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Ethics and coin selling/dealing.
ohbaby
Posts: 768
First let me state my disclaimer upfront as some here are very sensitive about, well, everything! I am a rabid capitalist...to a point. I say let free markets be free.
There is a coin which a dealer was trying to sell on his website for > $15,000. I offered the dealer 50% his ask, he balked and did not counter. The coin sat there for months.
The exact same coin [it's is unique] just sold for a bit over $7,000 or a few hundred over my offer, after fees he will net less than my offer of last year.
I have since found out the coin was purchased raw by the dealer in late 2001 for $1,990. I say this for background info, his coin, his price.
Here is my question. Is there a point where the asking price becomes a gouging of the buyer? How ethical is it to have a margin of say 100%? 400%? 500%? This coin's initial margin was 750%.
Sure, his coin, his price but how can this fellow sleep at night? And from a business perspective it certainly would give me pause in trying to do business with him in the future and I am certain this was not lost on others who observed the same thing.
Edited to add: Did this dealer cheat the seller? He bought for $2k and tried to sell for $15k. If he did not cheat the seller did he try and cheat the buyer?
There is a coin which a dealer was trying to sell on his website for > $15,000. I offered the dealer 50% his ask, he balked and did not counter. The coin sat there for months.
The exact same coin [it's is unique] just sold for a bit over $7,000 or a few hundred over my offer, after fees he will net less than my offer of last year.
I have since found out the coin was purchased raw by the dealer in late 2001 for $1,990. I say this for background info, his coin, his price.
Here is my question. Is there a point where the asking price becomes a gouging of the buyer? How ethical is it to have a margin of say 100%? 400%? 500%? This coin's initial margin was 750%.
Sure, his coin, his price but how can this fellow sleep at night? And from a business perspective it certainly would give me pause in trying to do business with him in the future and I am certain this was not lost on others who observed the same thing.
Edited to add: Did this dealer cheat the seller? He bought for $2k and tried to sell for $15k. If he did not cheat the seller did he try and cheat the buyer?
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Comments
Tom
i've cherried many a coin that i resold for > 1,000% margin. that's a signficant part of enjoying the hobby!
K S
<< <i>Is there a point where the asking price becomes a gouging of the buyer? >>
As long as there is no deception involved, the answer would be no. The buyer is free to pass on the coin if they feel the asking price is too high, as your related experience illustrates perfectly.
<< <i>Did this dealer cheat the seller? He bought for $2k and tried to sell for $15k. >>
Without knowing the specific details of the purchase, it is not possible to answer that question. If it was a transaction between two knowledgeable coin people, though, the answer would again be no.
Russ, NCNE
It's OK to price a coin for whatever you want. Doesn't mean it will sell for that price.
In this instance, the dealer bought the coin for about $2k and then tried to sell for $15k. Now either he ripped off the initial seller by buying it way way below true value. Or he tried to rip the next buyer by over pricing the coin.
The more I think about this I feel he ripped the initial seller at $2k, knowing the coin was worth alot more. Why else price the coin at $15k?
Either way the situation is a little disturbing.
Coins are collectables with rough guidelines for prices, they are not fixed amounts that buyers and sellers are forced to abide by. Your issues are merely is the seller someone you want to work with and does he offer coins in your price range?
Tyler
Buyer beware, seller beware, too.
President, Racine Numismatic Society 2013-2014; Variety Resource Dimes; See 6/8/12 CDN for my article on Winged Liberty Dimes; Ebay
The bottom line is it is up to the seller and buyer to make sure they are both happy with a deal. What a seller pays for a coin is of no concern to the buyer.
Frank
Now, if the original Seller was knowledgeable enough, it would be different. However, in this example, the Seller would OBVIOUSLY not have been knowledgeable enough given the humongous spread (2k to 15k - or even 7k is massive).
It is HIGHLY immoral to knowingly purchase something from a desperate or unknowledgeable Seller for peanuts. If a dealer wants a better "bang" for his return, then he could have ADVANCED the Seller 2k against a percentage of the FULL sale price.
Would you all agree that the "everything for me and nothing for you" philosophy causes more misery in humanity than just about anything? matteproof.
I LOVE a few of my coins. And they are always for sale. But there is no way a person in his right mind would pay my price
They came to LOVE them as well.
I once traded about $700 in material for a single quarter here on the boards. I sold the quarter to the only bidder - just one bid - on E-bay for $1250 7 days later. The guy WANTED it more than I did AND he had the ability to pay for it. (by the way - the PCGS price guide said $1900)
My Auctions
I would love to have another crack at some of the dealers who "gave me the buisness" 30 years ago now !
Never ever sell a coin for less then you think it's worth if you have the time to shop it around yourself because there is always someone hoping to get a bargin at your expense {like me]
Allthough I will say that if someone offered me a coin I new was worth 7k wholesale, I would offer him more then 2 k myself so I could sleep at night .
Les
<< <i>However, in this example, the Seller would OBVIOUSLY not have been knowledgeable enough given the humongous spread (2k to 15k -or even 7k is massive). >>
If the seller was a dealer, or someone who presented himself as one possessed of excellent numismatic knowledge, than there is still nothing wrong with the transaction, ethical, moral, legal or otherwise. The lack of knowledege would be the seller's own damned fault.
OTOH, if the seller were some desperate old lady selling her deceased husband's coin, than an argument could be made that the dealer buying the coin is a slimeball - and I would be one of those making that argument.
In any event, since we are not privy to the details of the transaction, any judgement offered is just speculation.
Russ, NCNE
<< <i>
<< <i>However, in this example, the Seller would OBVIOUSLY not have been knowledgeable enough given the humongous spread (2k to 15k -or even 7k is massive). >>
If the seller was a dealer, or someone who presented himself as one possessed of excellent numismatic knowledge, than there is still nothing wrong with the transaction, ethical, moral, legal or otherwise. The lack of knowledege would be the seller's own damned fault.
OTOH, if the seller were some desperate old lady selling her deceased husband's coin, than an argument could be made that the dealer buying the coin is a slimeball - and I would be one of those making that argument.
In any event, since we are not privy to the details of the transaction, any judgement offered is just speculation.
Russ, NCNE >>
Hi Russ. I hear you. But even a "knowledgable" collector cannot know everything about every coin. In that sense, even a knowledgable collector can be without knowledge like a "little old lady and her husband's collection."
If someone is selling a coin that they thought was worth 2k, when in reality it was worth 7k (or 15k), then I feel the Buyer should disclose that when he makes his offer to purchase the coin. Or, in that same circumstance, if the buyer says; "how much do you want" and the Seller says "give me 2k," then the Buyer should recognize at THAT point that the Seller does not understand the value of his coin and should disclose that information. Thanks Russ.
I must admit I have been all over the map with this. Maybe I am just annoyed the dealer did not accept my offer and was too embarassed to come back and ask? LOL! Maybe!
I was surprised at some of the posts whose attitude was seller beware. I agree and disagree. Suppose it was your widow and she was "ripped" by a dealer, would you feel the same way? And then again it behooves a seller to due his/her homework right? But supposed the seller doesn't have the skills, time, interest, etc.?
I have a background in real estate and I have seen the proverbial lil ole lady sell land or valuable property at a fraction of its true value. The friendly realtor convinced her to sell so she had money to travel [or something like that] only to be discovered by her kids she sold land zoned for casino development. Not a true story but a compilation of similar stories I have read or heard about over the years.
Wasn't there a dealer in northern CA who last year was arrested for buying coins/stamps for way below market from an old lady? Why would that case be a possible crime when the case I discribe is not at the very least unethical?
As always some threads take on a life of their own. Let me state I am NOT saying the dealer committed a crime. I am also NOT stating the dealer is forced to sell at a particular price/profit margin, as some have implied.
At issue here is the ethics of paying a fair price for a valuable asset worth thousands. Totally different than cherry picking $40 coins from the bargain bin or proof/mint sets.
Test your ethics...what would you do if you were the dealer then imagine if you were the seller, how would you feel?
Edited to add:
Mattproof said:
If someone is selling a coin that they thought was worth 2k, when in reality it was worth 7k (or 15k), then I feel the Buyer should disclose that when he makes his offer to purchase the coin. Or, in that same circumstance, if the buyer says; "how much do you want" and the Seller says "give me 2k," then the Buyer should recognize at THAT point that the Seller does not understand the value of his coin and should disclose that information.
You are a man/woman of integrity! Great answer! [shuddering]
<< <i>Suppose it was your widow and she was "ripped" by a dealer, would you feel the same way? >>
I think I'd be more concerned with the fact that I was dead.
Russ, NCNE
EVP
How does one get a hater to stop hating?
I can be reached at evillageprowler@gmail.com
I, personally, don't see how there is ANY relationship between the first transaction and the second one.
Someone buys a coin for an agreed-on price. Transaction complete... done... finito.
Same someone sells the coin at an agreed-on price. This transaction has ZERO to do with the first one. Doesn't matter how much he/she sells it for.
What ever happened to free enterprise?
Hi ClarkOfKent. You said; "Someone buys a coin for an agreed-on price. Transaction complete... done... finito." If the deal was consummated with FULL knowledge by both buyer and seller, then your point is fair and reasonable. However, isn't it obvious that a 2k - 15k price move in one day proves that lack of full knowledge (or desperation for cash) is involved? If any deal has even the slightest taint of "deception" (i.e. NOT full disclosure) then how can it logically be a fair deal?
Let me give you a quick example. Suppose one of you guys offered me an 1858 half dime in PCGS ms65 for, say, $900. I look at the coin and I notice that it's actually an 1858 DBL DT half dime (PCGS does not list the 1858 Dbl Dt on their slabs as of today's date). I know that this coin is worth FAR more than the $900 that you asked. What should I do?
I should ask you if you knew that the the coin is a RARE 1858 Dbl date. If you said "NO," then I should say, "well the coin is rare and worth considerably more than the $900 that you are asking. I'm able to pay you 3k for it." And then go from there.
On the other hand, if I were to buy the coin for $900 given the above, without revealing the unique feature of the coin to you, then I feel I would be acting immorally. Not as much because of the "money" but MORE due to the fact that I deceptively exploited another person to his hurt. Ultimately, it would only be to my own hurt because treachery in the end destroys the soul of whoever uses it.
You said; " What ever happened to free enterprise?" Free Enterprise is a wonderful concept that I fully embrace. However, in order for Free Enterprise to be TRULY "free," it must also be truly honest. Deception in the name of "free enterprise" is tyranny. Thanks! matteproof
<< <i>I am a rabid capitalist >>
You can call yourself a purple cow, but that doesn't make you one. Your post does not advocate capitalism, you advocate socialism, defined as:
"any of various economic and political theories advocating collective or governmental ownership and administration of the means of production and distribution of goods."
You advocate control over the amount of profit a coin dealer is allowed to make.
The socialist shoe fits. Wear it proudly.
Mike
is that you end up being governed by inferiors. – Plato
I need to respond to your post.... all of it, really, but this part sums it up:
< On the other hand, if I were to buy the coin for $900 given the above, without revealing the unique feature of the coin to you, then I feel I would be acting immorally. Not as much because of the "money" but MORE due to the fact that I deceptively exploited another person to his hurt. >
I don't see where the deception comes in. If the seller told you they thought the coin had the unique feature that makes it worth more, and you told them it didn't... and that it was worth far less than they thought... Now, that would be deception.
It would be a different situation if the seller asked you what they had and what it was worth, and asked you to make an offer. But, in the case stated the seller has set the price.
You also write, < However, in order for Free Enterprise to be TRULY "free," it must also be truly honest. Deception in the name of "free enterprise" is tyranny. >
Again, I have to disagree, because your point is being made assuming there was some deception involved. There is no dishonesty or deception involved in a transaction where the seller sets a price and the buyer pays it.
I guess I'm just a tyrant.
<< <i>Suppose one of you guys offered me an 1858 half dime in PCGS ms65 for, say, $900. I look at the coin and I notice that it's actually an 1858 DBL DT half dime (PCGS does not list the 1858 Dbl Dt on their slabs as of today's date). I know that this coin is worth FAR more than the $900 that you asked. What should I do? >>
If I'm offering it, you should buy it from me and make an obscene profit. Then, when you do, I will celebrate your success.
Russ, NCNE
I said earlier: As always some threads take on a life of their own. Let me state I am NOT saying the dealer committed a crime. I am also NOT stating the dealer is forced to sell at a particular price/profit margin, as some have implied.
What else can I say?
This is a question about ethics and taking advantage of someone who is less knowledgeable. A few "got it", especially mattproof who got it better than me!
If don't have a problem with this transaction, like I said before put yourself in the position of the seller [who sold to the dealer] of the coin or put your widow in that position. If you have the same opinion I would be surprised.
<< <i>put yourself in the position of the seller [who sold to the dealer] of the coin or put your widow in that position. If you have the same opinion I would be surprised. >>
I would have exactly the same opinion. I would still be more concerned with the fact that I was dead.
Russ, NCNE
Do you think it's everyone else's responsibility to look out for your widow? If you leave your widow a valuable coin and you don't make arrangements to sell it upon your demise, or you don't bother informing your widow of the value of the coin (when you're still alive, of course), then YOU HAVE SCREWED UP.
If you didn't know what the coin was worth, yourself, then YOU HAVE SCREWED UP.
There are some who < Got it >. What that means is, there are some who agree with YOU.
I think those who disagree with you < Got it >.
How does one know about everything - Cars, coins, boats, houses, stocks, antiques, ........?
Project some of the concepts of this post to other areas of life, and it gets pretty ugly IMO.
You said; " Again, I have to disagree, because your point is being made assuming there was some deception involved. There is no dishonesty or deception involved in a transaction where the seller sets a price and the buyer pays it." I agree, IF both parties have FULL knowledge of the facts surrounding the transaction. Using my prior example of the 1858 half dime, I would have known (or should have known) that the $900 asking price was so out of line that the Seller could not possibly be aware of it's true value. Indeed, the Seller confirmed that he did NOT know (in the illustrative example that I used). At THAT point, when the Seller became aware of the facts, THEN at that moment, the potential for a fair deal between two knowledgeable players came into existence.
You said; " I guess I'm just a tyrant." Not at all! You are a very nice guy and a knowledgeable numismatist, just like OhBaby, Russ and all of the other intelligent guys on this board.
The most savvy dealmakers know that "win/win" situations are the best, most profitable, least problematic and most enduring when they include FULL disclosure. Tainted gain has an uncanny way of frittering away (i.e. Enron) and leaving behind a trail of bitter players who feel powerless and exploited. Who wins? Nobody!
Recall the image of "Justice." It's depicted as a large scale held in the hands of a blindfolded Standing Liberty looking babe. The scales are BALANCED representing fair play and truth (in dealings, at law, etc). The blindfold represents the good faith TRUST in dealings that a buyer and seller (or two people, peoples or nations) place one upon the other. The woman holding the scale represents Liberty itself. When any of that trust is broken, justice fails and liberty is denied. Everyone is then made the worse for it.
Last thought; the lack of "trust" between peoples (business, personal, political/national or otherwise) can only result from a lack of honesty (by one party or both) in their dealings with each other. If I trust you and you trust me; THEN freedom grows! Even utter failure and loss is tolerable when it's based upon trust and honesty among the participants. With trust and honesty there is always hope for a better tomorrow. Without it, there is every manner of paranoia, deception, and abuse. In fact, the debasing of Trust in our modern society has undermined more greatness and glory than is even calculable. To me, that is even sadder than an ATed coin. Thanks Russ!
Not if you truly believe in the concept of a free market.
>>>>Sure, his coin, his price but how can this fellow sleep at night? And from a business perspective it certainly would give me pause in trying to do business with him in the future and I am certain this was not lost on others who observed the same thing.
Someone elses profit margin should be of no concern to anyone. As a potential buyer, one has control (theoretically, at least) of how much they will pay, at most, for a collectible. Who cares how much the offerer of an item paid? Either you manage to buy it or you don't. Someone other than yourself who gives the offerer more than double your offer? This is the essence and spirit of a truly free market.
As for anyone being cheated, there is much ignorance and laziness "to find out" out there. Noone is or should be under any compunction to educate and fill an unmotivated-to-learn and lazy person with knowledge of what their item might bring them in the market. Not saying that is the case here and I'm not advocating taking advantage of little old ladies but a buyer of an item for resale can't really be certain of what that item might actually bring until those dollars are in his hand.
The measure of intelligence is the ability to change.
Albert Einstein (14 March 1879--18 April 1955)