Vest pocket and small dealers, how have you adapted to current realities?
logger7
Posts: 8,590 ✭✭✭✭✭
I'm curious how the smaller dealers who go to shops and shows, buy coins raw they probably have to get certified to sell have adapted in the last few years?
Grading has gone up and is slower at PCGS and NGC even for economy tiers. Money is tied up for longer. If you try to go the raw coin sales route on ebay, you probably are not going to get near MS65 money for uncertified coins, or can you?
1
Comments
I suspect for lots of smaller sellers, there is no "current reality" to adapt to as the situation today is not much different from the past. On eBay, slabbed coins make up about 20% of current US listings and 10% of world coin listings. The time required to get coins graded is irrelevant for an overwhelming majority of coins offered for sale there.
I sell world coins valued mostly under $100, slabbing these would be silly unless you're playing the "Top Pop" game, and I'm not. As far as sale prices go, I don't have trouble selling choice/gem uncirculated coins for current catalog values and often have sales that go for up to double catalog.
Agree. 90% of my business is raw.
I can see how that would work with top quality photography and a specialty niche of world coins.
But with coins where MS64 coins go for under half of MS65 coins and a lot more in 66 and 67, you have to get the coins graded.
A couple CT dealers I know for examples. "Zypies" on ebay sends most of his coins into Anacs, month and a half turn around time. Certification is under $10 usually, shipping does not add more than a buck or two per coin. "Father-time-coin" in Guilford has 4-5 full time employees. They literally list every coin worth $5 or more raw on ebay; only the most valuable coins get certified at PCGS.
The problem with small sellers I have heard from is that the round trip on certification as needed ties up a lot of funds for a long time now. So you have to have more working capital and the profits take longer to be realized.
I'm not sure any of the things you said apply differently to full time dealers, small dealers, vest pocket, etc.
Vest pockets have limited capital to work with; full time dealers such as one I know can get a low interest Wells Fargo loan if he needs to buy say a $50K deal. Some of the small dealers have under $10K to work with so the long turn arounds on grading limit free capital to buy.
If the deal of a lifetime came along, I could round up $50k without taking out a loan. Anybody working with less than $10k is in the "hobby seller" range, IMO.
And so as to not be thought to be insulting anyone, I consider myself to be in the "hobby seller" category.
Vest pocket dealers do not necessarily have limited capital. That's not what makes them best pocket dealers. And full time dealers do not necessarily have deep pockets. The distinction is the way they do business not the depths of their pockets.
Unless ANACS slabbed coins sell for similar prices as PCGS slabbed coins, saving $10 or $20 by using ANACS seems to be a kind of "penny wise, pound foolish" approach.
Current market conditions remind me of period before 89 crash. When they putting in nuclear bids I move to something else.
While I have an inventory of slabbed coins and graded currency -
I sell many raw collector coins at shows plus online in the $1 to $100 dollar range. Simply markup accordingly. Ditto with currency. Online material minimum $20 and over. Smaller than $20 for shows. These are acquired from various sources and marked up accordingly. No intent to slab these of course just make decent markup. Many coming in bourse room doing good have $100 on them. I do have graded notes and coins at a budget quantity / plan total investment amount. Not a buyer if they not selling. No interest in investing over plan. If can’t buy it right, no interest. Not a player in the holder / sticker game. Mainly been submitting banknotes to PCGS Currency Grading. Possibly some coin submissions to them (quality world coin pickups) later.
It doesn’t take some six figure amount to be in the business. Even if their investment less than $10K. As long as one has fun, makes some money that’s all that’s needed.
One just has to work their own angle
I only sell PCGS coins with about 80% being CAC. My show sales are very strong with high demand in the $200 to $500 range.
If you keep on submitting, you will have a constant flow of submission returning. So it hasn’t really bothered me that much at all.
NGC was still turning around bulk subs in 3-4 weeks so I would load up on dollars while I waited for econ/standard subs of PCGS material. I also leaned more on the CAC game and just knowing my niche. Raw coins were a final expansion for me and were about 35% of my final months sales by $ volume. I always was more of a slab guy than a raw guy.
"It's like God, Family, Country, except Sticker, Plastic, Coin."
99% of the coins I buy raw get sold raw. 99.99999% of the slabbed coins I buy stay slabbed. Including details coins. Some dealers make a good living playing the buy raw or crack out game and send in to get graded. Lots of us are content with buying what we feel we can mark up and sell for a profit without the extra work.
Even with coins I buy that I believe will CAC. I hold on to them for a while then most of the time decide to just sell without the round trip for a sticker. Most of the time the coins sell at a premium anyway.
My Ebay Store
Raw coins and currency are a major profit maker for me at shows and to an extent online. Once you get into more expensive graded material margins can decrease along with buyers who have the money. Worse yet you could have price competition from other dealers if say Classic US. Coins. Hence my move to quality graded World both coins & currency. I have many top pop & single digit pop issues in those areas.
At a show I may pickup a few Classic US at bid or my offer pct CPG. Could be walkup sellers or a go to contact. Key is buy right.
If you present your raw coins accurately and don't call sliders much higher grades than is warranted, then more power to you, unfortunately I have seen too many sellers fishing for suckers on raw coins assuming no responsibility for what they are selling.
And yet the vast majority of the coin market remains raw...
I can't even justify a submission to Anacs or ICG of many raw Morgans, ccs or nice Uncs; there just is not enough upside to justify the $15/coin plus shipping and wait.
Yes, the fees on many submissions are cost prohibitive. Forget US coins, try slabbing a token now at $65/ea! Used to be based on the value, and you could submit under economy, but now PCGS requires them to be submitted under "special issues." It's a shame and i have to believe this sends the vast majority of exonumia to their competitors. I mean, who is slabbing a $100 piece for what will turn out to be a $100+ submission with shipping and handling?! 😠
And the wait times are now currently wholly unacceptable. Tying up inventory for 1-3 months?
Raw is just the way it has to be these days unless you buy a piece already slabbed.
Dead Cat Waltz Exonumia
"Coin collecting for outcasts..."
The market has shifted for what I sell. All of my clients want their coins to be certified.
I am now at 100% TPG coins in my inventory.
The only raw coins that I buy are coins that I plan on submitting to a TPG.
I am sitting on about 26 raw coins at the moment, I will ship them out for certification this week.
Interesting read for a collector, not dealer. My major concern is with getting stuck with a fake, and to a lesser extent, an over graded coin. Consequently, I am very careful when buying raw, and tend to stick with slabs. I don't buy super expensive coins, generally less than $500.00. Haven"t been burned yet on a raw coin (that I am aware of). I recently went to a coin club and the speaker had about 75 fake Morgans, many of which I would not have thought were fake. Some were even moderately scarce circulated examples , which if real would have brought $100-$150 or more. It is so easy to claim the coin offered for sale is a grade or three above what it really is, particularly on Ebay.
On raw coins I don’t use numerical grading. Examples: G, VG, Fine, VF, XF, AU, UNC, BU, CH BU, Gem BU. Many are World.
Just keep it accurate and simple. I know how to grade, graduate of an ANA grading course, and been in biz since 1990. Plus several grading books if something borderline.
I have a collector coin album for shows (plus list ones over $20 online) where in 2x2 with 20 to a page. Coins under $100 MV mainly $1 to $60 range unless have some raw AGE. Many coming in bourse room doing good have $100 in their pocket.
While I have graded coins & currency I enjoy working with the raw budget material too. Recently at a local show bought some PCGS slabs at bid from a good friend setup. Then noticed a BU roll of Mexico 20th century silver Pesos really flashy. I bought it even put some in 2x2 for my collector coin book during slow periods some of them even sold as show went on. It all ads up.
Just work your angle and have fun.