How many collectors here purchase coins solely through auction?
oldcameoproofsguy
Posts: 3,174 ✭
It makes sense to me. It would eliminate the dealer's mark up. I have a pretty good idea of what I want in a coin. The type of coins I collect are usually obtained through auction by the dealers anyways. I am also in no great hurry to finish my collection; it will take me many years. Sooner or later I'll win a nice example.
I only bring this up because I found one of the coins I purchased from a dealer in the Heritage Auction Archives. I now know what he marks up. I don't mind a dealer making a profit, but I don't want to pay for all his kids braces and his vacation to Maui either.
I only bring this up because I found one of the coins I purchased from a dealer in the Heritage Auction Archives. I now know what he marks up. I don't mind a dealer making a profit, but I don't want to pay for all his kids braces and his vacation to Maui either.
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Are you talking about picking off the internet or traveling alot and viewing these top auctions?
Much of what I have bought on internet auctions has been crap (but I am getting better)
I agree with you completely. One thing I would add is, you can sometimes find some real bargains on Heritage Post-Auction Direct Sale on coins that did not sell during live auction.
"Senorita HepKitty"
"I want a real cool Kitty from Hepcat City, to stay in step with me" - Bill Carter
I am assuming the purpose of the thread is to say by buying at auction the collector can buy at wholesale prices, ie the same price a dealer would pay for the coin if he/she was the purchaser. No matter who buys the coin the collector or the dealer, the auction house will get their piece of the action.
edited to say the question was kindly directed to Legend's comment
I agree. I can't count the number of times I have had dealers call me to buy a coin which I actually bid on and lost at auction. Markup? Usually 30-40%. Now if I did not win at auction for say $1,000 why on earth would I pay $1,400 afterwards?
On of the dumbest things a "well respected" dealer's dealer and PNG memeber told me after he showed me a blue box of overgraded classic type was that if I did not buy them he would put them for bid at Heritage and they would sell for more. He claimed that was always the case. Ah yeah right! I am sure the box have already had made the rounds of the show floor a few times, there was nothing really nice left.
It was on that day I realized even PNG members use pressure, lie, mislead and can hardly be called numismatists. They [not all] are salespeople looking to make a buck. Poor guy will never realize how much business he lost from me and my friends. It was also that day I decided to read read read and visit shows all over the nation. I now buy exclusively at auction for myself and friends.
There is a downside to everything. Attending an auction is exciting, the first 2-3 times. Afterwards it is boring, tedious and you waste alot of time. You travel and stay in generic look alike hotels and eat expensive too rich food. It gets tired quick. Sure if you buy alot and enjoy it, more power to you. I now stick to about 3-4 shows a year and a friend does the others so we split the territory/work.
Do dealers deserve a markup? Of course, they provide a service. 40%? No one is forcing you to pay that. Less informed buyers do I don't. I once in a blue moon will buy from a dealer, last time was 4 yrs ago for a one of a kind coin. I will be nice, honest, ethical dealers. Forget the ones who boast how large their inventory is [who friggin cares, do they have the coin you want!] buy from those who specialize in what YOU collect.
If you can attend the auction in person, then you can view the lot and have fun bidding on it, and hopefully B. Sher will not be at the same auction.
Or do you mean Cher?
That said, one has to be more careful at these auctions than is generally realized. For example, one of the main problems I see is what I would call pseudo-shill bidding. It is less obvious than blatant shill bidding where the owner of the coin (or a confederate) bids up the price along with unsuspecting collectors. Rather, what we have is the seller placing a high reserve price on the piece. Once bidding starts, the high bidder is identified only as the "book", and the audience doesn't know whether the "book" is one or more independent bidders or the coin's owner. The absence of this information places an aggressive bidder at a distinct disadvantage in the auction.
The fact that the "book" was indeed the consignor is revealed only after the auction and only if the reserve is not met. The tendency to publicize even this aspect of the bidding information started only recently.
Anyway, if your objective is primarily to buy nice coins at least cost, careful particiaption is the way to go. If you want to acquire the best coins out there, and are willing to pay more for overall higher quality, than combining purchases from auction and from reputable dealers is the way to go.
Many collectors are very specific about what they want. I could offer some collectors the greatest deal in the world, but if they have the coin, and they don’t think that they can sell it easily at a profit, chances are they will pass. If you are a looking for specific items and those items are going at high prices at the auction you could be shut out. And if you have spent money on traveling to the sale, that could be money down the drain. Sometimes undisciplined buyers will bid on something just so they don’t go home empty handed. That can be the biggest mistake of all.
Second many auctions are fraught with problems. Here are just a few:
Overgraded coins
Lots that are protected at high prices
Nutty bidders who push prices to insane levels
Shill bids
The only way that you can protect yourself from these pitfalls is to KNOW the market inside out. It takes even more expertise to bid in auctions than to work with reputable dealers. Auctions have very stringent return policies, as well they should. Almost always once you have purchased something at auction it’s yours unless it turns out to be a counterfeit. Mail bidders have more rights, but they are also limited. And mail bidders, who have never seen the coins, are at a major disadvantage to the floor bidders who have seen them. Bottom line, if you participate in major auctions, you have got look at the material.
Buying on the Internet is worse. There you have fewer protections and you must work with photos, which can be iffy even in the best circumstances.
Buying in auction and by private treaty both have their pros and cons. Neither is superior to the other.
90 to 95% of my coins are purchased via auctions. There are a few dealers that I do not even consider purchasing from, so that leaves the remaining 5 to 10% to a limited few (including coin shows).
I love Ike dollars and all other dollar series !!!
I also love Major Circulation Strike Type Sets, clad Washingtons ('65 to '98) and key date coins !!!!!
If ignorance is bliss, shouldn't we have more happy people ??
Why pay another 10-30% above what another dealer paid.
Everytime I read about how the BUYER PAYS the BUYERS FEE I just cringe. The SELLER PAYS ALL FEES period unless the bidder forgets about backing his bid off by the buyers fee! If a coin is worth $100 wholesale a dealer will bid around $85 for this at auction since 15% will be tacked on to this. He is not going to bid the # that the coin is worth. That's silly. The seller loses this 15% as well as the commission he negotiated with the auction house. The seller's total fee is therefore 15-30% depending on how he negotiates. The buyer gets the coin at wholesale (a level he will make his profit from), the auction house gets its usual 25%, the seller pays for everything. The only saving grace for the seller is run away prices and euphoric bidding due to the wide exposure his coins receive.
roadrunner
My experience [watching how the bidding usually unfolds] is that the private collector, with a few exceptions, overpays for the wrong coin and gets blown out on the right coin.
Important Reading for Collectors thinking of buying direct without Representation
Thanks for the post. Dinner was good.
I doubt very much that, even with dealer representation at auction, they would have caught this.
Thanks, TomB, who did the detective work. Obviously, the "world class graders" at PCGS screwed up and slabbed a doctored (AT) coin. Another thing, how did they go from "small letters" to "large letters"?
That's why this and other coin forums are so important for collectors to read and learn.
my friend buys coins and he does it this way and is really successful REALLY SUCCESSFUL
he does not attend auctions and has no expense or worry he lets dealers he has close relationships with work for him these dealers go to all the major auctiobs all!
lots of times well sometimes great coins sell for not so great money these dealers he works with are very astute and know the market and know waht the coins are worth and know all thre ins and outs or close to it!
and can sometimes buy these great coins for under market value sometimes way under then they offer it to him at a small markup if it within his speciality as he is a good longtime customer and is on friendly terms with the dealers some deralers developed a realtionship
doesnot hurt either
he can leisurely examine the oins within his speciality with no rush and buy or pass
he has gotten some great coins with no travelling expenses and in the comfort of his home and examine some greawt coins within his speciality and with a no pressure fixed price in the long run with no expenses or headaches or mistakes at auction it is cheaper yto just pay a little over the auction price the dealer paid for a great coin that was gotten at a goo deal at the auction! doesnot happen everyday but it does happen somewaht on a regular basis
he gets some really great coins at fair prices market prices nonetheless but great coins!
he told me that working ith a dealer is the best iof the best for him someone whom he can trust and is knowledgable
he thinks that is the best route now i am sure there are others that attend auctionbs and get great deals and other scenerios
but i bet that much rarer then the above
i guess it all depends on your circumstances and other considerations
sincerely michael
Rainbow Stars
Rare Coin Purchasing Strategies
I use, E-bay, Heritage and Dealers about equally.
Dan
bruce scher