Question for the full time dealers here
PeakRarities
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Lets say theoretically that I was toying with the idea of going full time into coins, and in addition to having a presentable website and working the major shows, I wanted to have a brick and mortar location. I live in a populated and generally well funded area (Palm beach county, FL) and im trying to decide if it would be worthwhile to open a retail store that would get walk in traffic, vs just renting a small suite in an office building thats half the cost.
Essentially, my question is for those that have any retail store experience- Does the walk in traffic generate a large portion of the income? People that email or call ahead arent the problem, as they are adept at using the internet and were able to find me in the first place. I'm just wondering if it would be a mistake to pay for a location that doesnt capitalize on road traffic and walk ins like if i was located in a shopping center plaza with a store front. At the end of the day, the goal is to be positioned to buy a nice collection thats been in a sdb for 30 years. Im well aware that alot of it will be bullion trades and crackheads with bicentennial quarters, but I dont want to sell myself short for when grandma is looking to dispose of a collection and she gets ripped at a pawn shop because she was looking for a window sign that said "we buy gold".
Think back on your best deals and your best customers, did they call first or did they just show up?
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I am not a dealer at all, but I have a lot of thoughts about how SG&A impact the profitability of a business. However, since I am not a coin dealer... I will keep my mouth (keyboard) shut and will be following this one. Nice topic!
I am a newer collector (started April 2020), and I primarily focus on U.S. Half Cents and Type Coins. Early copper is my favorite.
A good friend of mine owns a shop and he states 80% of his profits are buying/selling silver and gold.
"Fast moving dimes vs slow moving dollars" he calls it.
peacockcoins
Whatever you do, I suggest choosing a name other than Deplorable Dan's Coins. Just a hunch that it might send some people the wrong message.
Howdy DD!
My favorite local LCS is a brick and mortar operarion seems to do the vast majority of their business in bullion and silverware, jewelry etc and runs a very busy eBay store on the side.
But in the past year I have seen an entire run of proof Trade dollars walk in raw, as well as a huge gold collection all raw and one of the coins wound up being finest known gold dollar from the 1850s- both collections were handled by the owner, graded by PCGS, and sold on Stacks.
I think here in Florida we are positioned properly to get those walk ins when the older generation are ready to let go of their collections or when they pass away and the next generation doesn’t know what to do with the coins they inherit.
It looks like a lot of fun but a lot of work as well.
As you well know I'm not a dealer but I do know you. While you're a pretty big people person I think that you would get sick of the crackheads fairly quickly.
For you, with your knowledge base and connections, I would be immediately trying to start a Legend type business; fewer but better transactions. I don't think that you need to flip raw AG buffalo nickels for $2 to keep the lights on.
Yes you will miss out on that once a year/decade/lifetime lottery ticket that walks in but I think you would be happier in the long run, unless you really just want to be a man of the people and glad hand the public. And in that random scenario that somebody walks in with a $250k collection fresh out of the box and you do things ethically and make $30k before taxes... You'll feel great until realizing that next month you start at zero again.
The one thing I am 100% certain about though is that you'll succeed at whatever you put your mind to so if you want to do it go for it!!!
Chopmarked Trade Dollar Registry Set --- US & World Gold Showcase --- World Chopmark Showcase
I agree that another name should be used. I’d go “Deplorable Dan’s Coins and Bullion”.
😉
Mark Feld* of Heritage Auctions*Unless otherwise noted, my posts here represent my personal opinions.
I became a full-time dealer nearly 20 years ago and did major and local shows plus had a decent website. Never had a shop. The reason why is that a shop has about $15K of overhead a month, and the way I set up, my overhead was about $1K a month. I could never figure out how a new shop could support that much overhead. You could consider buying an existing shop that already had an established clientele and could cover its overhead.
An authorized PCGS dealer, and a contributor to the Red Book.
Great feedback so far.
Exactly, which is why I was initially leaning towards small suite in an office building. Id at least have a physical location where callers could come to meet and feel safe. Nice website, google listing and some SEO. Lower overhead, lower headache, and this would allow me to be immensely more flexible in my daily life (not having to be behind a counter from 9-5, no employees needed)
I've heard similar reports from many store owners. I'm more or less curious how much of that 80% makes contact by email/phone prior to arriving at the location. If I could still capture a majority of that 80% with online marketing vs straight walk in, then the storefront wouldnt be required for now.
I would most definitely have a different name 😂.
FFL- Those stories you told me about your LCS are what was making me consider the storefront in the first place.
We've talked about this before and youre exactly right. Id focus most of my time and energy on premium wares that i could sell online or at shows, but I also want to be positioned well for the buying end. Its tough to source nice inventory these days and if the premium coin market slows up, the bullion and junk can still pay the bills. As long as I can capture most of that without the storefront, then I wouldn't have to subject myself to the crackheads (at least not unexpectedly in person).
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One of the small LCS in Houston gets quite a bit of their walk in traffic and business simply because they are open on Sunday, and all of the major players in town are closed.
The larger dealers all expect the customers to plan around their hours, and in reality many of the people who have inherited a collection and are not collectors will simply choose the business that is open when they have time free.
You will have to get used to prominently carrying a gun.
I'm a Florida resident, already covered
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I like US Coins in Houston every time I go in there they’re busy with 3 or 4 different booths tallying up collections or bullion.
I think the brick and mortar, business model, along with serious advertising brings in the goods for these guys.
Best of luck with your endeavors!
Maybe you should also carry expensive watches ala US Coin and Jewelry to further support your desired clientele.
"Got a flaming heart, can't get my fill"
My biggest concern with a B&M coin shop would be safety. I don’t care how good your security system is or how well protected you are but having a coin store is inherently dangerous today.
The US Coin guys seem like good guys and their customer experience and security seem top notch...but the only series I know very well is T$s and every single T$ I see on their website is a horrendous coin (usually very problematic, not just unattractive ) priced 50% above retail price guides.
I'm very confident that whichever route Dan takes (if any) that his fairness to his clientele will be nothing short of sterling (or maybe .999 if he ends up doing enough bullion 😅)
Chopmarked Trade Dollar Registry Set --- US & World Gold Showcase --- World Chopmark Showcase
I don't own a shop nor am I a full-time dealer but from my past experience working part time for an LCS, the majority if your money will come from the scrap gold game. There is also very high overhead when it comes to a B&M and security needs to be kept in mind. Also, be ready for walk-ins and calls about whether a coin is a valuable error or not.
Collector
75 Positive BST transactions buying and selling with 45 members and counting!
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Have you ever owned a B&M business of any kind? I ask because my brain goes numb thinking about the initial turnkey cost of starting an LCS. Lease, business license, utilities, insurance, security, initial inventory, store setup, etc. and then how long it would take to recoup that cost while at the same time covering monthly expenses and paying yourself a salary.
Of course the other critical question is who will you be sharing the business with in the Palm Beach area.
I would drive over to Twery's. Talk to the guy's running the operation. They were pleasant when I was there last but I wasn't thinking about competing with them. You can ask them some questions and see how forthcoming they really are?
Howdy Dan. Sounds like we’re neighbors. I’m about an hour to your north. I’d kill to have an LCS. We only have a bullion guy, sadly. You sure are in a great area for disposable income. I’m curious though how much existing competition you’d have in that area? I’d imagine there’s a bit.
Nonetheless, they’ll be no shortage of cosmetic surgeons, anesthesiologists and dentists to buy your gold. Stay strapped!
Having fun while switching things up and focusing on a next level PCGS slabbed 1950+ type set, while still looking for great examples for the 7070.
While I don't own a shop, I work in one.
In a physical shop, you dabble in coins and trade bullion for a living. Coins are just the perk, the hobby, the occasional side gig, and the once or twice a year obsession when a great deal comes in. I'd say 97% of what I look at has no numismatic value, just intrinsic metal value.
"It's like God, Family, Country, except Sticker, Plastic, Coin."
Rico approved.
Paper money eventually returns to its intrinsic value. Zero. Voltaire. Ebay coinbowlllc
It's Ricko and he was an NRA trained firearms instructor. Florida is a 2A friendly state but carrying a loaded gun is a serious responsibility and proper training is necessary. Florida is one of the 27 constitutional carry states which means that you don't need a license to legally carry a concealed handgun provided that you can legally own it. Most coin dealers that I know conceal carry for their own protection. Don't forget that when seconds count, the police are only minutes away. If you currently have a good paying job that you like, you may want to start off dealing in coins on a part time basis---small shows on the weekend and mail order sales in the evenings. Let us know what you decide and good luck with your endeavor.
Worry is the interest you pay on a debt you may not owe.
"Paper money eventually returns to its intrinsic value---zero."----Voltaire
"Everything you say should be true, but not everything true should be said."----Voltaire
Yes, Ricko. I am a state fire marshal with a concealed carry license, trained, and I carry on the job every day.
Paper money eventually returns to its intrinsic value. Zero. Voltaire. Ebay coinbowlllc
I think we've figured out that it needs to be a gun, coin & bullion shop, that would be funner
You will need an employee or two, just for safety’s sake. A lone guy running a coin shop is a very high risk proposition.
Is there a local coin club? Join and go to the meetings.
Is there local competition from another coin shop? Are they any good at it?
Are you a retail-friendly kind of guy, or a cranky know-it-all coin expert? Can you answer a phone properly?
How about money? The more capital you bring to the enterprise, the more business you can do.
etc…
30+ years coin shop experience (ret.) Coins, bullion, currency, scrap & interesting folks. Loved every minute!
Maybe I am mixing up my stories and my memory faded... but I think it was @BillJones or another OG that once commented on David Hall.
The true sign of his expertise was his ability to walk into a show without coins, find bargains, make deals, and walk out with more money than wence he arrived.
If you knew had already been at the show... fugggidaboutit!
If you have the requisite skill, do you need a B&M?
This topic is something I have dreamed about, planned, pondered for years.
Have always told my wife that I wanted to retire to FLA to own a coin and gold buying shop.
Over time, came to realize that I would rather have $1M in cash and a large network of dealers.
Geographically isolated with a huge overhead, security issues, etc... no thanks.
BST: KindaNewish (3/21/21), WQuarterFreddie (3/30/21), Meltdown (4/6/21), DBSTrader2 (5/5/21) AKA- unclemonkey on Blow Out
For some added context, I’ve owned and operated a successful sales and marketing business for the last several years. I had up to 50 employees at one point, so I’m familiar with the complexities of running a business and I know how to deal with the public. Capital requirements wouldn’t be an obstacle.
That said, with some of the feedback here I’m thinking that a full blown coin store is not going to be for me. I don’t mind doing 50% bullion and 50% numismatics, but I don’t want to do 95% bullion and 5% numismatics. The security issue is an important one, and although I have my concealed carry license but I can see how having inventory on display is especially risky these days.
I think my original idea of a small suite in a secure office building would be best, if anything. I’d have some type of security system with a buzzer installed and I wouldn’t keep any inventory there. I would be buying from the public by appointment only, but mainly focusing on numismatics and not being stuck behind a counter if I want to go work a show.
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While Ive been a full time dealer for 25 years (speciality dealer in colonial coinage and Americana) I have looked into this over the years and from all Ive seen, most of the business is small time bullion sales/purchase. I need to be on the road a lot so I do things quite different from the "standard dealer". However, in the past few years, many friends and colleagues have gone to the private office by appointment model. Also, much income today can come from other sources other than walk-ins etc. Networking with estate planning/legal offices for example can be a portion of income for a knowledgeable dealer. I personally would not want the overhead, as I feel it is not necessary for an experienced numismatist (who doesn't want/can support super quantity sales over quality collecting numismatist clientele). On the other hand, my travel/insurance/shipping/dining/etc expenses at the end of the year is also not a "joyful amount"!
JBSteven who used to post here referred to that as a fast nickel beats a slow dime. I think more related to selling something for less than you have it priced at versus holding out to get your listed price.
It's a little of both. Bullion trades on narrow margins of a couple percent. But it's very liquid which makes it a "fast dime" (two cents? ) only that liquidity makes it profitable.
The other way to view it is wholesale vs retail in the numismatic side. You can flip things like Morgans quickly for a dime but need to hold out for a retail sale to make the dollar.
The entire problem with any BM, whether a retail store or office suite, is that it creates fixed costs. As soon as you sign the lease, you need to make your nut. That's why most operations are not the sexy rare coin emporium that many collectors picture.
How many forum members are planning on selling their rare coins to a local BM? Given the number of GC threads on the front page, it seems like very few. And that's why the very unsexy gold scrap and bulk wheaties tend to fuel most BMs.
You want to deal rare coins, you can actually do it without a front by just trolling auctions and shows as @NewEnglandRarities .
Not to speak for DD but I think his main concern is, if not going B&M, how does he source fresh material?
Overtime he can build a client base but in the meantime, how can he buy mid-high end material directly from clients rather than auction or wholesale? I suspect the answer is hang a shingle at shows and his reputation will speak for itself and grow...but I have zero firsthand experience.
Chopmarked Trade Dollar Registry Set --- US & World Gold Showcase --- World Chopmark Showcase
Sound advice and points well received. There are a couple aspects to me wanting to have a physical location.
I’ve already tested the waters with some marketing channels, and it’s proven to be fruitful considering how little effort I’ve put into it. I probably get contacted about a dozen times a week and obviously 9/10 are nonsense but 10% are solid leads that I often times refer to another local shop because I don’t have a location. I’m fairly certain that 1-2 modest deals a week would at least cover the base rent.
The other side of this is that I already have a large office and the lease will expire in October. I’m not the type that can work completely from home, I get distracted easily and I don’t want to be bothered by her the whole day. If it costs me a bit extra to have a “Satriale’s Pork” type front, so be it. Every man needs a place to retreat from his woman and drink whiskey in the afternoon.
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I'm not a coin shop owner, however, I am a coin shop afficionado, and as such when I travel I will seek out any local coin shops. I am drawn to the shops that I would call traditional B&M, and less so to the find my hole in the wall suite next to the nutritional supplement and JDM car parts suites. My local shop has an extremely active presence on eBay, they list about 200 items a week, and I think they do pretty well with walk-in traffic based on what I have seen. I suppose a lot depends on the clientele you intend to cater to. High end only coins I would think the location matters less, but to me an accessible, visible B&M with great online reviews would be my first stop, and first stop is likely to get the $$$ assuming a decent inventory.
High end material rarely walks into BM operations.
I wasn't advising either option but just pointing out in general why scrap is such a major part of most BM operations.
@jmlanzaf is right, there isnt much nice material thats goin to come from the B&M business. Sourcing fresh material will mostly be at shows or just from other collectors. The B&M business would help with cultivating local clientele and getting some revenue coming in with bullion and such. As you say, It will take a little while to develop my reputation in the rare coin business so in the meantime I might have to be a little more diverse in my approach.
On the flip side, I would certainly try to source nice material with the B&M. Like @NewEnglandRarities mentioned Im in a good area to network with estate planners and legal offices, and perhaps get my appraisal license.
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Good luck in your adventures!
Not a dealer, but you are a really good guy, so I feel compelled to share. My very strong advice would be to start small and see how things go. There is a reason B&M has been steadily declining since the 1970s, and you are not going to change that.
Small suite that's easy to staff and protect is one thing. Retail storefront is quite another. I honestly do not think the incremental revenue will be worth the trouble, which is why you don't see them all over the place anymore.
People go online to buy a quart of milk nowadays. The odds of you making a score off a sdb from a retail walk-in are extremely low.
If they don't find you on the internet, you'll develop a referral business through relationships with local business people, bank managers, wealth managers, financial advisors, attorneys, etc. If the business you imagine was there in quantity, there would be lots of shops to service it. There aren't. Best of luck to you!!! 😀
I haven't visited a B&M since 2011 and only then to sell a small stash of coin silver.
I did perform a browser search on "coin dealers Atlanta" for another thread recently which identified six fitting my description as numismatic dealers, as opposed to those whose name indicated primarily bullion but which I presume also sell "investment" quality coinage (generic pre-1933 gold, Morgan dollars, and probably some other mostly expensive US gold).
There may be (a few) more, but it can't be many. (One I used to visit in the 70's closed in 2023.)
Some of it may be population demographics (probably), but whether it is or isn't, this is in a metro area approaching 6MM population.
Specialize in what you like, as Doug Winter and JD have done. Big coins for whales.
DW and CRO seem to be doing quite well without a storefront location.
I’m guessing, but don’t know for sure, that at the larger shows most of the dealers with tables don’t have an actual B&M.
Well hell, might as well go all the way and include fine tobaccos and high dollar whiskeys. Bring in some attractive female sales folk and the customers will all go home with empty bank accounts.
Having fun while switching things up and focusing on a next level PCGS slabbed 1950+ type set, while still looking for great examples for the 7070.
My favorite local coin shop got a gun pulled on them a few years ago.
Since then they only allow customers a strict 10 minute visit. You line up outside and wait your turn to be let inside when an employee is available to help you. Basically, they hoover up precious metals though they did have three slabbed Mint State 1916 Liberty Quarters at a recent show, which surprised me. So they must be buying coins or estates too. Great people but they no longer operate as they did for decades. No sit & chats. No hunting through double row boxes. I occasional win an ebay item of theirs but local pick up is no longer allowed. I only visit when I've got something precious metal to part with. They have an xrf machine which is a must have if you're going to wheel & deal metals. Also I wonder what happens if a dealer buys stolen property. Our State has 30 day holds for the police inspection.
Will you continue to collect coins or just be a dealer ?
Some BMs definitely have their place, and a model that seems to work.
I’m in the Seattle area, and there’s a chain of coin stores up here that buys a TON OF MATERIAL (anyone from the NW knows exactly who I’m talking about).
When I visit a store it’s not uncommon to see four or five parties selling coins and jewelry. Occasionally you have to ‘take a number’ and wait to see a salesperson. I rarely see anyone buying anything, except for an occasional silver round or two.
They are very nice people, and I’ve sold a decent amount of 90% silver to them. I've also bought a few nice PCGS coins over the years, but I’m an outlier. It’s SELL SELL SELL in this place.
Dave
I dunno. I’ve been thinking about this. What if he made Deplorable Dan into a pirate mascot/character, complete with peg leg, eye patch, the whole nine yards. Florida already has some serious pirate synergy. Then the shop could be Deplorable Dan’s Gold & Silver, and he could advertise, “We buy and sell yer treasure!”
I had my first dealing with this type of business recently. I think internet presence is more important that have walk in traffic. If you can be easily found on the web for some businesses it’s better than traditional foot traffic. Your feet are now a key board.
@DeplorableDan
I'm not a dealer. But I wish you well.
I think Bulllyawn will be your best friend.
Martin
You've been successful in your line of work, why would you even think of pursuing coin dealing? I got a call today from a local guy wondering why there wasn't a shop in this town? I said it's been over 25 years since Ray Mercer ran his smart "Pennyweights" shop, catering to both the female largely teenage jewelry customers and Wall Street people looking for trophy coins. Different time, long gone, not even worth thinking about what would be required. I think of those going through painful experiences in relationships or business wanting an escape. Things get better if we do what we can to improve circumstances and attitudes.
Thats a valid question. I actually sold my business, and I dont intend to build another one like it anytime soon. It was a fast paced, high stress environment with many moving parts and too many worries. The industry had become more competitive over the years, we got a decent offer and I was ready for a change. I'll likely start a similar business down the line, but I'm not in a rush to do that. I'll wait until the right idea comes along and find a motivated version of myself from 5 years ago, give them some equity and let them deal with all the nonsense.
In the meantime, I have enough reserves that I can experiment and try to find something that makes me happy. While my business was fairly lucrative, it also made me miserable. Coins make me happy, and I already spend hours every week on coins for free. I go to all the big shows and spend thousands of dollars a year on flights and lodging, just because I'ts fun for me. I figured why not try to monetize that, and see where it goes? If I can make a living doing that, great. If I can't make a living doing that, I'll stilll be fine. I'd keep the website, work a few shows a year and deal part time while I start working on the next business.
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No matter what I do to make a living, I'm always going to be a collector. Some coins I will likely never let go of, but many of my purchases end up being "catch and release" anyway. This would just speed up the process, I get the most pleasure from the "hunt" anyways.
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