Covid has made me rethink my business model. What are your thoughts on my rationale and choice?
amwldcoin
Posts: 11,269 ✭✭✭✭✭
I recently completely changed my business model. I cancelled every show I do except for the FUN winter show and the 2 Dalton, Ga. shows. This pandemic is destroying the coin show scene, not that it wasn't dying before except for the wholesalers.
This has taught many collectors to become more savvy about buying coins online. I have quite a few good customers I have been trying for several years to get them to look at my stuff online. They were always, no...I want to see the coin 1st. 90% are now buying from my pictures and are happy with the results. The bottom line is it's saving us both money!
I think this mentality might be here to stay with the majority now that many collectors have been forced to buy elsewhere other than shows, alias online.
My plan is to go to shows to buy except for the 3 I mentioned above. The only thing that has justified the expenses of me setting up at shows has been buying. On top of that, very little of what I have been buying has been across the table. It's ridiculous for me to spend well over 5 figures a year doing shows when I can accomplish the same in a much more relaxed fashion for a few thousand a year.
As far as the lost sales from shows. It actually cost me more to sell coins at shows than it does on ebay, even at what I consider a show with strong sales! The costs of doing shows has only gone up and up while sales have gone down and down over the past few years. I've been doing shows for 25 years now. Up until a few years ago I used to do close to 50 shows a year! These last few years are the worst I have seen in 25 years as far as trying to make a reasonable profit at shows. I've seen slow times over 2 periods in the last 25 years before this recent slow down. Neither was as bad as these past few years. If it hadn't been for online sales I would have probably just went into full retirement mode!
I would love to hear everyone else's thoughts and feelings about my thoughts, choice, and the coin business.
Comments
I think you're smart to do what you need to do in order to keep doing a good business. I have a hunch (mostly based on my own hopes and also what I'd like to do) that when COVID is no longer a concern, traffic and spending at shows will see a nice bump (at least temporarily). Online sales forced people like me who never liked online buying to get comfortable with it, but I will rush back to shows when I can hold coins before my money is spent. Focusing on online sales and the shows that are of most benefit to you sounds like a wise move.
I think you are correct
I think coin collecting is also about the personal interaction with other people who enjoy the hobby and I do miss that. You can't get that online in my opinion. I, for one, will be going to shows as soon as this craziness goes away with a whole bunch of stuff to buy and sell.
Add an E = rationale to your title. Unless you meant to proclaim your rational choice 😊
Certainly makes sense as you adjust to business cost realities. It’s adapt or die a slow death. This virus situation is going to take awhile to resolve.
The Catbert spellcheck has been applied!
Your online photos are good and intelligent decisions can be made on purchasing a coin from the photos. Some dealer photos are bad and some are terrible. Some of those dealers will not survive.
I have attended over 300 shows since 1970 and will continue to go to them. I think that there is nothing like looking at a coin in hand. Hope to see you at Dalton.
I only sell coins online through eBay, so not having shows doesn't affect me there. Where it is an issue is that I get the coins I buy for resale at shows and they're the kind of coins (price level wise) that dealers don't post on their websites. I need to look at the coins in person in order to make a decision as to whether or not it's something I can use.
Sounds good to me, so long as your photos are accurate.
I agree with @hchcoin about personal interactions - but, you can get some of that over the phone, email, etc.
My current "Box of 20"
I think you’re spot on. Shows have been slowly fading away anyway, long before COVID-19. It’s a bummer, but it is what it is. As others have said, nothing beats holding a coin in your hands, but high resolution realistic images are the next best thing.
Good luck!
Dave
You/we may have to adapt.
We have a lot of conversations going on in Academia over whether Covid has forever changed education. Time will tell. There are, however, reasons to believe that, in perfectly Darwinian fashion, the crisis has sped up evolution.
The same could be true of other parts of the economy including "shows". They have slowly been evolving since the advent of the internet and eBay. This might be an accelerant for that change.
I had the same thought. It could be a good business decision to set up when shows start coming back as those first few could be very good with much pent up demand. Afterwards I think it will return to the lag experienced the past few years.
Where in the value chain will the massive dealer overhead savings go for avoiding the expenses of coin shows?
Collectors benefiting from lower price? Increased dealer expenses to acquire coins via different channels, dealer margins expand, something else?
Latin American Collection
Most likely. People talk about dealers improving their websites with high quality images, which is all well and good but when the coins I'm looking for are typically priced under $50, that's just not going to happen. I need to talk to the dealers I've done the most business with to see if some sort of "on approval" deal can be worked out. I'm sure the kind of coins I buy from them are still accumulating in their inventory and they'll need to do something with them if they can't take them to shows for now.
Since 1989 post crash the coin market been tough almost constant downward slide like a plane losing altitude. It’s amazing it hasn’t hit the sea yet and sunk out of sight.
Online profitability has beaten shows for sometime for me. My future outlook is cut down setup at shows table fees too high vs good retail buyers coming in bourse room. Most shows recently lost money - slow retail / nothing of quality available from public. Brutal competition from wholesalers killed a lot of it too. I focus on stuff they may not have. I have made good money in world coins and currency. I have gotten some good pickoffs from online (non bay) auction houses (slabbed world) that made good money on. Fair prices to buyers but fantastic pickoffs. Other potential bidders asleep or ran out of money. Some huge breakaway plays.
It’s tough make money on most US coins. Money been wrung out of them. You need upward market momentum make that happen. Play sticker game - no they blowing in wind w me on that one unless really PQ and can pickup at sane price. I will pay more on coin that meets my taste for PQ if it’s something can buy right and promising flight path for retail profit. I like your nice Barbers that seems like an exciting area.
While I have around 100 graded banknotes US and world have about 50 more want get graded put money in that instead of table fees. Low single / double digit pop stuff excites me especially if cheaper than what some generic MS65 Morgan dollar goes for (tens of thousands pop of these dates) - upside / nada. Graded WPM new frontier (see article in recent PCGS market report).
Your on the right track good strategy cut down on shows and see being buyer off bourse works. If you have setup you have some good go to contacts. I don’t believe some magic cash flow of money will hit shows lol. Many still jobless due to covid and 1 in 6 going hungry. Like the fallout from the Houston Oil Price crash a lower quality of life the new reality. Many my contacts bankruptcy / cc default as careers dealt a damaging or fatal blow after oil crash. From Oil Price experience - Post covid (if we ever get there) outlook not good.
Many posters here like deer in the headlights have no clue what it takes make it in the coin business. Not their fault never got bourse room experience or sat down with the facts and did the math. Reminds me of some of my accounting students (when teaching at local community college) not understanding my expectation on Journal Entry problem if it’s not right acct, right direction (dr or cr), and right amount that is ALL Three must be correct or else it s wrong (no partial credit).
How spend Show expense savings are u kidding lol - that’s for me numero uno - increase inventory, pick up some more early 20th Century Mexican 50 Peso gold and Cabalito Pesos plus get some more items graded, write book (about coin dealing) to sell online, and save travel stress always looking over shoulder. Possibly a book about Mexico 19th century coins (so scarce, undervalued vs US).
Once initial non-Ebay buyers are exposed to a positive initial experience and see the convenience of it, they may stay with the concept. Realizing how easy it can be. Sure, some may want to return to the personal experience and return to in person commerce. But that may be a bit harder to do once they have an alternative choice to fall back on. Sharp photos and correct listed info. is a must. I like your decision.
On approval will cost you more than buying the entire deal. Cheapest way to acquire inventory is to buy the entire grouping. [Which is why I have boxes of crap lying around. LOL.] If you want to pick through inventory, any dealer is going to want a higher percentage of retail because they know you are cherry-picking. If you take the good with the bad, you get the best price.
I think this is true. And it doesn't have to be 100% to continue the slide. If show attendance drops 20%, it becomes more unprofitable for the dealers to set up. Table fees and hotel fees and dinner costs keep increasing but your show revenue keeps dropping. At some point, the model collapses.
Think Blockbuster. Blockbuster didn't disappear when there were no video renters remaining. There are still people that use Red Box. Blockbuster disappeared when the volume of renters dropped low enough to make it unprofitable.
Yeah, I know. I have tons of stuff from doing it "the entire deal" way myself. But if I'm at the show, the dealer tells me "20% off anything from this box." Don't need to buy the whole box to get the discount.
Yes, but that's the antique coin show model. LOL.
Photographing your own coins will educate you on what your seeing offered online. Over time, you will then be able to properly read the visual data on listings and build confidence in your online purchases.
Coin shows can be fun at times but have several annoyances too. I enjoy attending as a treat to myself, but the travel expenses eat up my collecting allowance pretty fast. I’d much rather buy a nice coin or two online and go motorcycling or keep the house up while I wait for coins in the mail. Probably a better use of my time than sitting parked reading my phone for hours on a layover. Still, now that we can’t do shows I want to go more than ever! Gun show, coin show, car show, I’m missing all of the shows. I know they’re a big part of learning and all but I’m in full tilt family and carrier mode, maybe when my responsibilities taper off and I’m looking to spice up idle time I’ll feel differently. Regarding the pandemic situation, were powerless and personally accepting that is my strategy for now, one day at a time. Hang tough and make adjustments when possible.
Yeah, I know. So what happens to all those coins that aren't worth taking quality, high resolution pictures including video and color commentary with historical writeups on an engaging and easy to use website? Cause that stuff costs money. And lots of coins don't generate enough profits to justify featuring (or even including) them on those wonderous websites.
There will certainly be a developing trend in this direction. It started well before COVID too.
Excellent coin photography will be absolutely mandatory if you're going to stay relevant in the new market. For lower-priced items, you'll have to figure out a way to either do descriptions or quick photos, ship, deal with returns, and not loose inventory that is still profitable.
Seems to me that there's likely to be a healthy market for inventory control software that will interface with current pricing guides, link photos & descriptions, track grading submissions, generate automatic auction listings, populate a stellar website, generate mailing labels, track shipments, and keep good accounting & tax records. If you acquire a coin, easily and quickly generate some nice photos, enter a quick description, and then not think about it again until a customer inquires about it or a sale is made on the website...... that makes it pretty easy.
Pieces and parts of this already exist, but I don't think anyone has created the whole package yet.
That's where I think the bigger guys will wholesale to guys like me who don't mind selling a little junk along the way.
Haven't got all night to read everyone's input but if I were you I'd have an E-Bay presence along with you're own web presence where the same inventory is discounted to reflect savings not paid to E-Bay.
Similarly, you may want to take deposits on credit cards or check/cash with lesser known customers where you can ship them a few coins to select from rather than just a single coin.
Since you don't have much face to face perhaps a newsletter?
Everything I read from certain dealers say they are surprised at how good online business is right now. HLRC, David Kahn, CRO, NN, west coast coins, etc are doing fine. So clearly it’s working great for some.
I just wonder how they replenish inventory (beyond auctions)
I wouldn't recommend running an approval service. All that does is remove inventory from sale that isn't actually sold.
I think you're right.
I'll miss seeing you and yours at the shows though, Darrell.
And more generally: I'll miss the shows for the wonderful camaraderie and long-term friendships that face-to-face schmoozing, talking coins and then whatever, have afforded me over the years. I understand online business models are largely inevitable, but still....
Here's a warning parable for coin collectors...
There are dealer networks.
Creating and maintaining a website has costs, too. Compared to eBay fees? Can't say for sure.
Maybe I'll just have to stick to the local shops for a while. Might as well leave some stuff for the other guys.
Late to the show........ amwldcoin - While your new buisness model makes sense, here is my collector perspective. First, going to something like FUN or ANA, it is the human interaction that is equal to the viewing coins. As we are learning this semester for teaching, humans yearn human interaction, online just can't compete with that - we need to be face to face to make it work best. Second, 99% of coin images from dealers online don't tell the story. The only way I can buy online is if there is a bean on the plastic, then I know that it has passed a standard that I have learned to understand. So buying online carries great risk compared to seeing in hand. So I still want the shows and dealers like you to deal at shows and to interact with face to face. Let's just get through this Covid and see what happens.
Best, SH
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I'm still going to keep doing the FUN show, which is the only place I've been able to see you the last few years!
Read the post above!
Addressing what to do with the cheap widgets. I've been quite successful making related groups. My target range is a minimum of $25.00 which seems to work well. I guess the only downside to the cheap stuff for me is when I'm having a slow day and have to make a trip to the Post Office for something that costs $25.00. Since my 1st internet sale in 1998 I have always hand delivered to the Post Office and get a receipt. That's just 1 step out of the delivery process that speeds up deliveries and reduces the risks a little.
I find this thread very interesting. Being a collector (not a dealer), I always enjoyed shows. Got to see a lot of coins, learn some things, meet people, buy a 'treasure'. I always wondered how many coins a dealer had to sell to justify the cost of setting up. (Table fees, travel, lodging, food etc.) Of course, a B&M also has expenses. At the same time, I have watched the growth of online commerce. This also has costs and risks. There is no doubt that online business is the future - no doubt at all. (I watched J. Bezos go from nothing to 'everything') Those who accept this new reality will survive/succeed. Those who do not, will fade away. Just look at the coin business on Instagram. Cheers, RickO
I miss coin shows. In looking at demographics, it seems there are a lot of oldsters set in their ways...(and I put myself in this category and it is not meant to be nor am I using the term in a derogatory way)... that like seeing coins in hand before bidding or buying. Coin shows serve an important part of collecting... it is about exploring and personally observing what is available and the frequency certain coins/medals/tokens surface. Further and perhaps more importantly, a coin series may capture collector interest after it is visually seen in hand. Pictures are okay but they often fall well short of capturing the essence of what makes the coin special and the history behind it... not just in terms of just visually grading the coin, but appreciating the design and craftsmanship required to make the coin what it was intended to be.
Experience the World through Numismatics...it's more than you can imagine.
I think PCGS should appreciate this shift. There was a point and time in my dealing that I didn't give a rats ass if a coin was certified. Selling online caused me to shift to more certified coins!
My only change is that I have decided to go 100% certified coins.
Online buyers like the security of certified coins.
Blowing out or getting certified any raw coins left.
I like the new business model your proposing. Your still doing your buying but cutting out the costs of the table at the show. Overall I think youll see more profitability under the new model.
I’ll give you a few guesses. LOL.
I would not assume that eliminating coin shows would generate net savings. Probably just the opposite. In fact, most coin show dealers do the shows because they’re a cost efficient way of doing business.
Doggedly collecting coins of the Central American Republic.
Visit the Society of US Pattern Collectors at USPatterns.com.
Best to be safe. Does not take much. The machines in our shop are 25 to 50 feet apart. high roof many fans and major ventilation because of the machines. Entire plant fogged with disinfectant masks and all precautions. Only 18 people in a very large area. The Monday and Tuesday before Thanksgiving five people tested positive. We closed the rest of the week and fogged again. Monday and Tuesday two more people went out and nobody said anything. I discovered it when checking time clock report last night. This thing spreads faster than a California wild fire. Limit your exposer as much as possible until it blows over. I will be working from home for awhile now.
Everyone stay safe and do all you can to protect yourself and your family and remember: ( see below )
Imo, any good entrepreneur will will re-invent themselves if they need to
I think op business model a good fit for the modern online age. Shows can be a good place for him to buy providing he has good go to wholesale contacts at them. Then retail that material online. Works for me. Have retailed many coins bought from wholesaler at local shows who owns a swanky shop in another city. Would wager He’s probably flipping stuff walking in the shop way below bid. Just good ole smash mouth ball.
Do you sell coins online?
PS, This is looking like it will be the most profitable year I've had in the last few as my sales are up and expenses are way down! Probably gonna get hit with an estimated tax deficiency penalty.
Heritage recently moved into new headquarters near DFW..
Enormous space.
Twice this year they offered a free bourse set up for selected dealers and advanced collectors in conjunction with their coin auctions.
Stack Bowers in California just moved to new headquarters in southern California ...maybe they will do the same.
I could see this as possible public coin venues going forward.
I give away money. I collect money.
I don’t love money . I do love the Lord God.
I don’t. I’m more focused on buying than selling, and I like it that way. But if my only goal was maximizing profits, no doubt I’d be doing things differently.
Doggedly collecting coins of the Central American Republic.
Visit the Society of US Pattern Collectors at USPatterns.com.
COVID has accelerated many trends. Perhaps coin shows were in the sixth inning of decline and now in the bottom of the eighth. Movie theaters are probably now in the bottom of the ninth.
FWIW, when I was active, I attended lots of coin shows as a collector and really enjoyed the FUNs, the ANAs, the Central States (when they were a thing), a Baltimore, and even the local shows. That said, I rarely bought a coin of great consequence, and often I walked away with nothing (or made a regrettable purchase just to have something to show for the effort). I did benefit by seeing lots of coins and making in person dealer and collector contacts, which paid off in access to coins and in overall enjoyment of being engaged in the hobby.
"There are no called strikes in coin collecting."--
Henry David ThoreauRYKI suppose I meant that there is a gross reduction in expenses from a lack of coins shows, but those reductions are likely netted against added costs in acquiring coins outside of shows or just less volume overall. If coin shows are net more efficient than other means, margins contract or volume decreases. If less efficient, margins go up or prices come down. The reality is probably it is different for each dealer. Just something I was curious about.
Latin American Collection
If I were a dealer; I would most definitely have an online presence, which is much more important and effective, these days.
As far as shows go; I'd go mainly to wholesale buy and any selling that I did would be incidental and just extra frosting on the cake.
It sounds as though you have recognized this and have adapted rather well. I would keep it up, as it sounds like you're doing just fine.
I have often thought of becoming a dealer, once I retire from the corporate world.
Coins bring me much more happiness and enjoyment....If you love what you do, then you never work a day in your life.
“I may not believe in myself but I believe in what I’m doing” ~Jimmy Page~
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