Coin Store Business Models

1. Buy new stock and supplies direct from vendors and resell at a slight markup.

2. Buy/trade coins from customers and estates and resell them at a slight markup.

The smarter your decisions are about pricing and fakes and such the more profitable your business can be.

I work for a music store and we buy in used gear. We tend to have a 30-40% markup and "try" to sell it for more when we can. Most items move within a month but sometimes 3-4.

Buy it smart and move it quick.

If anyone has ever gotten a low ball on their coins and were ticked off then they've never been in the business.

The last two posts (Go, and CoinHunter) shed a lot of light for me.

I couldn't see how the stores could survive on 5% margins. But I can at 30% to 40%.



What about junk silver? Some of these stores take in a bunch of that stuff. Where and how do they move it?

To GO's point about people complaining about getting a low ball offer on a coin, he is 100% right there. Coin collectors are a fickle bunch, and can be very specific in what they are looking for. You may have a coin in the grade they are looking for, but it may not look just the way they want it to. So often times a coin can either move the same day or sit there for months or longer. Or a dealer may have alot of a particuar coin. For example a better date like a 1955 Franklin in MS-63 or better, or a 1950-D Jefferson nickel. They may buy one of these at 50% of Greysheet bid because they are already overstocked on the item or there just isn't much demand for it from their customer base. It's not that they are trying to rip you off, but rather they are aware of what sells and what doesn't and realize their cash could be tied up in that coin for a long time. Eventually this may mean having to liquidate at at minimal profit down the road. Again, it's all about moving product and making your money work for you.

Out of the 6 shops here in town, not one is a single owner enterprise. Three of them are partnerships of sorts without any hired employees, but the other three are big enough to hire employees. In this bad economy, I don't think any shop would run as a solo enterprise. There's too much risk with both robberies, and then what happens if you have more than one customer in the store at the same time? You can't effectively watch 2+ employees with one person.

Also, the shops in this area are all in high traffic areas. Four are in suburbs of the main town and are on the main thoroughfare. The other two in the main city are on heavily trafficed areas.

Saruma, if you're thinking of getting in the business trying ebay out is actually a good lower risk way to learn some lessons of the trade without losing everything on a huge startup capital loan.

A few things to remember, selling on ebay isn't that cheap. Although cheaper than overhead on a brick and mortar store. You get your money now, and ebay bills you for the fees later. You have packaging, shipping, photography, listing, and the time it takes to do it all.

If you are barely making it on ebay, you won't make it in a brick and mortar.

Me? I've been eBaying coins as a hobby for about 10 years.

That reminds me, one more suggestion you have to decide whether you're in it for the hobby or the business. Usually the neatest coins to keep are also you're high profit items to move. To make it financially you'll have to let some of those big fish go. I haven't been able to do it myself yet, which is why it's my hobby and not my business

Yep ebay keeps going up and up for fees. I sell on ebay (not coins) and now that they take a final value fee from shipping, it seems that the EBay/Paypal cut ends up being around 16-17%.

A few other things to consider with ebay. You are going to have buyers that are going to abuse the system. Some will claim the package was not received or was empty on arrival, while others will try to return items only because they have buyer's remorse but will do it under the guise of "item not as described". I sell some sporting goods on ebay (new and used) and have a very clear no return policy. Basically I would rather not sell the item then deal with an idiot who can't figure out what size item they need for a sporting good. I had a buyer once return a used football helmet because she expected it to look like brand new so that it could be autographed by an NFL player. The pictures, description and no return policy were clear as day but she sent it back without even notifying me first. Long story short, Paypal sided with her despite the description being 100% accurate and the "all sales are final" being stated twice in the auction listing. So my point is that while ebay is a good starting avenue, it's not without everyday hassles or having to deal with bad customers, just like you would in a retail store. The nice part is that it can be a good way to test the waters to see if you like buying and selling coins without the commitment of a lease for a space, merchant services, alarm system etc.

You must be doing it seriously wrong.