Coin Auction Sites & Premiums
cinque1543
Posts: 46 ✭
As I mentioned in an earlier post, I'm considering getting back into the coin hobby. In this post, I'm looking for some advice on how to buy coins in today's world.
To cite one example: I went to the Heritage Auctions website (which was recommended in another thread) and saw a Morgan Dollar that I liked. The current bid price was $130. After checking prices on a couple other sites, $130 seemed about right for the coin. The price with the buyer's premium, however, was $164. This is a 26% premium above the value of the coin. I'll admit I was shocked. Is this really how people buy coins these days?
There is no coin shop within a reasonable distance of where I live, but there is a quarterly coin show not too far away. I'm thinking I should try there first to see if they have what I'm looking for (slabbed Morgan Dollars). Or maybe there are other online sites (auction and non-auction) that someone might recommend? Thx.
Comments
Welcome to the forum.
Whatever the amount of the buyer's premium, you can set your maximum bid rather easily by taking that into account.
If the buyer's premium is 20%, multiply your maximum bid by .833 to arrive at your desired bid amount.
For example, if you wish to bid a maximum of $130, set your bid at $108.
After a while it becomes second nature for many of us.
Mark Feld* of Heritage Auctions*Unless otherwise noted, my posts here represent my personal opinions.
If the bid price was $130 then yes the final valuation cost is higher to you and the market prices in the markup. If the coin has great eye appeal and CAC it would justify going over comps.
If you are buying coins in that price range you should avoid auction sites with high buyer's premiums. Never overpay for common coins like the vast majority of Morgan dollars.
Yes. That is how people buy coins. They also use ebay, private website, coin shows, coin stores and IG and FB.
Buyer's premiums are irrelevant. I've never paid a premium for any coin and I've spent hundreds of thousands of dollars at Heritage. As Mark said, you simply take into account the premium, shipping, and any sales tax when you place a bid.
FWIW I've resold most of my Heritage purchases for a profit. I'm a part time dealer. So you should never fear the Buyer's premium. You just need to consider it in your bid amount.
The major auction houses (Heritage, Great Collections and Stacks) are an excellent way to purchase coins If you are looking for a Morgan in the $130 range, eBay will have the most selection to choose from. One of the challenges to buying coins online is to interpret the photos of how the coin will look in hand. eBay coin photos can be extremely misleading to excellent depending on the seller. A coin show is an excellent way to purchase coins as you can view the coin in hand before making the purchase. The best way to purchase coins is to use multiple coin venues (auction houses, eBay, coin shows, online coin dealers, etc.) to make your purchases.
Thanks all for the advice. I appreciate it!
@cinque1543 . There is one other thing that should be mentioned. you must always take what additional charges might be added to your purchase. Shipping & handling, taxes, credit card fees etc.
For instance. Whenever I bid at Heritage I also have to take into consideration that with these additional fees i must add 11% to my cost.
example 180 bid X 20 % buyer fee =$216.00 then X.11 =$216.00 +23.76= $239.76
My example is for the state of Minnesota.
also, they have a $29.00 minimum fee which means a coin bid at $1 dollar is actually $30 dollar + those additional fees. James
I also live in a coin desert. 2.5hrs to my local-est coin shop.
On $130 coins, especially early in your collecting, there’s absolutely no reason to pay up. Another one will come along or a different one you like just as much. At this point in the game there aren’t any coins you “need.”
Back to the desert…when bidding /shopping online I will, on occasion, factor in that I can’t get to a shop or show without spending considerable time, money and effort. If it’s an extra $10 for something I like, that’s way cheaper than gas to get to see what’s in inventory at a shop. There is definitely some value in the convenience of buying online for people like us.
With that said, I much prefer in-person buying and miss the days when it was easy and didn’t take months of coordination to make it happen. I’ve been saving for 8 months in hopes of going to a show early next year.
At Heritage, you would need to set the max bid at $101 as the minimum buyer fee is $29. It will show the total numbers when the bid is placed, so there are no surprises. And figure about $8 shipping on a single, modestly valued coin,
Have gotten very good deals on Heritage as well as Great Collections. Ebay as well, but more caution is needed now, especially if one does not have a lot of experience.