Puzzled: Ebay Slabbed Coins For Far Less Than Grading Costs.

They submit coins in bulk (discounted fees). The "losers" are dumped at a loss, but the "winners" (i.e. the 70s) pay for the grading and (hopefully) net a profit.

Nothing puzzling about it at all.

In addition to the scenarios mentioned earlier, new collectors seem to ALL be infatuated with "sending it in."

I bet 30% of all the posts I see in FB groups end with "Should I send it in?" Then more new collectors chime in with "I would!" or "Absolutely!" So off it goes. Then they get back something like this...



20 people told them it's plated and a damaged coin. Several with "Group Expert" tags like me, but 2 clueless people say stuff like "Man, that's the shiniest one I've ever seen!" or "That'll grade MS67 for sure!" and those 2 comments are what they latch onto and now they have a $50 slab with zero value.

And shame on PCGS for even slabbing that.

Bobby, I get that scenario, too. But it doesn't seem like n00bs sending individual coins could generate enough volume to fill an online store with thousands of PCGS slabs. Also, I think if a n00b got torched for fifty bucks on a worthless coin, they would be more inclined to keep it rather than sell it for five bucks and take a -$45 loss.

A lot of these look like proof set breaks where everything was submitted, but in a modern proof set (silver or clad), who bothers to grade the nickel and cent? Again, I get that people might pay up for State Quarter proofs, for example. But why would a dealer submit the other coins instead of just selling them raw or in a roll?

That just doesn't make much sense to me. Some of these 40% and 90% silver coins are selling for like $1 over melt, in a graded slab.

You might also send in a full mint set as the silver coins sell for a large premium in 70. You'll take the loose on the cent and nickel.

From speaking to a dealer if one sends in 1000+ coins the bulk submission is or was less than $10 per coin. I have no evidence it's that low but with so many graded modern coins I wouldn't be surprised if it was that low.

When you send in hundreds of mint sets, the value of your time adds up. It's cheaper to send it in than you or your staff take it apart.

I couldn't agree more with bobby131313, I've been on some of those facebook groups and called a liar and a hater just because I said someone's "error" coin was damaged.

I believe we have an imperfect understanding of the system. Large coin retailers aren't fools, or they would be out of business. They aren't incorporating repeatable, easily avoidable losses into every transaction. I can imagine any number of possibilities. For one, the $10 number could be way off at scale. For another, maybe my sampling period is at a low point price-wise. Perhaps there is another factor at work, for example, a deal packaging phenomenon or a purchase add-on phenomenon. Possibly a marketing advantage like number of listings, or generation of numerous sales and positive reviews. Those dealers are getting something out of it that they perceive to be worth more than the cost. But they aren't just blindly paying $10 to slab a nickel that sells for $3. Particularly when the costs are up front, and the coins can sit in inventory for a long time, tying up that cash outlay.

If they are, then that business model is ripe for disruption.