Coin Store Business Models

Many reasons for a coin store to keep on going has been noted here so far. Most that I know of also:
1. Sell miscellaneous coin related items such as plastic coin rolls, paper coin rolls, counting machines, Albums, Folders and on and on with lots of coin related items.
As an example go to the Whitman web site and request a catalog and see lots of items dealers can and do sell.
2. Not sure how it works but dealers get the items mentioned in 1. above for fantastic discounts. Example is a dealer at coin shows sells all versions of the Red Book for $11. He used to be $10 but just raised his prices.
3. Many, far from all, coin stores also sell other collectibles such as stamps, sporting cards, old baseballs signed by players of famous teams.
4. Almost all coin stores buy coins at an amazingly low price from unsuspecting people and sell at fantastic profits.
5. Some coin stores also sell used Albums and Folders that where taken in for the coins and now the Albums and Folders are pure profit.
6. In some instances the store is in a building owned by the people in the coin store so no rent. Electric, gas and water in those instances are part of the building's expenses.
7. Other things that may go on in a coin store in some areas are difficult to prove. For example a coin store I know, you need to press a button by the door to get in. Once inside someone comes out of a back room and does not appear to know or care about coins. I'm told if I wanted something to either say what it is or get out. I leave and he goes back to that secret room where only a fly may know what goes on. They normally have a sign on the door saying NOT OPEN. That sign is there about 90% of the time. Store has been there for many years too.

Yep, I think we had a 40% discount off of the retail price if we wanted to buy these items for resale in the shop.




Unfortunately this is true. I heard a story from one of our customers about another dealer who I wont mention. He brought the dealers some BU Washington silver quarters and was offered the normal 90% buy price. The guy replied to the dealer that since they were only worth the silver value, he would go back home, hammer the heck out of the coins, and bring them back for the same price. The dealer's reply was "no, no don't do that". That dealer lost a customer forever.




While true, this is a very very miniscule profit in the grand scheme of things. I would say less than 1/10th of 1 percent of the overall profit.




True but the building still had to be paid for at one time in one way or another. So it may not be a recurring cost, but there was a large cost at one time to someone.




There is a shop like that here in Madison, but I noticed they are now leaving the door unlocked all the time. Before you had to be buzzed in. The store has a bank drive through set up inside the store with the bulletproof glass and such. The guys working there sit in that back office and do commodities trading all day long. They're actually really helfpul and both really nice guys. They really don't care what they sell in the shop because their money is made with the commodities brokering and trading. Kind of an interesting setup.

Ebay's final fee is currently at 9%. Pay Pal is at 2.9% plus $.30 per transaction.

There's a lot of talk about double dipping but was it double dipping before they bought Pay Pal? No. So it isn't now. It's 2 different services.

There's talk about a monopoly. Nope, there's Google Checkout and Amazon and they are doing well.

I don't care for them charging fees against shipping cost because that's not my money. That money belongs to the PO. If you compute this in on a $15 flat rate box the final percent is higher. I know why they did it but they could have done better. For example if I use flat rate, no charge. In fact if I pick shipping costs from a list, no charge. It's only when I stick some stupid amount on the sale trying to get out of fees does the charge kick in and then make it horrendous so as to discourage such practice.

It's hard not to think about having a small shop but I don't have enough shirts to lose :)

I believe ebay only allows Paypal transactions. They want us to use "their" service exclusively on ebay. I have seen that your listing can be removed if mentioning other forms of payments such as a money order. But the silver lining in that is we have some level of protection of purchases on Paypal transactions.

Unfortunately I am not a volume seller so the fees bite a little more for me.

ebay hijacks yet another thread!
I don't know if this point has really been touched yet...but...most coin shop owners didn't just wake up one day and say "I'm opening a coin shop today"
Most have spent quite a bit of time doing shows and working their way up, building a client base and a good size collection. Client list doesn't just include who you are selling to, but who you get good deals from.
It seems to me that most coin shops are just the next logical step for a dealer.
I understand this may not seem like a business model, but it's just the progression from collector to store owner/operator.

Odd you should mention a place in Wisc. For many years going through a town there callec Abbotsford, there was a odd shapped restaurant in almost the middle of town. It was completely round and never, ever open. It was there for at least 20 years that I know of and never open. I asked local people and was told "What place is that?" "Never noticed"
Sorry to get this post distracted again. But things like those places make me wonder about a lot of coin or so called coin stores.