Where do dealers get inventory . . .

DMWJR · October 8, 2003 1:13AM

besides TT, Eureka, CCE, walk-in's, Ebay, and auctions?

BillJones · October 8, 2003 1:29AM

Mostly from other dealers.

I've bought a few collections, but most of the stuff that the public offers you at the shows has problems and is "optimistically" priced.

dorkkarl · October 8, 2003 1:48AM

pocket change. you know, like sacagaweenies & ms-69 pennies, etc.

K S

Tonelover · October 8, 2003 1:48AM

Speaking for ourselves:

TT, Eureka, CCE, ebay, no, no, no and no. Walk-ins have a minimal effect on quality purchases and the auctions are a decent although extrememly competitive venue. It's tough to beat all dealers and collectors who have vied for the same coin, then have to bring it home and mark it up some more. It's done at times but it's not the best way.

Our clients are an excellent source. After being in business for 12 years, there are always clients who need to trade, upgrade, or sell their collections. And it's particularly convenient knowing that the coins they got from us are of the quality we are more than happy to get back. This makes the negotiation process much easier. None of this "I need to see the coin first" kind of stuff.

In addition, if a client has a special want list item like a 1793 PCGS XF-45 Half Cent for instance, I could go to another client whom I may have placed such a coin with previously to if he has an interest in selling it.

Coin shows are also good thanks to the sheer volume available. But as with anywhere, one needs to filter through a lot of junk to find the gems.

Iwog · October 8, 2003 1:58AM

MOST dealers get inventory from bidding on estates and offering about 20-50% of bid. Although it may not represent the majority of purchases, it's the largest source of profit since the sellers are not coin collectors and have no idea of the real value. They attract these coin collections with ads in the phone book or newspaper.

My mother in law recently sold her late husband's coin collection to a local coin shop. She's an independent woman and didn't want to involve me. (mother in law syndrome) It was mostly raw high grade gold. I think she got $15,000 for $40,000 worth of good solid material. The dealer also advised her not to seek other bids because he was the best price she'd get. Gotta love coin dealers.

291fifth · October 8, 2003 2:26AM

Once you complete training at CDU (Coin Dealer's University) and are judged skillful enough to buy 1881-S Morgan Dollars you are allowed access to the "big vault". The "big vault" is located in a secret location in the southwestern desert, known only to CDU graduates. It contains bins full of dollar bags, shotgun rolls of modern coins, sealed proof sets, 55 gallon drums of circulated wheat cents, junk silver and, in a special section, common gold, which is prepackaged in heavy duty shipping containers.

ScarsdaleCoin · October 8, 2003 2:38AM

actually the small dealers have the US mint employees make it and the bigggg guys have their own machine shops and make all the stuff in house......

Conder101 · October 8, 2003 3:22AM

This thread reminds me of back when I dealer I know was first setting up business and he was talking with his accountant. The accountant asked "Where do you get your coins?". The dealer explained that you get them from collectors, auctions, over the counter, and other dealers. The accountant said "I understand that, but where do you get your coins?" So the dealer explained again. the accountant said "No, no, what I mean is when you run out of something where do you go to get more of them?" He was under the impression that it was like most other businesses, there is some warehouse out there that you call up when you run out of say 09-SVDB and just order another batch.

ohbaby · October 8, 2003 3:46AM

He was under the impression that it was like most other businesses, there is some warehouse out there that you call up when you run out of say 09-SVDB and just order another batch.

Well, that's partially true.

Take wild toned Morgans. They are made to order by some doctors, I mean dealers.

MICHAELDIXON · October 8, 2003 4:31AM

IWOG,
MOST dealers get inventory from bidding on estates and offering about 20-50% of bid.
.
Please, please take me to the estate sales where you can get coins for 20-50% of bid! I know no dealers who have that kind of luck! If you can do that, my hat's off to you!

Placid · October 8, 2003 4:39AM

The coin fairy.

DMWJR · October 8, 2003 4:45AM

I thought this would be an interesting topic. Obviously Tonelover has the sound business model in place, but I like the Coin University theory!

Actually I was just curious because I don't see how dealers can use CCE/TT/Eureka and still make a profit unless they are really socking it to their customers. And now that auctions are on line and accessible to the collectors directly, that avenue is drying up.

So, in conclusion, it seems that dealers are ripping off estates!!!

marcmoish · October 8, 2003 5:09AM

from that pedo guy umm silvershinycoin somethin whatchmacallit which reminds me I just realized that thread went poof

Marc

DMWJR · October 8, 2003 5:14AM

maybe shinycoinboy went poof too. (sounds like a name Adam Sandler would come up with)

SDCollector · October 8, 2003 5:33AM

I'm amazed at the amount of coins my local dealer buys from walk-ins. He has shown me boxes and boxes of stuff.

Iwog · October 8, 2003 7:04AM

Please, please take me to the estate sales where you can get coins for 20-50% of bid! I know no dealers who have that kind of luck! If you can do that, my hat's off to you!

Michael, you must be thinking of an estate sale where antiques dealers come into an open house and make offers on all the furniture. Other than that, you must not know any coin dealers.

Most coin estates are liquidated by survivors walking a collection into a dealer's shop, and selling the entire collection to the dealer for whatever he offers them. Dates and mint marks are ignored, you can forget about varieties like the three-legged buffalo, (in the estate I handled before I was a coin pro the dealer said it was counterfeit) and all MS coins are automatically valued at AU. You think this is an exaggeration???????? I haven't even begun to expose what is STANDARD OPERATING PROCEEDURE in the coin market.

The seller is almost always a wife who has no knowlege of what's actually in the collection. She's generally upset about her loss and not interested in getting more than one bid. The dealer will often discourage her from asking other dealers for their estimated value, and if for some insane reason she decides to leave his shop for a second opinion, he becomes rude and abusive and chides her for wasting his time or looking for a free appraisal. A coin dealer will almost always break agency laws (criminal laws written in almost every state to prohibit someone from marketing themselves as an expert, then profiting off their "expert" advice) but is almost never prosecuted for it. And I can go on and on and on.............

DMWJR · October 8, 2003 10:38AM

IWOG, I have overheard a dealer bragging about doing this to a widow. It made me want to throw up. He sold the man all of the coins, and then after he died, the dealer cleaned out the coins for the widow. I will never be back in his shop.

Being a lawyer, I understand that one bad apple spoils the barrel. I know all dealers are not like this, but unfortunately some are.

BillJones · October 8, 2003 1:39PM

Iwag's act gets pretty tiresome after a while. Many of us are familiar with it because he has posted the same stuff before over and over again. He hates ALL coin dealers and lumps EVERYONE of us in the same barrel.

I don't know why he remains active in a hobby which is dominated by crooks. He has so little objectivity that it's hard to believe his stories.

His latest one does not hold water. He tells us that he was able to look at his mother-in-law's collection of gold long enough to determine that it was worth $40,000. One would assume that he told her that, yet she goes out and sells it for $15,000. Does anyone detect that there is something fishy here?

BigE · October 8, 2003 1:45PM

Bill, the collection was worth $40K, but then Iwog dipped them (sorry, couldn't help it, just bid on your Oregon for you again Iwog)

-----------------BigE

Bear · October 8, 2003 1:47PM

All coin collectors should catalogue there collection with estimated updated values,

tell the wife or husband where the coins are and where the catalogue is. Then notate either a reliable dealer or

auction house that you have done bussiness with and list the names of the indeviduals

that she or he should talk to. A spause should not be left in the dark as to important assets.

You owe it to the one you love to see that they are taken care of by your estate. Of course, If you hate

them, then I guess you keep everything a secret.

roadrunner · October 8, 2003 1:52PM

A close dealer friend of mine frequently gets collections that are offered to him. He pays a fair 75-90% and gets his share. If he was down in the 50% and under range, he'd never get a thing. This is reality. The 1 out of 10 or 1 out of 100 widow that IWOG talks about is not the norm.

RR

Topdollarpaid · October 8, 2003 2:40PM

<< <i>All coin collectors should catalogue there collection with estimated updated values, >>

I keep my best coins in my safe deposit box, with it there is a scan of the coins showing cost or value.
There is a note that says where to take them and who to get offers from, and to get more than one offer.

Iwog · October 8, 2003 2:43PM

Bill, I'm going to answer you because I want everyone to see how ridiculous you look.

I was good friends with my late father in law (we shared coin collecting and other interests) and I knew his collection well. I'm not sure what kind of conversations you have with YOUR numismatic friends, but "how much could you get" wasn't what we discussed and his wife had no interest in the whole affair anyway. When he passed away, his wife liquidated his collection and I didn't find out what happened until after the fact. I had (wrongly) assumed she was going to keep it for her grandchildren. Why she didn't consult me I have no idea, but she's very independent and decided to handle it on her own.

Do I have contempt for most coin dealers? Absolutely! I have intimate first hand knowlege of their general practices and nothing I have ever said has been an exaggeration.

Iwog · October 8, 2003 2:45PM

Thanks Big E, all bids appreciated and encouraged.

Blackhawk · October 8, 2003 3:30PM

The two shop dealers in my home town are both the kind to take advantage of someone.

One guy has a very small shop where he displays about 50 slabs and 100 raw coins (mostly morgans and half dollars), with very little stock besides what's in the case. It seems that he has an endless supply of people coming in to sell him coins, and pays mostly bullion for the silver (even the good stuff). He turns the coins quickly to other dealers, and believe it or not, can support 2 families on what he pulls in. I myself watched him offer an older couple $12.00 each for their collection of BU Indian head cents. It's hard not to speak up in a situation like that, but the guys in business to make money. He'll just say an extra prayer on Sunday and everything will be A-OK.

The other guy is a dealer who came into his own about the time that people were selling their collections because of the high bullion value...about 1980. The guy has a big stock and will tell you all kinds of stories about putting back valuable coins he bought at that time for bullion costs. He's kind of high pressure and will not look at your coin without running it down or offering about 10% of what it's worth. This guy also buys alot from people, but probably doesn't turn it as fast.

Neither one of these guys has any idea about mintages, varieties, or anything else that a coin collector would like to talk about. They don't want anyone to talk coins, have nowhere in their shop to sit, and are rude. They like it when their shop is empty except for them and their next victim.

I know all coin dealers aren't like these two, but because this is what I've got to work with, my impressions are formed from their behavior.

originalisbest · October 8, 2003 3:35PM

That's too bad Blackhawk. I used to work for a small shop as a kid that, though I maintain fond memories of working there, could behave that way. Fortunately I am able to frequent a couple of local dealers who are nice enough, willing to pay a fair price if need be and are very enthusiastic about "talking coins". Did that just last Sat and it was fun! Also spent $50, not a ton of money and yet the dealer did not act as though I'd "wasted his time" with such a minimal purchase.

relayer · October 8, 2003 6:00PM

<< <i>Where do dealers get inventory . . . >>

From eBay and dead people.

darktone · October 8, 2003 9:14PM

As an eperiment send your grandma in to a coin shop with some expensive coins and have her ask the coin dealer to make an offer. You might not like what you find

. mike

Legend · October 8, 2003 10:13PM

Baseball is correct. There are two different types of dealers-shops and shows.

These day, for the higher end "better" material, its more luck than anything else. We can buy via the public (our customer base) or from dealers at shows (about 80% of our coins are purchased that way). Major auctions are another venue. The key is to have the "right" relationship with the dealers who make a living ferreting out fresh deals. In order to do so, you have to spend an awful lot of money with them continuosly-and expect to take some lumps every so often.

The smaller "shop" dealers don't have as much action and need to make a little stronger margins when buying from the public.

Ebay is also an option too-but it can be too time consuming to look for one or two pieces at wholesale level. Many dealers (at least the ones I know) prefer to trade at shows.

BillF · October 8, 2003 10:19PM

I remember about 25 years ago I took some coins I inherited into a couple coin shops here in the Denver to see what I could get for them. I can't remember what they were, but one was a gold coind from somewhere around 1880 and about the size of a nickel. The guy at L&L Coins said it was worth maybe $50 but he could only offer me $40 since he needed to make some profit on it. The other place down on S. Broadway said if I was lucky, I could probably get $80 and he offered me $70. I remember looking the coin up in some magazine, and a medium grade (which this one looked in REAL good shape) was listed for $195.

That turned me off of coins and coin shops for a long time. Just in the last couple months I finally ventured back into a coin shop, not to far from where I work. The place is called Colfax Coin Center and the people are friendly and they appear to have decent prices. I haven't tried selling anything, but what they charge is about 10% below the PCGS price guide (for PCGS coins).

barberlover · October 8, 2003 11:10PM

Coin dealers are crooks !!! All cops are on the take!!! All the Jews own the banks !!! [like me LOL]

Does anyone understand the way this thread is headed???

O.K. maybe the one about all my people owning the banks was a bit fugly, but so is the way this thread has turned. Dealers getting their inventory from ripping off widows ??? Look I know their are some scumbags out there, but lumping all dealers with shops together isn't fair!!!

Please Please !!!! Bill & other honost dealers out there don't take personnel offense because some people have had bad experiences with some rotton apples in the buisness, I had more then my share of being ripped by those type of slimeballs in the 70's to know that they are there, but I wont lump all of anyone in the same catagory.

As in any other proffesion [spelling?] there are indeed two types, but I would say they are the good & the bad not internet dealer -vs- brick & mortar. To say that some dealers engage in estate ripp offs of widows is true, to say that most dealers get their inventories that way??? Because you have been ripped or know people that have gotton ripped doesn't & shouldn't lump all dealers in with the slime balls that do this.

Les

DMWJR · October 8, 2003 11:43PM

The other guy is a dealer who came into his own about the time that people were selling their collections because of the high bullion value...about 1980. The guy has a big stock and will tell you all kinds of stories about putting back valuable coins he bought at that time for bullion costs. He's kind of high pressure and will not look at your coin without running it down or offering about 10% of what it's worth. This guy also buys alot from people, but probably doesn't turn it as fast.

Man, you must live in my hometown!!! I know a guy just like this.

Barberlover: Most of us know very well that you can't paint this group with a broad brush. My original question was where do the dealers get their inventory. So where do you (or your dealer) get inventory?

Typetone · October 9, 2003 12:02AM

One of my local dealers is really nice. However, he is very open about his buying practices. He says he pays 50% to 60% of list price (he uses a retail list). Then he offers the coins for sale at list. That sounds like a good margin, but most of what he has to buy is junk that will sit for a long time. He shop is full of raw good to very good stuff that has been around for years. So, I don't think what he is doing is unreasonable.

Greg

BillF · October 9, 2003 2:03AM

Anyway, to me what the purpose/intent of this thread was, is if somebody wanted to try and get started at dealing coins, how would they start, and get the coins needed at a price where they could turn 'em around in a reasonable time and make a profit. We could shop around and buy coins at a reasonable price and wait 15-20 years for (hopefully) the values to go up, but that's a real long commitment to sitting on our money with little perceived increase in value.

Iwog · October 9, 2003 2:23AM

I would NEVER advise anyone to try and make a living off of dealing in coins. Most coin dealers I know have serious attitude problems and are generally miserable. They trust no one, and treat their customers with contempt. Does this represent ALL dealers? Of course not.......just the majority of them.

That's not to say that you shouldn't buy and sell coins for fun and profit. I sell coins out of my personal collection all the time. The money I make is the result of careful selection and knowlege instead of feeding off of widows and orphans. When a buyer on ebay gets one of my coins for less than it's worth, I congratulate him knowing that most of my stuff gets retail or better. Collectors are friends, NOT POTENTIAL PREY! The whole perspective is different.

The only drawback is I could never make enough money to support myself. I have a day job.

Russ · October 9, 2003 2:29AM

There sure seem to be a lot of people that keep having terrible experiences with coin dealers ripping off widows and children by offering stupidly low money for estate coins. I had a recent experience that points to the opposite.

A friend and I partnered on a deal to purchase a collection that was left to a family by a collector, (the dad), who passed on. As is the smart thing to do, the children took the collection to more than one potential purchaser to get bids - us, and two real coin shop dealers.

We offered good, reasonable money for the coins and came in between the two dealers. All three bids were close in total. So, at least in this case, the dealers were very fair with the family in what they offered.

Russ, NCNE

Iwog · October 9, 2003 3:00AM

If there is more than one dealer involved in bidding for a collection, then they will come up considerably. That's why a coin dealer will ALWAYS say "how much do you want for it?" before he makes an offer. He's testing the seller to see if he can buy the collection for peanuts vs. having to make a reasonable bid.

Iwog · October 9, 2003 6:28AM

Another thread with more examples of this nonsense. Hey roadrunner, I think it must be mass hallucination since dealers always offer 75-90% of retail..........

IrishMike · October 9, 2003 6:38AM

I am not a dealer, have no desire to be one. This amazes me that people always want to blame others for their own behavior. If you know nothing about what you are selling, including coins and you only ask one or two people to give you a bid, what would you expect. I don't know what a fair offer is for someones collection of raw coins, but to expect to get the best price by going to one or two dealers doesn't make good business sense. Either take the time to learn something about them, contact someone for an appraisal or at least get several opinions.

There isn't enough time in life to go around protecting folks from their own actions. Whatever happened to common sense? Last point, if you have a collection that you know will still be there when you go, don't you think it behooves you to leave instructions to your heirs on how best to dispose of it and with some idea what the value is? Probably not, its easier to find fault with others.

jbsteven · October 9, 2003 6:50AM

irish

very well put and that should be at the front door of every coin shop for the people who think they got screwed to read.

Bochiman · October 9, 2003 7:24AM

Russ,

Since you leave close to where I do, I would like to know which dealers, locally, you feel are "good".

Ron

MadMarty · October 9, 2003 7:32AM

There are 3 dealers here within 20 minutes of my house. One is the dealer who switched my SMS sets, yes I got my revenge! Where do you think my MS67 Ike came from! The other is a dealer who is more of a collector, buys lots of stuff cheap, the third is the dealer I really like. Buys at good prices (for the seller) and takes his inventory to shows! Not all dealers are out to screw the public, just most of them!

Iwog · October 9, 2003 7:32AM

Irish, what the hell do you think the poor widow is doing when she seeks a member of the Professional Numismatists Guild to appraise her coins?? She's seeking the advice of a professional!!!!! What the hell is she suppose to learn about a large coin collection in a few days that has taken us decades to learn? You're going to fine her tens of thousands of dollars because she can't tell an AU55 from an MS65????? Are you serious????? To hell with that nonsense, all you dealer appologetics should be ashamed of yourselves.

If a seller consults ANYONE who claims to be a PROFESSIONAL, that buyer-dealer-whatever is bound by law to respect an agency relationship. An agency relationship means that if a seller is relying on a dealer for his/her professional opinion on the value of that coin, it is NO LONGER a seller beware transaction and the coin dealer BY LAW cannot rip off the seller. Do coin dealers ignore this? Absolutely......they've decided as a group that FRAUD (telling a seller that a coin is worth $100 when it's really worth $100,000) is a legitimate business practice and do it on a daily basis. You want to know what makes me really sick??? The fact that people actually try and JUSTIFY this practice!

baccaruda · October 9, 2003 7:46AM

very well put and that should be at the front door of every coin shop for the people who think they got screwed to read

I agree, that note should be hung on every coin shop's front door. I think there is a general feeling out there that if you need help or advice on coins - you should go to the coin shop. Maybe 20, 30, 50 years ago this was the case. It's now been made clear that coin dealers are not out there to enjoy coins with you, but simply to profit from you and take advantage of your ignorance. So, yes I agree some sort of warning should be hung on every coin shop door.

The only problem is that NO dealer would EVER agree to that sign being hung.

Luckily I have a dealer near me that still seems to enjoy collecting, and talking, coins. A rare breed indeed but he gets my business.

Russ · October 9, 2003 8:35AM

<< <i>Since you leave close to where I do, I would like to know which dealers, locally, you feel are "good". >>

Ron,

There are a couple in this area that are fair in both buying and selling. Renton Coin Shop is one. Old style dealer, very few slabbed and even has a bidboard. They don't try to cheat customers either way, but they also don't have exactly the best material around.

The other you've dealt with at shows - Discount Coins Of Kirkland. The guy with the cute daughter. A little bit of a "car salesman" type, but he's always been fair in our dealings.

Russ, NCNE

IrishMike · October 9, 2003 9:10AM

Wow, IWOG I guess I don't deserve to be treated any better than you treat anyone else who holds a different opinion then you. But least I will attempt to reply to you in an adult manner and not in an attack mode. I am still wondering if you read and processed what I wrote or just in a bad mood and eager for a scuffle. I did mention the exception of people taking advantage of the elderly but at the same time I laid some responsibility for the predicament on the dearly departed for not leaving instructions on what to do with the collection. Any of us who have $40K invested in anything owe it to our heirs to leave them the best possible information on how to dispose of the investment. That comment can hardly be construed as being a coin dealer apologist.

Suggesting that someone get several opinions of the value of a coin collection is sound advice, does not imply that anything about coin dealers. If your mother-in-law was left uninformed as to the value of her husband's collection then to me it would be a simple matter of communication through your wife as to its value if she didn't care for your opinion. Hopefully your wife has a relationship with your mother and you have shared with your wife how to dispose of your collection and what it's value might be.

One last thing, there isn't one of us God willingly and luck on our side that doesn't realize that some day we will be old and less sharp then we are today. There are trust departments in most every bank, estate attorneys etc. All of these folk get paid to protect widows, the uninformed and those who don't have the desire to learn what their assets are worth. An estate attorney or bank trust department would and could handle the dispostion of assets. We do it all the time, yes I am a banker. The one thing we can't do is force our services upon someone.

EVillageProwler · October 9, 2003 9:31AM

Iwog, et al:

What is considered a "ripoff" and what is not? Is it a percentage of FMV? If so, what is that percentage below which it is considered a "ripoff"? And, how do you determine FMV? Is it wholesale, retail? Auction pricing? CU pricing? Trends? How do you determine grade? ANA grading standards? PCGS? ACG?

I think there is too much talk about agency laws and the sense of outrage. Let us not be lawyers (or, pretend lawyers) for a moment and just be plain sensible. Try answering my questions, and also try playing devil's advocate.

I wholeheartedly agree that ripping off people is morally reprehensible. It may also be unethical and illegal. But, in order to try to get a handle on this issue, we need to set aside the emotions and build a concrete structure around this issue.

EVP

EVillageProwler · October 9, 2003 9:35AM

Oh, and, Doug, it would've been helpful if you had explicitly asked that dealers only respond to your query. Perhaps the thread wouldn't have been as colorful, but at least you would have gotten relevent responses!

EVP

Russ · October 9, 2003 9:45AM

<< <i>it would've been helpful if you had explicitly asked that dealers only respond to your query. >>

Like that would happen.

Russ, NCNE

EVillageProwler · October 9, 2003 9:50AM

Yeah, where was my head?!?

EVP

cladking · October 9, 2003 10:42AM

A few years back a major west coast coin firm bragged about their honesty and integrity
in returning a rare variety quarter which had been stolen in Florida in '67 (?) in the DuPont
robbery. They went on to say that they didn't even seek the return of the $150 that they
had paid a walk in for the coin. Unfortunately many of the readers recognized that the com-
mon variety that they thought they were buying was worth several thousand dollars. It was
a public relations nightmare that went all wrong.

To some extent it is to be expected that dealers are going to pay much less than market
value for some items which walk in. Items in small quantity, low quality, or which lack a
a ready market are just not going to bring full value when offered by someone who obvious-
ly doesn't know what he's selling. Other times SOME dealers' offers go far beyond the pale,
and really constitute illegal activity or dishonesty.

Where do dealers get inventory . . .

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