Resellers vs Collectors vs the Mint
Pedzola
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The recent limited issue from the mint has brought out all kinds of resellers for a quick and profitable flip.
There is ample evidence to suggest that many who purchased the coin did so solely for the profit potential; either individuals with no interest in collecting, or dealers in the business of selling coins.
There is also evidence that many who purchased found ways to procure multiple coins despite the household limit of 1. They may not have explicitly broken the HHL by using different addresses or proxy buyers, but I would argue this still violates the spirit of the household limit, assuming the objective is to provide as many collectors as fair a shot as possible to get 1 coin.
I propose that the Mint should find a way of selling coins that is better than the current method at distributing the coins as broadly and fairly as possible and limiting access to resellers.
I think the root cause of the whole problem is that there is a profit potential at all. One solution would be for the mint to either charge more or not limit production of in-demand products. If the recent ERP silver eagle was $500 from the mint instead of $65 I bet reseller demand would have been severely depressed, getting more into the hands of real collectors. Or they could have kept the price low but mint to demand without a cap.
If the mint continues to fund coin dealers and resellers with easy flip opportunities (there may be other motivations to provide low cost and limited mintage products) then they need to figure our a better way to sell the products.
A random lottery of some sort would remove the advantage of those using bots or other technology to beat the system.
A forced distribution by location or other demographics might provide a more fair dispersion. I think one obvious change could be to limit sales to US customers only.
What do others think? Is the status quo fine or does the mint need to change something? Are big profit flips good for the mint and the coin collecting community? If not, what could be done?
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This screed is long and, I think, misplaced.
If the Mint charged $500 for a coin that they themselves control the mintage of, that would be a tremendous abuse and conflict of interest.
Yes, they could have minted to demand, as they do for virtually every other coin they make. The problem with that is it does NOT create the kind of interest and hype that this did.
The Mint did EXACTLY the right thing if you recognize what they WANTED to happen. They wanted to make a splash and they did make a splash.
Big profit flips are GOOD for the Mint because they keep people looking at the offerings. Are they good for "collecting"? That's a more complex question.
The goal of THIS offering was NOT to get one of these coins into the hands of every individual who wanted one.
Probably a relatively unique perspective I have sitting at the corner of 2 different communities:
With each passing US Mint huge flip opportunity, think 2018 palladium proof and this coin, as well as the smaller flip opportunities like the pride of 2 nations set or the 2019 palladium proof, more and more people outside the coin collecting community are getting involved in buying mint products solely to flip for a profit.
How do I know? Because I'm also a member of a community called 'churning' where we try to maximize credit card rewards. Mint offerings that are expected to sell out (or have anyone who is offering people a guaranteed profit to buy the particular issue) are now posted 10's of 1000's of followers of churning blogs - for example doctor of credit where he told people about this new mint offering from about 2 weeks in advance (reverse proof 19) and when to buy it and then also had a referral link for a buyer's club for where you can unload it for a guaranteed profit. (A buyer's club uses random people to buy an item to get around household limits.) There were multiple buyer's clubs that were advertising to their followers to buy this particular coin and then immediately ship it to them. The buyer's clubs were walking people through the steps for how to create multiple mint accounts and get around the HHL limit so each person could try to get multiple (I didn't see this first-hand because I am not a member of those buyers clubs but that's what I was told). I wouldn't be surprised if they got a sizeable fraction of the mintage through all their buyers. Not like 50%, but maybe more than a few %. Their messages were beamed out to 10's of 1000's of people. On the churning subreddit, I think a dozen or 2 people posted that they got one or multiple of the reverse proof (someone posted they got 4) and those were just the people that posted. I don't have the data from the buyer's clubs, but I bet they got a bunch of coins.
And then on top of that, all the usual coin companies were trying to recruit buyers as well.
Just some food for thought.
Successful transactions with: wondercoin, Tetromibi, PerryHall, PlatinumDuck, JohnMaben/Pegasus Coin & Jewelry, CoinFlip, and coinlieutenant.
Interesting thoughts
Successful transactions with : MICHAELDIXON, Manorcourtman, Bochiman, bolivarshagnasty, AUandAG, onlyroosies, chumley, Weiss, jdimmick, BAJJERFAN, gene1978, TJM965, Smittys, GRANDAM, JTHawaii, mainejoe, softparade, derryb, Ricko
Bad transactions with : nobody to date
I would say the mint did damage to the silver eagle market with this issue, more so then they did good.
If you want a issue a limit issue coin, then offer the coin for sale for a specific period of time, say 1 week, 24 hours or something like that. This way everybody has a fair chance to get the specific coin.
I may be in the minority here, but the ability of resellers to flip a coin for a big profit should not be a legitimate concern of the Mint.
The concern for the mint would be the anger that issue generates from the collector base they require to exist.
If they had 99,000 people online at noon to buy said coin and possibly 30,000 got it, that leaves 69,000 people not happy. Not a good ratio of happy to unhappy customers.
Of those 99,000, how many were flippers and how many were collectors? I'm guessing 60/40 in favor of flippers. Most of that 60% bought a lottery ticket, some won, some lost, but I doubt they are too upset about it. The 40% who are collectors are probably the ones most annoyed by not getting one.
If they had advertised that they would make as many coins as there were orders for, there wouldn't have been 99,000 people online at noon. If there are more people who want the coin than are being minted, some people are going to be disappointed no matter how the coins are distributed.
I agree that this is really not the mints fault. There are more people out there that wants to make a quick buck than there are collectors. The mint can't control that. But being in the group of collectors that was unable to get one, I do see the mint losing money on future issues of any mint products, especially when most products depreciate after issue and can be had cheaper at a later date.
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Just to clarify, I am not blaming the mint. All I did was provide some context from my cross interactions across 2 separate communities.
Successful transactions with: wondercoin, Tetromibi, PerryHall, PlatinumDuck, JohnMaben/Pegasus Coin & Jewelry, CoinFlip, and coinlieutenant.
I take it you didn't get one either
So a different way to think about it might be ... what is (or should be?) the mission of the mint, and how should they best carry it out?
Maybe my first post was off base... just trying to look at the "problem" objectively. It feels wrong that resellers make a huge profit and a lot of collectors get shut out.
I am interested in ideas from the community here about what (if anything) could be done differently.
I would say that the very least would be to have a website that doesnt crash, but actually a fast website might only benefit those with bots, scripts, super fast connections and computers... maybe even more regular collectors would lose out.
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According to Wikipedia, in 2018 the mint contributed a $273 million profit to the treasury, which is 0.006% of the $4.11 trillion that the government spent that year. Are the continued existence of those profits a make-or-break feature of any decisions that get made regarding what the mint produces?
I hope they do this again. I go all the way to final review and then was frozen out. Whilst I kept hitting refresh, for 17 minutes until the site informed me that my bag was empty, and it was no longer available, I went an bought some stock, and sold it today for a profit that will buy a stack of those eagles.
However, any desire to have one has passed by, so the family will have a most excellent Christmas.
There is a solution to this. Don’t bother with this stuff. I don’t because the fun has gone out of it.
The only reason so many people wanted this particular coin is because it was a small mintage. If it were minted as unlimited, there would be a lot less interest. Many bought this coin with hopes to sell it for a huge profit to a collector that got shut out. How many that bought this has the Pride of Two Nations RP ASE? How many that bought this are planning on keeping it in their collection? And how many bought it just to sell? The mint didn't do anything wrong, they may not be able to handle wild demand as efficiently as we'd like, but they put the best possible limit on the coin and released it on schedule. They do not sell to any specific group- collectors only or flippers only- they did want to spark interest in buyers, and that was successful.
Its also about demand. Look at the Canadian Mint - they often have coins with a mintage of 300 that go unsold. If just being a low mintage item was the key, they should sell out in seconds.
edited to add: Just checked out www.mint.ca and there are a dozen coins with mintages under 10k that are still for sale.
I thought about a lottery myself over the past few days. People who have done business with the Mint are in the lottery, or as least have an account set up. The Mint randomly picks 30,000 email addresses/accounts and then emails invitations to buy. What do you guys think?
Might be better if the mint set up a sign up 30 days out, then randomly picks from that sign up list. There are just too many inactive and duplicate mint accounts for them to draw just from that.
A lot of deep philosophy for a simple mint gimmick to boost demand for a low supply offering.
I think they were wildly successful in that effort (I initially did not get why anyone really cared). I don’t think this will alienate any collectors and I think they will be even more determined to get in on the action next time.
Again, that misses the goal. Such a sale would NOT be a limited issue. If they simply put this coin on sale for 1 hour, they would have had over 100,000 sales. That would not have created the hype they wanted.
I think you'd see exactly the same number of complaints that you have today. After all, bots can create accounts as easily as order anything. EVERYONE who bought a coin had a legitimate account, so you would have frozen out just as many people. Possibly more. If you know there's going to be a lottery and tickets (Mint accounts) are free, you would have a huge proliferation of accounts so that people would be in line. You could limit it to people who have prior purchases, but then you miss the opportunity to expand your customer base.
The only thing you would have done is let people who weren't online at noon have a chance to get the coin.
I don't know. Last Thursday was pretty exciting!
I'm not sure how it would be possible to come up with a system that would make everybody happy when there are not enough coins to go around. A lot of the "make things more fair" suggestions seem to me to be "make it easier for me to get one" ideas. Which would necessarily mean that someone else who would have gotten one, wouldn't.
Not directed at any specific poster, of course.
sell 30,0000
1,000 per day for 30 days or 500 per day for 60 days.
How could the mint ever be expected to discern the intent of buyers, in order to limit access to resellers? Perhaps the coins were distributed as broadly and fairly as possible- what is the evidence they weren't?
Yea, if making money from “mint instant rarities” is your goal, but I am at a different time in my collecting life. I spent a lot of money to come to Baltimore to find Roman emperors, Civil War era Indian Cents and some British coin up-grades, not to stand on line to buy a coin for a profit that would not have covered my travel costs.
How about this: The Mint should stop advertising the mintage. This would require changes to enabling legislation, but presumably serious collectors would identify the coins they truly wanted to collect, get in early and have a good chance at getting the coins they wanted. The Mint would need to have occasional low mintages to keep it interesting. This would seriously discourage speculators, aggregators, friends, neighbors and bots because they could never be sure if there was a high likelihood of a quick flip. But that’s the point, right?
Do like the Oscars: make the recipient sign a legal contract that they can never sell the coin set. It must be returned to the Mint when the "collector" is done with it.
It's just sour grapes. 95% of collectors are flippers with a different time line.
Not so much the money-making side of it. It was the challenge of even acquiring the coin, no matter what you were going to do with it.
There was also weeks of build up as we discussed the coins, speculated on value, etc.
It was an EVENT! [For those that wanted to participate, of course]
Well, there is that.
I came very close to getting one but didn't.
No sour grapes here. Slow internet and no luck sums it up.
This was the first coin that I intended to flip. If successful I was going to put it right back into some type coin that is otherwise out of my reach.
I do feel for those who were also unsuccessful and who also collect this series. Now they have a decision to make. Live with a hole in their collection or shell out 15x what they sold for.
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I don’t need the foolishness. I had to pay the profit made on this coin, if I stood in line to buy one, to come to Baltimore to find four of the five Roman emperors I came to the show to find. I could have found the coins I wanted, or I could have stood in two or more lines. Most of the modern mint products are turn-offs. I am down the silver Proof set each year. I kept up with the modern commemorative coins for years, but no more.
I don't think others expect you to want the same things out of the hobby that they do. That said- there's no need to dismiss the excitement others feel for the things they collect.
Right?
They are not collecting these things. They are flipping them, perhaps to get money to buy the pieces they really enjoy. Why do you want me to be on your side or agree with you?
Thank God you started a new thread on the subject.
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Lol sorry. I thought maybe we could channel the rustling into something productive.
Maybe it is what it is and we all just need to start studying up on scripting for the virtual arms race to order faster on the next big release.
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Some people are flipping them. So what? From reading on this message board, you can see others do collect them. You said yourself that you went to Baltimore to find four of the five Roman emperors somebody else was flipping. How is that any different?
You don't want people to be excited about the things they choose to collect and would prefer to put them down by calling such interest "foolishness"? Ok then.
They did that. See the 2012 SF ASE and 2013 WP ASE sets, in response to the complaints about the 2011 25th anniversary sets.
Comments after those sold?
The minted too many. Not worth it.
Damned if you do, and damned if you don't.
No. The Mint Store is not tasked to make a profit. They are only tasked not to produce a net loss.
Remember, this is the GOVERNMENT, not private enterprise. Totally different animals.
How in the world would not mentioning a mintage have stopped this?
An issue like this would still have sold out in 15 minutes, and you'd be getting the same responses...
BTW, there was no "enabling legislation". This was a Ryder Special. If anyone wants to blame anyone for this, they should go directly to him...
Yep. I don't go into threads of coins I don't collect and dump on it, but there are others who just can't help themselves.
And they all know who they are.
I tried and failed to get one. However, it is a fair system. First come, first served. There will always be unhappy people after an issue like this.
I see several problems with this whole conversation.
In my opinion the mint really messed this one up. If they had intended for collectors to buy these they would have increased the mintage. If due to the difficulty in minting this coin it had to limit the offering to X amount. In that case they could have offered an official order form and that would go out to their mailing list, each coupon for purchase could have a scratch off area which would have a unique code on each one that could only be used one time for those wanting to order by mail, phone or Internet. Once the code was used it would be invalid, limit one code per household. Mail in coupons would have a date certain they had to be mailed by.
The mint could take then limit sales to X amount per method. If someone entered more than once, or more than one order by credit card all orders associated with either one would be invalidated. This would cut down on the number of cheaters.
Now, the problem with discussion of the matter here, first PCGS, the sponsor here is in business to make money. They want dealers to send in as many of these at one time as possible for grading and encapsulation. There was a time not that long ago that if a collector wanted to submit a coin they had to do so through a dealer. They have since taken submissions from registered collectors with certain restrictions.
As long as dealers and collector's are forced to compete for a product it seems the conflict will continue.
The mint has increasingly broadened it offerings to the point that is unreal to expect collector's to buy there product, and they have done this for years, Starting with State Quarter's, producing more coins than the banks could handle, let alone expect the banks to also distribute Presidential Dollars, ATB Quarter's, Sac Dollars and now for distribution only for collector's the Innovation Dollars. Way to much junk for dealers to handle or collector's to tie up money in.
Dealers have at it. Collector's good luck. For as long as the Mint forgets one group or another, or pits them against each other there will be discontent, and sales in other areas will suffer.
Personally I gave up the idea of collecting the Innovation Dollars over this, for there is little doubt this will happen with that series also.
As long as dealers and collector's use the same forum here there will be vastly differing views on the subject.
JMHO
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This is very long, but I should point out the fallacies:
EVERY account and associated addresses is on the mailing list. So your "coupon" doesn't change much of anything.
DEALERS ARE NOT THE PROBLEM. All those eBay flippers are not "dealers". The bot farms are not "dealers". The speculators which includes collectors and non-collectors are the issue.
The MINT WANTED IT TO WORK EXACTLY THIS WAY. They wanted the HYPE. They wanted the EXCITEMENT.
As far as the coupon idea goes for getting a code out there to use it could go out in magazines, it could be the mint website, whatever method to get individual codes sent out.
I mention dealers so let me clarify, Collector's Vs Everyone (or everything) trying to aquire one who is buying it just to make the quick buck.
As for the Hype it creates you can look at it as the mint trying to stir up excitement, I don't see it that way at all, I believe it is terrible PR for the Mint. The idea that any loyal purchaser of Silver Eagles who had hoped to complete a set (me for one) will want to pay the price for one of these on eBay is not going to happen.
As for comparison of the 95-W and the 19-S ERAPE the 95 was available for a while, you just had to buy a bunch of gold if I remember correctly.
I know you offered $500 long before these came up for sale, and I have no problem with you doing that, you want to be able to make money yourself and as a Collector I like it when I add something to my collection that increases in value, but the way the mint handled this was wrong, it was not prepared to handle the web traffic which crashed certain servers.
I would be interested in seeing just what traffic was making it through. I used two different services, Verizon and Comcast, one by phone the other by tablet both were ineffective once sales opened.
My point, along with several others here is the Mint screwed this up royally if they intended for collectors have even a chance at these, there was a better way of doing this.
It also seems strange that there is
yet another thread about this,
Fighting the Fight for 11 Years with the big "C" - Never Ever Give Up!
Member PCGS Open Forum board 2002 - 2006 (closed end of 2006) Current board since 2006 Successful trades with many members, over the past two decades, never a bad deal.
To keep this interesting, this is what I spent the money on that I had set aside for this Eagle.
An 1882 O/O VAM 7 I didn't know it was a vam until it showed up! I guess sometimes you win after all...
Fighting the Fight for 11 Years with the big "C" - Never Ever Give Up!
Member PCGS Open Forum board 2002 - 2006 (closed end of 2006) Current board since 2006 Successful trades with many members, over the past two decades, never a bad deal.
If I were maintaining a set of American Silver Eagles (ASE), I would be losing my patience. These coins seem to be popular with many collectors who are on a budget, and for the most part, those collectors can keep up with them. Yet every once and a while, the mint comes up with another one of these “ringers” that are issued at a reasonable price but end up subjecting these collectors to a huge mark-up courtesy of “the flippers.”
To buy this one, you had to jump through hoops at the Baltimore coin show or get lucky on the Internet via the mint’s ordering which never seems to work when there is a crush of orders. It’s a shame that there can’t be an equitable distribution system.
As I wrote before, I am not a fan of “limited editions.” Those who want these coins should be able to buy them at the source at the issue price. Perhaps the solution is to sell all the coins people who want them, limiting the number per household for a period, for like a month. The “flipper opportunity “ would come from backorders and the wait to receive the coins.
At any rate, if this issue is like most modern coins, the prices will start high and gradually drift lower as these coins end up in everyone’s rear view mirrors. Remember the 1995-W ASE, 1999 silver Proof set and for those of us who have been into this for a long time, the 1960 Proof small date cent? That coin sold for $50 or more in the 1960s when $50 could be half a week’s wages. Now it’s on the Graysheet for $20 in Proof 67, Red.
I wonder if the MInt has the ability to strike classic period coins that would be indistinguishable from the genuine article? If they could, say, strike a few million early date gold coins that are identical to the originals, then everyone who wants one could have one.
When the apollo coins came out this year the pucks were backordered within the first few minutes, but backorder doesnt mean sold out. The entire issue was not available on day 1. I think this really depressed the resale market as anyone who still wanted one just had to wait, there was no urgency. So maybe this is the way to do it - take ALL orders, fulfill some on day one, fill the rest on a production schedule.
Although for a limited item it may still not quell the 2ndary market demand.
I think the risk of continuing business as usual is that in the future only cleverly coded bots will be fast enough to get coins from a limited release. (If they fix the website to handle all traffic then only the fastest orders get through). Regardless if you are a collector, dealer, or anything else, this technology advantage doesnt seem fair.
Maybe the solution to the bot problem is for the mint website to have its own! In other words, 1 click ordering, such that you only need to set up your account and choose the product ahead of time, then click "buy it!" When the countdown clock hits zero.
Seems more fair than 1 person fumbling with CC entry problems while another person has a direct checkout script.
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