Dealers/Frequent Sellers: what is a FAIR profit for you?
SeattleSlammer
Posts: 9,968 ✭✭✭✭✭
This was a good point that came up in another thread (and probably has been discussed in this forum many times in the past if I had to guess...but I'm relatively new, so bear with me please).
I'm just curious what you dealers/frequent sellers think: what percentage do you insist upon making on your prettiest coins? Of course, monster toned coins kind of blow everything out of the water....but would you say $5 on every $50 is good? Consider your relatively common yet still PQ coins.....consider the stuff you sell the most of on a weekly basis.....
As an avid buyer, I'm just curious. I'm one of those guys that knows the seller has to make a profit. What's a good margin to you?
I'm just curious what you dealers/frequent sellers think: what percentage do you insist upon making on your prettiest coins? Of course, monster toned coins kind of blow everything out of the water....but would you say $5 on every $50 is good? Consider your relatively common yet still PQ coins.....consider the stuff you sell the most of on a weekly basis.....
As an avid buyer, I'm just curious. I'm one of those guys that knows the seller has to make a profit. What's a good margin to you?
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I consider any profit to be good since I'm not a dealer, but I think most retail dealers out there are looking for quite a bit more then a 10% profit, whether or not they will admit to it on this board! Maybe alot of them look for at least 30%. Think about this - if a dealer offers say an MS65 Walker for $120, what do you think they pay for it? $110? No. $100? No. $80? Maybe....
JJacks
Just my 3 cents...
My Auctions
<< <i>but would you say $5 on every $50 is good? >>
Not even close. A gross margin of only 10% is a rocket sled to bankruptcy; not just for coin dealers, but for the vast majority of businesses.
Russ, NCNE
Oh, before you throw the “why complain about Coin Vault” argument out there, I’ll answer it now. Coin Vault (Shop at Home) can charge what ever they want for their coins. It’s the hype they try to pull over on less educated collectors/investors that bugs me.
Novice collector, occasionally selling some coins on eBay. Click HERE to see all my auctions.
By the way, anybody know when the greysheet first fell into the hands of Joe Blow collector?
The only thing necessary for evil to triumph is for good men to do nothing.
I've slowed down a lot in the last several years & about once a year I'll cull my collection and sell about 20 coins on the BS&T Board and about 20 on eBay. All I care about is the quick cash so any green is instant profit to me.
If you want numbers Coin Elite says I'm running +25.81% profit on PCGS graded coins, -4.04% on NGC, and -4.31% for ANACS.
That gives me an overall profit of +20.84% including other brand holders & raw coins.
That's strictly buy/sell with no fees, juice or associated costs such as postage etc figured in and some very lucrative PCGS crackouts & raw submissions to skew the results.
<< <i>If you want numbers Coin Elite says I'm running +25.81% profit on PCGS graded coins >>
It says I'm at 56.94%.
Russ, NCNE
ergo - 10% is "fair" - and 10,000% is "fair" provided the above is true.
GSAGUY
While I agree with the notion that nobody is forced to buy a coin, I disagree with the notion that fairness and coin buying should be mutually exclusive.
Sellers work to create a fair reputation so that buyers will keep coming back. Sellers appreciate buyers that also understand the idea of a good, fair deal--a deal where the seller makes a profit, but also a deal where the buyer gets the coin at a reasonable level.
The market determines what is reasonable. And you can sell a coin for a big profit and still make a fair deal.....you just have to have the nice, PQ coins that everyone wants. If I pay ten times over sheet for a rainbow toned Morgan, I'll often still consider it "fair" in the context of the exploding toned market.
Another time I bought an envelope toned 1942-D Jefferson for $12 (also at a show) and sold it for $85. Is that fair?
Russ, NCNE
Not trying to assume too much here, but I think what SeattleSlammer was asking was in general. We all understand that it is up to the buyer to be knowledgeable and so on. However, if a dealer has a standard (by that I mean not wildly rainbow toned or super hot type of coin) slabbed coin for sale lets say for $400, that retails around $400, what do you think it would be fair for that dealer to have paid for that coin? If you found out he paid $100 for it and bought it recently, you probably wouldn't feel he was a fair dealer who you would want to offer your coins for sale to. Also, most people wouldn't expect he paid $380 or something for it. Most people would probably imagine he should offer $200-$340 or so depending on how hot the coin is (I don't mean stolen!) and how quickly he can turn it.
Personally, I have never asked a dealer how much they paid for a coin that I was looking at buying, but sometimes if they have a coin priced at say $170 and I ask if they will do $160, they might say something like "Well, I guess so, but I'm only making $5 then.". Usually I don't really believe that! They probably have selective memory and forgot they only paid $120-130 or something.
JJacks
<< <i>I once bought an album toned 1964 Kennedy at a show for $2.50 and sold it for $77.00. Is that fair?
Another time I bought an envelope toned 1942-D Jefferson for $12 (also at a show) and sold it for $85. Is that fair?
Russ, NCNE >>
Yes and yes.
Novice collector, occasionally selling some coins on eBay. Click HERE to see all my auctions.
Let's turn this on its head. If a dealer is selling you a coin at a loss to get it out of stagnant inventory for cash, isn't that "unfair"? Instead of you bragging about your "rip", shouldn't you insist on paying more ... if only to Greysheet? Isn't cherrypicking immoral too? Shouldn't you point out what he missed and offer him full price for it? Fairness goes both ways, right?
To me, "fairness" comes into play more where knowledgeable dealers are ripping off unsophisticated buyers with exaggerated claims.
Come on over ... to The Dark Side!
Novice collector, occasionally selling some coins on eBay. Click HERE to see all my auctions.
Bullion 1%
Quick flip coins.....(proof sets, generic stuff) 10%
Rare coins 20% - 30% except gold which would be 5-10%
BUT...........I was ALSO a pawnbroker so I got a LOT of ..........CHEAP........stuff.
People would actually pawn ROLLS of maple leafs for $150-$200 per coin and LEAVE them.
CA state law required that we send them a notice with a 10 day grace period and they would STILL leave them. Lemme tellya............THAT...........is profit. Also coin collections for almost nothing.
They borrowed the cash and left the coins. REPEATEDLY.
And the coins weren't even HOT as we reported each pawn to the police.
Let's turn this on it's head. Let's say I take a coin I paid $400 for last week to a dealer.
What do you think he would offer me? Please no "it depends". Take the average across
all moderately popular, moderately available U.S. coins.
Well?
-KHayse
Novice collector, occasionally selling some coins on eBay. Click HERE to see all my auctions.
I just wanted to reply here one more time. KHayse has it right I think. The question relates to normal situations, not where people are panic selling or whatever. What percent would you expect a dealer to pay for a normal quality $400 slabbed coin or a normal quality $10,000 collection assuming they agree the coins are graded proper or are in PCGS/NGC slabs.
Of course, it is nobody's business what a dealer paid for a collection. I think the point is this however. Say you brought in an average $10,000 coin collection represnting a variety of popular coins, but all of good quality slabs for example to a retail dealer that proclaims "Buying coins...Please offer!!" or whatever. How much would you normally expect to be offered? Assuming the coins are good quality, in PCGS or NGC holders, etc., I would imagine most people would say $1000 would be very unfair, and $9900 would be way too fair!
JJacks
What do you think he would offer me? Please no "it depends".>>
Assuming you paid a fair retail price for the piece and it's the type of coin the dealer specializes in or can move easily, I would expect him to offer 15 - 20% less than your purchase price. I've certainly done it before working with typical greysheet bid ask prices.
GSAGUY
Edited to correct my ever-lousy spelling.
dealer looks then over one by one not flinching as he locates an 1877, 72 and 73 in the group.
Indian cents are pretty common, cosindering some are in better shape than others, we'll pay $1.00 each for the 200 of them.
wow - I'll take it.
idiot nephew leaves.
Customer witnessing transaction says -"seeing as how they are all common, let me take a look at them, I may want a few"
dealer says - "hang on" and removes a half dozen
Customer: "what were those?"
72, 73 and 77.
what do you want for them?
full freight
You know how much you ripped that guy off for?
yup.
shame on the idiot nephew for not checking them over, but he took them to a "knowledgeable professional" with a sign in the window that says "highest prices paid"
btw: I was the customer who watched this happen
Again, "fair" is truly what the market will bear. I'm usually willing to buy in the bid-ask range, plus a little more for harder to locate stuff.
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ronsrarecoin.com
ebay auctions for ronsrarecoin-com
..................................................................................................................(as much as the market will bear)
Camelot
Some of the dealers like the one who bought the indian cents should put a sign in there window that says "how can I ripp you today" If anyone thinks what this dealer did was honost, well I remember my brake in to the hobby and I'm happy to say after an expensive hard nocks coin education, nothing on that level will happen to me again and in my mind if that dealer is patting himself on the back for lying to the customer about the value of his coins in order to ripp him and justifying it by saying the collector should have done his home work, Well that person may not be a crook, but he/she is an unethical scumbag. Les
The Ludlow Brilliant Collection (1938-64)
<< <i>yet i am looked upon as as overpriced , rip-off , uncaring , slime creature , for asking $45 on a coin that I paid $40 for. >>
Not by me, you aren't. Here's an example:
That's an NGC PR67. I paid $80 for it. Do I care that the dealer probably paid $30? Not one bit. I like the coin, and it was worth the money to me, so what it cost the dealer doesn't matter in the least.
Russ, NCNE
Thanks everyone for the thoughtful responses. Looks like we've got all types here....and I mean that in the best way, really.