making Federal issues for football/baseball teams, famous actors and actresses, etc. to reconnect a younger crowd with coins. Maybe adding QR codes to coins that can be scanned with smartphones to add the coin to a virtual online collection, score points, and trade with friends online.
Posted 03/15/2017 10:21 pm
