Did slabs have any effect on the number of dealers?

kranky

This is more of a question for the folks who have been around for a while.

With a little knowledge, a Red Book and a storefront, anyone can set up shop as a coin dealer. You can buy from the public and sell to other collectors and dealers at a profit. If you buy from the public only to sell to other dealers, you would need to be pretty sharp so you weren't stuck with crap you can't move. Make big mistakes with raw coins, and you could be sunk.

Slabbing makes it possible for someone to become a "dealer" with no knowledge at all! Stick to the big three slabbing outfits, and no matter what you probably can't lose everything. Seems to me someone who was really good at tracking prices could make a profit without even knowing the first thing about coins. Find out who buys X at ask, then find someone who sells X cheap, and make yourself the middleman. Just keep moving the merchandise, and take a small cut.

Before slabbing, you could have gotten killed on counterfeit/altered coins so fast you might lose everything. Now you only have to worry about prices if you are buying slabbed coins.

Just wondering if anyone has noticed people getting into the "middleman" business without a lot of effort or background, by relying on the safety of slabbed coins to protect them.

FinallyHere

Krank,

Your post here has a great deal of truth yes, and there are plenty of people that call themselves "dealers" and are not mumismatists as we like to think of them. There is no doubt slabs have allowed this to take place, but there may be several benefits to the market as a whole that some may not realize or care to admit.

Mike Printz
Web Site

cherrypickincoin

Kranky,

There is some validity to that. However, I believe that if any dealer wants to make his way in the game for a long duration of time, it is essential to learn the ins and outs of the market. Your career will quickly come to an end as a dealer if you have no knowledge of this hobby. The biggest profits are usually received by huge firms that buy coins raw and then send them in for grading. Then you have your major crackout players who have such a keen eye for grading that they'll try for upgrades on any PQ piece they come across. If you buy a coin for X amount of money in MS64 and you resubmit it and it comes back as MS65, in some cases you'll be able to sell that same coin for 5 times or more than the amount you originally paid. Indeed, I think any dealer can make his way for a short period. Any dealer can make a living selling only slabbed coins as well but I sincerely have to believe that the major profit comes to those who are the most knowledgeable and know how to play the game right.

cladking

There are various types of "middlemen" in the hobby nowdays. Most deal in significant
volume and this is the greatest hurdle to getting into the field. Of course, most work on
very thin margins also, so they have to be pretty knowledgeable and have good contacts.
Slabs have probably made it safer for some types of middlemen but at the same time it
will increase the amount of knowledge necessary and decrease the spreads.

There are probably more middlemen since the advent of slabs but this is likely more the
result of the increasing number of venues for retailing and wholesaling coin.