Ethics Question
FlyingAl
Posts: 3,499 ✭✭✭✭✭
I recently had this idea but I wasn't sure how the overall numismatic community would view it, so I wanted to ask here.
As a YN, it's hard to find the means to buy expensive coins. I usually make up for this by cherrypicking, but since that takes a really long time and lots of effort, I was looking for a way to fill in those time gaps and make it easier for some picks.
Here's my idea - I go to a major coin dealer's site on Ebay for example, and find a coin that is an unattributed or unmarked variety. I would then message them with something like "Hey, I found a variety on your website that you don't have attributed. I would be willing to trade this information for a discount on a different coin of yours equal to 50% of the added value this variety will give you."
In short, I find a coin and attribute it for a dealer. In exchange, they will give me half of the value that my attribution added in credit towards a purchase on a different coin of theirs. I see it as a win-win-win because I'm happy, the dealer sells another coin, and they get some value added as well. I effectively sell the information and trade it for coins.
Is this ethical? Usually with cherrypicking you never contacted the seller so they don't know about the variety, so this step of adding a contact method could be seen as something that could ruffle some feathers. On the other hand, it could be seen as more ethical than cherrypicking as everyone gets something they want. I don't see anything wrong with it as the dealer can simply pass, but better safe than sorry!
Thanks!
Coin Photographer.
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I don’t really see how it would be considered unethical to do such a thing, but my intuition tells me that many dealers, upon receiving that message, will further scrutinize their inventory to find it themselves and leave you out in the cold. I’m interested to see what other members say.
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Personally, I don’t see that going well and would expect a lot of negative reactions.
Why not simply purchase the coin and flip it? If it needs to be attributed, crack it out and resubmit for attribution before resale.
It is certainly not unethical.... You are using your skills in trade for value. You win, the dealer wins. That being said, probably some will pass and scrutinize their inventory as @DeplorableDan mentioned above. Try it, nothing ventured, nothing gained. Let us know how it works out for you. I am impressed with your knowledge level, ambition and ingenuity. Cheers, RickO
I also do not see any issue ethically speaking, but I do not really think this will work very well for you with the majority of dealers on ebay.
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While it may not be unethical, I don't see this turning out well also.
The seller may view you as a scammer with something else up your sleeve. Take your time... purchase when you see an opportunity... flip it.
Perhaps your suggestion might work, AFTER you have a well established relationship with a certain seller. All I know is if someone approached me with such a deal; someone I have no idea who they are.... nope. And perhaps blocked. Way too many problems, issues in trying to do business on ebay nowadays.
You are making the assumption that your discovery of this attribute actually brings a higher price to the seller.
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Sounds like an interesting idea but intuitively speaking I don’t think it will work on eBay dealing with anonymous folks who you have no relationship with. I suspect a lot of eBay dealers would use the information to enrich themselves and you’ll get very little to show for your knowledge and work. I think buying such coins yourself and flipping them makes the most sense. If you’re short on cash find a financial backer and come up with a profit sharing formula.
I have no interest but I would be surprised if you were unable to find a forum member to work in conjunction with.
It's not really a question of ethics - when you cherrypick a variety, you are giving the coin more value based on the work you put into it. The work of cherrypicking is the time you put in learning the variety and the time you spend searching for it. The dealer didn't do that work (they didn't have the time, or it's not their thing), so you are not taking anything away from them by cherrypicking (at least online, where searching their inventory does not take up any of their time).
Better to cherrypick the coin yourself and flip it for the profit you've earned rather than gamble with your profit by sending an offer back to the dealer. In addition to the concerns that others have raised, here is another one - you never know what coins you'll want to purchase from that dealer in the future. If they begin scrutinizing all of your purchases because of an offer you made, you could lose out on coins in future that are even better than the one in question.
No ethical problems at all. The trick is approaching the dealers and not coming across as an extortionist.
If your backup plan is to just buy and flip you’ll also have to keep your identity somewhat hidden so RJ eye don’t just wait for you to attempt to buy the coin and then tell you it already sold and attribute it themselves without having to review their inventory.
I think most dealers already did this to their inventory. If they missed one, it’s probably not an important or valuable difference.
There’s certainly nothing unethical in what you’re proposing to do. However, my guess is that for various reasons, many/most sellers wouldn’t want to mess with it. Also, even in the case of those who might, you’d have no assurance that you’d end up with favorable future purchases from them, even with discount credits for your attributions.
As others have mentioned, it could be less complicated and more profitable for you to just buy any such coins from the sellers and flip them - the coins, not the sellers.😉
Mark Feld* of Heritage Auctions*Unless otherwise noted, my posts here represent my personal opinions.
Thanks all!
I think I'll stick to traditional cherrypicking. I appreciate the viewpoints!
Coin Photographer.
I like your idea and ingenuity. As others have said, I'm not sure how the dealers would react, though.
But here's an idea: start this up as a little business and maybe give it a name, or at least promote your own name, so that the project has an identity. No need to tell anyone you're a YN.
Maybe give away your free advice until you get a little reputation and then you would be in a better position to seek some compensation. (I'm not sure if 50% of increased retail value is the right number, since they might end up wholesaling or discounting it, but that number could be agreed upon later.)
Imagine a scenario where you have enough of a reputation that dealers seek you out to review their inventory for hidden gems.
Your idea is not unethical, but might be a thankless job at times. I recall the story from a forum member where they cherrypicked three or four valuable buffalo nickel varieties at a dealer's table at a show and they had hoped that once they told the dealer he'd cut them a deal on one of them. But, the dealer grabbed them back and didn't even thank him.
I wouldn’t want to be locked into a dealer’s inventory with such a credit even if the dealer is game for your services. As others have said, your better off cherry picking directly.
"Got a flaming heart, can't get my fill"
On the other hand, it will take a lot of the risk out of making a deal if the seller knows you can flip him.
While I admire the thought process, I don't think what you have suggested will produce the outcome you are seeking.
Simply put, I think you open up the doors for potential issues which will be problematic for you as a Numismatist. Please think about that in terms of both the positive and negative consequences.
If you are that confident in your numismatic abilities, you might consider seeking some investors that might be willing to finance your business plan going forward. I suspect that might have less downside over the long term.
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I've told a few dealers about unidentified or misidentified varieties before but they were typically dealers I already had a history with. It worked out well for me, although not necessarily as one might think. I can see how it might not always, though.
I really like your enthusiasm and your pretty knowledgeable.
Once you show which coin you have given most enough to research it themselves. I have noticed that there’s several folks who sell on eBay who already don’t like fees and might just think of this is one they can ignore with a little research.
Again, keep exercising your mind. It seems to be a good one and that’s a gift you can use for so many adventures.
I also am with those who have mentioned you don’t need to identify as a YN. Your posts would generally never indicate that. 👍🏼
🎶 shout shout, let it all out 🎶
Not only has he no need to identify himself as a YN, but also, he might consider adding a disclaimer that he’s not an extremely old one.😉
In all seriousness, I’m extremely impressed with and respectful of @FlyingAl, for his enthusiasm, dedication, thoroughness, open-mindedness and his courteousness. And I say that, regardless of his age.
Mark Feld* of Heritage Auctions*Unless otherwise noted, my posts here represent my personal opinions.
If you concentrate more on selling so that you can generate more funds then you can just buy those coins. It is a simple concept and easier said than done.
Good luck. I never found it to be a good idea to tell a seller that they've left money on the table. Just buy the coin and the seller will appreciate you for doing so. Keep your trap shut with respect to being a cherry picker.
Nothing unethical, but to avoid being shut out, I would try to focus on dealers I've made a few purchases from and then build a relationship before mentioning an arrangement like this. I'd start off with general conversation like I'm looking for this type of coin, I really like this coin you have - tell me about it, etc. After the dealer knows you and thinks you are intelligent and worth spending time with, you can bring it up. I might even do the first one free to see their reaction, like I found this and wanted you to know about it. Then finally, if they like you and find it valuable, you can try to build a relationship, and even pitch it kind of like a part-time job where you can paid in coin discounts.
I truly admire your ingenuity and enthusiasm
You [ I think] will succeed in any endeavor you choose.
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Cherry pick the cherry and ask the dealer what their best price is on the coin you want. If you can buy both, then do that and flip the coin you cherried to add to the coin fun-d.
If you really want to make money in the coin market, develop the skill of high end coin photography.
Agree 100%
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Nothing unethical about it but it might be hard to get the dealers to play along. I think you should buy the coin and flip it if you can handle it. If that is not a option then you can try to work something out with the dealer.
The approach is important.
How about
Dear dealer I was searching your inventory and noticed you 1913 nickel as only 3-1/2 legs you might get it reattributed and raise your the price.
Also I am interested in your coin listed for 55.00
Can you work with me a bit on the price.
Thanks
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Mom and Dad?
Why not get a job at a coin shop!!
Build your network, your grading skills and most importantly, get some deeper insight into the coin biz.
Good luck!!
Pm me with your location, city , stste and ill see if i can help!
While I don't see anything wrong or unethical with your idea in theory, I do foresee issues with its implementation.
The approach you use with the potential client/partner will be important, but if you don't know the seller already then they may have all sorts of red flags go off in their heads, as well. They might think you are attempting to scam them, to troll them, to hold information hostage or are simply being a wisea$$. That isn't your intent, of course, but the written word does not always come across the same way a person-to-person conversation would come across, either.
Additionally, some (perhaps many) sellers would not want to bother with becoming "partners" with someone if it means selling something that might have a slim or niche market. No doubt many cherries are liquid and carry a premium, but many others are (for the most part) more theoretical in nature as to value. So, if you pick a $500 coin in inventory and tell the seller it is "worth" $800, but after their additional work they get $600 then what kind of agreement or mechanism would be in place to make certain you got your cut and the dealer realized their premium?
There are several sticky points here. Your best bet, in my opinion, is simply to pick the coins off (even if you need a silent partner on your end) and move them on your own. Good luck!
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If I we a dealer I wouldn’t agree to it. If I give you a discount on a coin that will most likely mean I’m taking a loss and then what if that coin you attributed sits in my inventory another six months to a year?
Most dealers can give discounts on coins without taking a loss. That aside, under the scenario being proposed, the dealer would expect to make more on the extra value he obtains for his attributed coin than the amount of discount he’d be providing.
Mark Feld* of Heritage Auctions*Unless otherwise noted, my posts here represent my personal opinions.
I can see a dealer saying sure let’s get the attribution on the pcgs slab and once that’s happens I’ll work with you on the price of the expensive coin you want, and then pcgs neglects to but the variety on the label after 6 months of grading waiting.
I have told many sellers of non attibuted coins that I noticed on their sell list on ebay and they have never been anything but appreciative. The only, what I'll call negative, is the pair with no reply at all. I feel this is a great idea and cannot hurt. You do not know these dealers, they do not know you and it will give you a doorway into meeting them, even if they say no or do not reply. I would all but guarantee you they will look at their inventory item closely and if it increases their coin's value, then it will eventually be a positive. Go for it. Another avenue, is ask for a 3 to 6 month payment plan on the coin, especially if it has been in their inventory for a lengthy time. Also, you realize that the dealer keeps the coin while you pay. Make the offer of a penalty against what you have paid if the deal falls through. Just sayin'. Good luck.
Jim
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I've got a few thoughts, some of which will be repeats of what's above. First, I don't think there's an ethics issue here--you're not doing anything deceitful or untoward. Second, I appreciate your attitude of finding a way to provide a service in an untapped market. To some degree, my photography business, which led to my eBay business, started when I knocked on some proverbial doors as a high schooler, and nearly 20 years later, I'm still doing it. You never know what's going to stick until you try.
With that said, I have a few reservations about this idea. It's not to say they can't be overcome, but I think they're worth exploring before settling on a final business strategy. For an example coin, let's suppose a dealer has a coin listed for $500, but attributed maybe it's a $1000 coin.
1- A generic email to a dealer saying "something in your inventory is worth more than you're asking" could be seen as a game of sorts, and it's a chicken vs. egg scenario. If the dealer asks what coin before agreeing to your terms, what happens if he isn't interested in the attribution on the coin? Now you've given away your knowledge and have nothing in return.
2- Some varieties are only worth a premium to the right buyer. The dealer may prefer to sell for $500 and get his profit right now than ask much more but wait 6 months or a year for the right buyer to come along. The dealers that sell attributed coins are the ones who likely have the clients most interested in the coins, but the dealers already know what they have. Don't forget that with your arrangement, that extra $500 the dealer is going to make is really only $250 now.
3- When do you get paid? You and the seller make an agreement and now the $500 coin is worth $1000, and notionally you and the dealer split the extra $500. But then it sits for a while because no one wants it at $1000, even if a price history indicates that's fair. So the dealer discounts it to $900, $800, $700. It takes months to sell. If the dealer paid you $250 up front, if he drops to below $750 you're now getting all of the extra profit, and if it drops below that, your strategy cost the dealer money. If you agree to wait until the coin is sold, you could be waiting a long time to get that credit towards the coin you want. This also applies to 1 and 2 in terms of if or how the coin's increase in value will be accounted for.
@FlyingAl- It is certainly not unethical.... In a perfect world, your idea would work great for all concerned. I wouldn't count on it. Your morals and ethics are to be commended.
Unless it's a real major mint error, I don't believe the average coin dealer, knows, cares about or understands mint errors or varieties.
Disclaimer: I'm not a dealer, trader, grader, investor or professional numismatist. I'm just a hobbyist. (To protect me but mostly you! 🤣 )
It seems that one common human characteristic I have learned the hard way is that people don't want to be told how to better run their business, even if they are running it into the ground with less than great decisions.
It's not at all unusual for dealers to understand varieties that have significant value and are easy to sell. They stop caring when the time required to find a buyer is excessive or the value added is minimal.
As an eBay seller, there's one other consideration: if I make a claim and it's wrong, even if the buyer could have/should have confirmed the attribution before bidding, I'm going to be stuck footing the bill for making the error. If I'm not sure of an attribution (which usually means I'm trusting my source because except for the major Red Book varieties or attributions on a slab, I know little of most varieties) it's a big risk for me to list one. If someone comes from out of nowhere and tells me I have something special, I'm taking a risk if I just say "cool!" and take their word for it.
That makes sense. I don't do consignments so I don't have anybody providing attributions for me except maybe for what's written on the holder by the person I bought the coin from. I'll use that attribution if it increases the value of the coin enough to matter and I can confirm it to my satisfaction. If not, I won't.
Exactly. And then on the other side of the coin you have a malicious buyer come out of nowhere telling you, you have a significant variety when you don't. Then what do you do, take the time to research it? I don't think so.
Disclaimer: I'm not a dealer, trader, grader, investor or professional numismatist. I'm just a hobbyist. (To protect me but mostly you! 🤣 )
When it comes to whether something is ethical or not, for those persons who have a personal moral code that tracks long standing rules (i.e. thou shall not steal, kill, etc.), merely asking the question answers it.
Instead of asking if something is ethical you could ask if that something is legal.
The law is designed to establish minimum standards of conduct, which if followed, will result in a stable, civil society. Something can be legal, but not be moral or ethical.
I think what you suggest is legal and ethical. However implementing what you propose would likely be more burdensome and frustrating than the rewards and benefits you receive.
To make what you propose successful would likely require that you develop a close, longstanding relationship with one or more dealers that have a large volume of coins passing thtough their hands.
I look for alot of unattributed varieties with some very profitable results.
I am not into doing the research for them...
If you ask, I will do my best to help.
If you list it for purchase... all bets off.
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Im not a dealer nor do I collect varieties. That being said I love how you are thinking outside of the box ---thinking of ways to use your knowledge to further your collecting. Keep it up!
I believe it is not unethical, because my son essentially proposed the same idea to me 7 years ago and we’ve both been making money ever since! Lol.
So, all you need is an honest backer to accomplish even more than your stated plan here as you don’t need to buy coins to enjoy your 50% return.
Wondercoin
eth·i·cal
[ˈeTHək(ə)l]
ADJECTIVE
Relating to moral principles or the branch of knowledge dealing with these:
Principles...HUH ? Sign me up.
So if someone seems to run out of gas on a desert highway, would you tell him for a charge, that it's his alternator, after the transaction takes place.
I'd like to think I'll see ya down the road.
I tried something very similar when I was a YN. I got a strange look, a “thanks anyway kid” and then after I left the bourse table the dealer got out his attribution guide…
I've had people request closeup photos of specific areas of coins I have for sale on eBay. The first thing I do is see if I can find whether any varieties exist that aren't listed in the KM catalog.