Definition of a dealer, spurred by another thread
What is the definition of a dealer, and why is there so much acrimony ascribed to it? In a previous thread, I think I saw 5 different definitions, and there were noses turned up at various ones. Why is there such elitism associated with the term? Why are so many disgusted with the idea of a “dealer?”
Let’s break it down a bit.
One poster provided a definition based on IRS filings, simplified. Thus, if the person is filing business taxes, and is consistently trying to make a profit, then they are a dealer.
Another said that folks sucking up table space at weekend shows with stale inventory are not dealers, and implied that these are just hobbyists out on the weekend with nothing better to do.
Another insisted that to be a dealer, one had to derive most or all income from that pursuit.
Yet another said that a dealer likely has employees and a storefront or on line presence.
Why are there sooooo many definitions, and why are “dealers” that don’t fit definition #3 so maligned? I find it funny that so many folks look down on the “vest pocket” or “weekend warrior” dealer. I know many of these folks, and frequently, they are some of the sharpest folks on the floor or in the auction house.
I personally subscribe to a notion of a multi-focal dealer definition, but in order to qualify as a dealer, to me, the person has to fit one primary rule. They must have a tax license (ID number) for a qualified business. Then I’d break it down into different types of dealers.
A. The Big boys/Girls. You know who these are. Established names/businesses in the market that handle impressive amounts of stuff.
B. The B&M. Again, you know them as they are a tangible presence somewhere. But frequently, these guys are local to just a 20-50 mile area.
C. The Internet Specialist. No store, but has a big on line presence. Or maybe just a presence on an App like Instagram or Facebook Marketplace.
D. The Show Walker/Auction Specialist. You might not know this person. But other Dealers do. And this person might make deals in the millions per quarter. But on the outside, they just look like a random Joe. Or a well-dressed man (think zztop).
E. The Show Dealer. You see them at the big and little shows. They travel a ton. Often, these are specialists in certain varieties of coins. Often, quick to share knowledge, free advice, and are pretty awesome folks.
F. The Bullion Guy. We all know one or 6 of them. He’s got Darth Vader rounds to 1000 ounce bars in stock at all times.
G. The Wholesaler. Man, if you don’t know this person, and you think you are a dealer…then you still have some education coming. These folks can be, and often are, lifesavers, if you are buying right. Look around the bourse and find the busiest table that has limited showcases. That’s your wholesaler.
H. The Intermediate. This guy is just past definition I, and is making a go of it. It might not be full time, might not have 15 employees, but this person has taken the lumps, bumps, and losses, and decided it’s ok to keep going. Often, they can work hard for you. Likely is a mix of D, E, F, and C.
I. The Nubie. Looks a lot like D or E and is trying to figure out their niche in the market. Maybe setting up for the first or seventh time, just trying to make it through. Learning curve….
J. The Shyster. That guy. The jerk that rips everyone and brags loudly of it to all who will listen. He’s always right. And he’ll let you know it too. I’m pretty sure he’d buy his own mother’s wedding ring for 25% of melt. And laugh.
Now, there is no reason some of these categories can’t be combined, and frequently they are (Think APMEX, Heritage, or someone like Don Rinkor or Witter Coins).
Where I personally think some of the angst coming out (against dealers) is due to the well-loved and frequently used category that loosely put, is a hobbyist that doesn’t file taxes as a business and doesn’t have a tax ID number. This person frequently falls into these sub-categories.
A. Local Show Weekend Warrior. Maybe this is the guy referenced above with the “stale” inventory and lacks a golf game? The club member that just wants to be part of the fun once or twice a year and make a buck or two.
B. The Flipper. You see him everywhere. Low-balling to buys, high-balling the sells. Often, these are the noisiest ones around, at shows or internet chat-rooms.
C. I’m a Dealer, Dammit. This guy just wants the privileges to buy and sell, but doesn’t want the hassle of the nasty bits of taxes and stuff. And he craves your respect. Kinda oily at best. Overpriced and looking for a fish to catch.
Ok, enough of my thoughts. What are yours? (And I’ll likely edit this as we go, for clarity).