Home U.S. Coin Forum

Poll: How Much Do You REALLY Think Most Large Dealers Markup Their Coins?

As having sold my fair share of coins to large, well known dealers over the years and subsequently seeing them for sale on their price lists, I have a general idea.....what do you think??

Comments

  • i say 30 to 35% on average , as an antique dealer i know sometimes it a 1000 % and rightfully so. thats businessimage
    Michael
  • ARCOARCO Posts: 4,305 ✭✭✭✭✭
    A dealer in my area takes the greysheet and sells them at certain ratio above that. It doesn't matter if the coin is cleaned, totally original, a key date or 100% generic. The price is the same ratio above greysheet. It works for me as I avoid the cleaned and problem coins, the overgraded coins and look for the original key and semi-keys.

    I haven't met an honest dealer yet that is proficient enough to cover all the bases and factor in all aspects of scarcity, originality and grading. I have seen a few dealers that cover all the bases by just overgrading every coin they sell. Those dealers I avoid like the plague.

    Tyler
  • Most are marking up enough to make a helluva living
  • I'd say 35-40% average.
  • nwcsnwcs Posts: 13,387 ✭✭✭
    As much as possible, of course. But if it is a dealer whose inventory doesn't turn very often, I'll say anywhere from 50% to 200%. If it is a dealer whose inventory turns fairly often I'll say anywhere from 10% to 100%. Depends, of course, on the purchase price, rarity, demand, etc. of the coin in question.
  • tradedollarnuttradedollarnut Posts: 20,146 ✭✭✭✭✭
    Dragon: If your definition of "Large" would mean a national, show circuit dealer of certified coins, then I'd be quite insistent that the appropriate range would be 10-20%.

    Look at where the coins are coming from for inventory: auction, other dealers, customers

    Coins purchased in auction are out there for everyone to see. The competition to acquire them is intense. The prospective customers can easily see what the dealer paid. Coins acquired this route will only bring 5-10% usually.

    Coins purchased from other dealers are just as expensive - after all, where did they get them?

    Coins purchased from most customers are almost as much. The dealer can save about 10% here because the customer knows he'll have to pay that to the auction company. But the dealer can't save any more because most customers are inclined to put it all into auction, so unless the dealer steps up and pays top dollar he won't get the coins.

    The only way to make more than that range on a consistent basis dealing in certified coins is to either make your own or deal in moderns.
  • I voted other. It can range from 10% to over 100%
    Today's mighty oak is just yesterday's nut that held its ground.
  • Steve27Steve27 Posts: 13,267 ✭✭✭
    I think it depends on the coin. It's probably 100% on a state quarter, but only 10% on rare slabbed high value material.
    "It's far easier to fight for principles, than to live up to them." Adlai Stevenson
  • I think it is too generic a question:

    Coin vault and the dealers that run multi-page ads for overgraded junk each week in Coin World: 200%

    The mom and pop shops that only sell raw, not very rare stuff: 40%

    The large national dealers that concentrate on certified, high-grade type coins to mostly investors: 20%

    The national coin show dealers who specialize and sell mostly through their website and coin shows and sell nice, rare certified and raw material: 10% to 15%

    Like one poster said, I have sold quite a few coins to my favorite dealers...and I can subsequently see what they are asking for them and know how much they will come off those prices. I think their markup is very fair.






    Go well.
  • 1957joe1957joe Posts: 608 ✭✭
    I think that it would depend on what they bought the coin for in the first place. There is a limit to what an item can be sold for. If they got it cheap, then the mark up would be higher!
  • Good question, I think to be thorough you have to consider the make-up of where the dealer in question gets his inventory from.

    Of the percentage of inventory that a dealer gets form purchasing from another dealer then sells to a collector, I believe a 20 - 25% mark-up would be average,

    Of the percentage of inventory that a dealer gets from a knowlwdgeable selling collector then sells to a knowledgeable buying collector, I believe a 25 - 35% mark-up would be averaqe,

    Of the percentage of inventory that a dealer gets from a member of the general public who is selling some coins that he has acquired from a deceased relative and has no knowledge of the true value, I believe the dealer has a mark-up of 50 - 200% on average simply because the dealer soaked the unknowledgeable seller.

    So, I'd have to go with an average mark-up of 40% on total inventory throughput.

    Jim
  • relayerrelayer Posts: 10,570

    I voted 30-35% as an average, but I think that percentage decreases as the price of the coin increases
    image
    My posts viewed image times
    since 8/1/6
  • au58au58 Posts: 1,288 ✭✭✭
    On average, 29.6%
  • dragondragon Posts: 4,548 ✭✭
    Thank you for all the votes. I would agree with the majority that the average markup seems to be in the 25%-35% range from my experiences in selling to dealers, sometimes more and sometimes less.


    dragon
  • BaleyBaley Posts: 22,658 ✭✭✭✭✭
    Don't you just love a perfect bell curve?
    the statistician in me is very excited!

    Liberty: Parent of Science & Industry

  • depends on the dealer
  • I can tell you for a FACT, that the only higher end PRE 1940's SLAB dealers I see using mark ups higher than 20% are the semi-telemarketers. I do not know of one single DIRECT competitor of mine who uses markups higher than 20%. I know we sure don't .

    Its not right to give dealers bum raps about what they charge. I'm not saying there aren't a few out there who don't get greedy, but overall most legit SLAB dealers mark up coins 12-20%.

    Also, keep in mind, not everyone just buys a coin as listed. Many people chisle, or do trades (many dealers allow for poorer quality trades when figuring a retail price).

    When dealing in the higher end slabs, the market is extremely competitive and the margins absolutley are squeezed. If anyone tells you differently, tell them to contact me and tell me their secret . Maybe on occasion the market moves, or someone "rips" a coin, but overall the margins aren't 25%! In fact, even the BEST "crackout" dealers generally average about a 20-28% profit over a years time (they have more losers than winners).

    What always amazes me is how people can balk at a legit dealer asking a fair markup to cover their costs while the auction houses suck up a full 15% premium everytime. And that doesn't add to the fact you have to pay seriously ABOVE the market to get the coins.

    You'd be surprised how even some of the very biggest companies don't make 20% on what they sell.

    Coinguy1, where are you????
    Laura Sperber


    JUST SAY NO TO WANNABES! They lurk and prey on unwitting collectors in chatrooms!
  • dragondragon Posts: 4,548 ✭✭
    Legend, I don't dispute any of your statements, nor did I start this thread to give a bum rap to anyone or stir up trouble.

    However......I do know for a fact from my past experiences in selling nice coins from my collection to various high profile dealers, that many of the pieces were subsequently marked up in excess of 30% and sometimes even more, perhaps I just sell too cheap.

    In fact, I just sold two nice pieces from my collection to a well known dealer, and saw them a week later on his website (with pics) with over a 100% markup.

    I also remember selling a really nice MS66DMPL dollar to a major dealer/auction firm last year....after three different people there told me they were "stretching" to go $1450.00 on that piece and that it was a low end coin in their opinion and a tough sell, I was rather surprised to see it listed as an "exceptional" coin on their website 9 days later with a healthy 75% markup!



    dragon
  • mdwoodsmdwoods Posts: 5,526 ✭✭✭
    Laura is a straight shooter. I agree with what she says in her reply.
    National Register Of Big Trees

    We'll use our hands and hearts and if we must we'll use our heads.
  • What the heck does it matter what a dealer or anyone else for that matter marks a coin up? I don't care if the dealer found the coin in the street or if he paid 100 times what it is worth. Show me the coin, tell me what you want for it and save me the bs story about how little you are making on the deal.
  • coinguy1coinguy1 Posts: 13,485
    Laura, fear not - I'm hereimage But, you might be sorry that I am.image

    I must disagree, somewhat, with your comment on the subject of auction houses and their commissions. If a consignment warrants it and the consignor has good information and bargaining ability, the big auction houses will often pay the consignor more than 100% of hammer. That means that the auctioneers do not always make the 15% that you mentioned.

    Regarding dealer mark-ups - I believe that there is a very big range in the industry, as has already been mentioned.

    I have already gone on record on this forum, regarding our mark-ups and am happy to do so again, now.
    If we acquire a coin at what we consider to be a typical wholesale price (meaning that we did not buy it at an especially low / favorable price or have to stretch to acquire it) we typically start out by marking the coin up by 25%. In the case of consignments from clients, our margins typically run from 5% to 15%.

    We know, up front, that we will: 1) sometimes have to absorb credit card fees; 2) extend discounts to certain well established clients; 3) give discounts on large orders; 4) lower the prices of certain coins if market and / or inventory conditions dictate; 5) handle certain generic-type material which has very tight spreads / margins and 6) I'm pretty sure I'm leaving at least one other thing out.....image

    I believe that when all is said and done, our average profit margin ends up being in the 10% to 15% range but have not gotten precise figures recently.
  • dpooledpoole Posts: 5,940 ✭✭✭✭✭
    If a consignment warrants it and the consignor has good information and bargaining ability, the big auction houses will often pay the consignor more than 100% of hammer.

    That's interesting. Are you saying that a savvy consignor with a special coin occasionally asks and gets above 100% hammer, with no fees?
  • coinguy1coinguy1 Posts: 13,485
    Dpoole - if the consignment is neat and valuable enough, a consignor can get / net more than 100% of hammer. I'm not talking about $1000 or $10,000 consignments, but, it can be and is done.
  • On the issue of the 15% at auction: someone gets hit with it some how . Whether its the consignor or the buyer. That was my point.

    There is margin always built in at the auctions.

    I am more concerned with collectors understanding that LEGIT coin SLAB dealers do NOT make 25% these days (in Pre 1940's coins). We are probably one of the few areas in ANY collectable where not only are the mark ups low, but there is dramatic liquidity (ever try selling any antiques?).

    Again, if dealers really are making that much (if they are not telemarketers), then tell me the secret!

    Laura Sperber


    JUST SAY NO TO WANNABES! They lurk and prey on unwitting collectors in chatrooms!
  • It ranges from taking a serious loss to get out of a mistake to 10,000%, but its 30-35% on average.
  • roadrunnerroadrunner Posts: 28,303 ✭✭✭✭✭
    I routinely see 20-25% markups on coins I have sold to major retail dealers with a web presence. While the typical starting markup may range from 15-35% depending on the coin, I figure the average price received falls in the 20% range. I routinely see markups on the web sites of major retailers who buy at auctions to be in the 20-30% range. Regardless of what the total costs may have been to attend the sale, etc,...the asking price is still 20% and up on the average. For every coin that's only at 12-15%, you'll find others to offset it from 22-40%. On the coins I have seen purchased out of auctions for resale by retailers where competition was strong, I do not see a "small" initial markup of 15-20% on average. More like 20-25%. JMO.

    roadrunner
    Barbarous Relic No More, LSCC -GoldSeek--shadow stats--SafeHaven--321gold


  • << <i>Laura is a straight shooter. I agree with what she says in her reply. >>





    << <i>In fact, I just sold two nice pieces from my collection to a well known dealer, and saw them a week later on his website (with pics) with over a 100% markup. >>




    << <i>I also remember selling a really nice MS66DMPL dollar to a major dealer/auction firm last year....after three different people there told me they were "stretching" to go $1450.00 on that piece and that it was a low end coin in their opinion and a tough sell, I was rather surprised to see it listed as an "exceptional" coin on their website 9 days later with a healthy 75% markup! >>



    It would seem that Dragon has provided some real-life, actual examples of dealers marking up his coins far in excess of Laura's quoted 20%. This is some very beneficial information.

    Dragon, I'm sure plenty of us would love to have an opportunity to buy coins from your collection for less than the dealers post to their websites!


    image
  • keetskeets Posts: 25,351 ✭✭✭✭✭
    just as there are a wide variety of dealers, there's probably a wide variety of margins that they work on. one thing is certain, all dealers are in business for a profit so they buy low and sell high by nature. coinguy mentioned averages and that seems a fair way to state it. maybe a dealer makes 40% on some items but i'm just as sure there are times when it's next to nothing if a coin just won't sell and remains in inventory for a longer than expected time.

    i've often wondered about that aspect of the business, how long to hold onto a coin before it becomes apparent that it has to go? dealers, how long?? from my standpoint, i sometimes reach a point where parts of my collection need to turn into something else!!

    al h.image
  • One other thing I think need some defending:

    I know I buy many coins out of auction. Here too, I know I do NOT mark those coins heavily UNLESS I feel I really "ripped" it. I believe other dealers treat auction coins the same way. The reasoning is simple: many people know the cost, why bother.

    There is a BIG HOWEVER tho: the coin may have sold too cheap. If you notice, there ARE times dealers pay more than collectors. The collectors scratch their heads and wonder why. It might be because they are behind the market and the dealer is not. The BEST example-the Benson Collection (the one with all the color coins). It wasn't until AFTER the sale did most of the public even realize that some coins actually sold cheap.

    Again, I am only talking about PRE 1940's coins.

    Also, the thing Dragon said about 75% blows my mind. I can't believe there isn't more to that story-especially if it involves a legit company.
    Laura Sperber


    JUST SAY NO TO WANNABES! They lurk and prey on unwitting collectors in chatrooms!
  • There is an easy answer to the question of how much people mark
    up their coins. It is called supply and demand. What the market
    dictates is what they will sell for. Some dealers may try to mark up
    100% or more and wait for a few suckers to make their money.
    Other dealers may mark up 10-15% and try to establish a good
    customer base to make their profit on volume. Others may fall in
    the middle. But it doesn't really matter. If you think that your coin
    is worth $250, don't sell it for $175. If you see a coin that you feel
    is worth $250, and a dealer has it for 400, don't buy. The value of
    the coin is what YOU feel, not what anyone else feels. If you don't
    find someone who agrees with you, you are not going to be doing
    much buying or selling.

    That is why I get amused by people complaining about "high margins".
    If you don't like the prices, don't buy. If everyone agrees with you, the
    dealer will go out of business or lower his/her prices. If they stay in
    business, guess what: enough people are willing to pay that price, so
    it is a valid price.
    Robert Getty - Lifetime project to complete the finest collection of 1872 dated coins.
  • EVillageProwlerEVillageProwler Posts: 5,859 ✭✭✭✭✭
    I think most of you are looking at this issue in the wrong way. In general -- since we are speaking in generalities here -- I'd say that a retailer will sell a coin for whatever he feels is the correct retail level. Then, depending on the value or demand of the coin, he will pay some percentage LESS for the coin. If the coin is a wildly toned 1877 IHC in MS66RB, then probably the purchase MARKDOWN will be around 15%. But, if the coin was a 1913 T1 5C in MS63, then I'd say that the markdown would be something like 40%.

    Why? Because the dealer has to invest his own capital to carry the inventory. The IHC, presumably, is a hot item and pricey item and the dealer expects either to be able to sell it quickly and simply to be able to do the same amount of work for a pricier item (less operational overhead). As for the Buff 5C, the dealer has to invest more operational cost for that item *and* it may not sell as quickly because it is far less interesting than the IHC.

    Of course, every dealer will pay as little as possible when purchasing outright for retail. But, there are extenuating factors, like are the coins from a long-time excellent customer, etc.

    This is different than when a client consigns their coins for sale. The dealer, in this case, doesn't really have to tie up capital for that inventory. So, they can afford to mark up the sale price less. (Of course, this also requires input from the client -- like if the client is especially eager to raise funds...)

    EVP

    How does one get a hater to stop hating?

    I can be reached at evillageprowler@gmail.com

  • tradedollarnuttradedollarnut Posts: 20,146 ✭✭✭✭✭
    Nah - on a wildly toned MS66RB 1877 IHC, the dealer will pay full retail [or maybe more if he has to] knowing full well that he can hold Lakesammman hostage............ image



  • jcpingjcping Posts: 2,649 ✭✭✭

    When a dealer paid $100 to buy a coin and listed it for $150, is the markup 50% or it is 33%? I would assume it is 50%. Correct me if I am wrong.

    I saw many old timers (I mean national known famous show/retail dealers) still enjoy high markup (50% and up) so that their coins move slowly and you could see the same coins in their Coin World/Numismatic ads again and again. Why did I say national known old timers? Their inventory is rich so that they simply shuffle coins around so that their ads looks fresh. If you put 5 to 6 ads together, you could see that their coins did not move since they try to retail all of them. Usually, they are asking 25% to 50% over graysheet ask.

    There is another type of coin dealers. I believe Laura's and coinguy1's statement that this type of dealers are working on 10% to 25% markup and they deal with mostly (90%) PCGS/NGC certificated coins. These are the dealers I deal with. Usually, their asking price is close to graysheet price.

    Of course, don't forget some dealers only sell raw coins, some dealers sell mostly AGC/PCI coins in the show. I believe their markup is very high due to the liquidity of their coins. I won't be surprise that their markup is 100% to 250% or even higher.

    Many legit dealers need to move large $$$ to cover the show expense. Some dealers only need to find one sucker to cover the whole year expense image and many of us still think they are legit dealers (with PxG logo)
    an SLQ and Ike dollars lover


  • << <i>When a dealer paid $100 to buy a coin and listed it for $150, is the markup 50% or it is 33%? I would assume it is 50%. Correct me if I am wrong >>

    Jcping, I agree with your "assumption" in the example you gave. The mark-up is 50%, but, if the coin sells at the full asking price of $150, the profit margin is 33 1/3% ($50 profit on a $150 sale).
  • LakesammmanLakesammman Posts: 17,282 ✭✭✭✭✭
    Wow - so I'm the prototype sucker.......didn't realize it! Feel free to PM me and let me know all about it. image

    image
    "My friends who see my collection sometimes ask what something costs. I tell them and they are in awe at my stupidity." (Baccaruda, 12/03).I find it hard to believe that he (Trump) rushed to some hotel to meet girls of loose morals, although ours are undoubtedly the best in the world. (Putin 1/17) Gone but not forgotten. IGWT, Speedy, Bear, BigE, HokieFore, John Burns, Russ, TahoeDale, Dahlonega, Astrorat, Stewart Blay, Oldhoopster, Broadstruck, Ricko.
  • keetskeets Posts: 25,351 ✭✭✭✭✭
    the profit margin is 33 1/3% ($50 profit on a $150 sale).

    am i the only one who looks at this as a 50% profit--------$50 profit on a $100 investment?? that seems to me a bit more truthful.

    al h.image
  • 1957joe1957joe Posts: 608 ✭✭
    If you feel that most of the dealer's mark-ups are too high and they are all making way too much money, feel free to go into the market as a dealer yourself! Make a killing. This is the America!
  • Keets, in the example cited, it's a 50% profit (over cost) but a 33 1/3% profit margin (as a percentage of sales) - sorry I omitted the "as a percentage of sales" verbiage.

    Just to make sure there is no confusion, when I say a coin is marked up 25%, I'm referring to a cost of $100 and a list price of $125.
  • wondercoinwondercoin Posts: 16,649 ✭✭✭✭✭
    Regarding pre-1940 coins, it really matters little to me "what the dealer paid" for a coin or where he got it - the only question is what is it worth and how that compares to what it is being offered to me for.

    At a recent auction, I spotted a neat coin and recommended it to a collector in that series a day or two before the auction was to go off. We figured the coin for a $28,750 bid which was going to be executed live at the auction. It sold for $8,050! The collector raised my standard auction purchase fee to include a "bonus" and I earned $2800 on the $8,050 coin. Heck - I made 35% on this coin - way too much according to some on this thread image On the other hand, had I not mentioned the coin to the collector at all, it would have easily sold for $20,000 - $25,000 "quick flip" as a "great bargain" shortly after the sale and my "mark up" could have been upwards of 300% with everyone happy! Coins like this do not "fall through the cracks" in every auction session, but, you can see from this example that there can easily be times a dealer mark up of 25%+ is super fair to all involved. And, the above example was not even an "upgrade" coin example - where incredible (and well-deserved) markups often exist. image

    Wondercoin
    Please visit my website at www.wondercoins.com and my ebay auctions under my user name www.wondercoin.com.
  • EVillageProwlerEVillageProwler Posts: 5,859 ✭✭✭✭✭
    am i the only one who looks at this as a 50% profit--------$50 profit on a $100 investment?? that seems to me a bit more truthful.

    Keets,

    I think they're just parsing words, but I find Feld's verbiage more accurate because the taxman will see $150 in and $100 out. That means that the dealer has to report a gross business of $150 to the IRS, and they will think 100/150 for a 1/3 margin.

    EVP

    How does one get a hater to stop hating?

    I can be reached at evillageprowler@gmail.com

  • GaCoinGuyGaCoinGuy Posts: 2,715 ✭✭✭✭
    well, you have to add for the following:


    Hype 50%
    Key Spam Words(Gem, Monster, Original...etc.....)5-10% for each use of each word.
    Shipping and handling 12%(even though your 'handling' consists of picking it out of the box it's in and stuffing it in a 10c envelope and slapping 37c stamp on it.)
    Hype 50%
    Potential restocking fees add 15%
    Ebay fees 3-4%
    PayPal fees 2%
    Time and effort to allow people to browse and maybe look at 25%
    imageimage

  • BearBear Posts: 18,954 ✭✭
    Laura, I dont know one single major dealer who will accept my

    jelly donuts, in payment for a rare coin.
    There once was a place called
    Camelotimage
  • Bear,

    Bad deal, huh?

    Laura Sperber


    JUST SAY NO TO WANNABES! They lurk and prey on unwitting collectors in chatrooms!
  • ElcontadorElcontador Posts: 7,412 ✭✭✭✭✭
    I will confine my comments to either coins I have bought or seen personally.

    1) A lot depends on the dealer and whether he / she "buys the coin right." I have seen some dealers pay too much for IMO mediocre material for the grade & try to mark it up to cover their costs. Typically, they will get into a type / grade that they are not familiar with, try for an upgrade, be disappointed, and get stuck with a coin on which they have paid too much. Also, keep in mind that it really doesn't matter what the asking price is for a coin; all that is important is its selling price.

    2) The more resourceful dealers I know work from want lists and have a pretty good idea what their clients will pay for the specific desired coins. The key is for the client to wait until the dealer can "buy the coin right." When I have done this, I estimate I paid typically 10-5% over the price the dealer paid.

    3) If I don't think a dealer "bought the coin right," it doesn't matter what the mark-up is, because IMO, dthe dealer paid too much for the coin in the first place. A few instances come to mind, but my silence will protect the guilty.
    "Vou invadir o Nordeste,
    "Seu cabra da peste,
    "Sou Mangueira......."
  • cladkingcladking Posts: 28,312 ✭✭✭✭✭
    Really the margins depend on the dealer, the coins, and the strenght of the market.
    Certainly a dealer who specializes in ten or fifty thousand dollar coins is generally go-
    ing to have a relatively low mark-up. The prices of these tend to be well known by
    both the buyer and seller and the dealer usually acts more as a broker than a dealer.
    Even here though, there will be opportunities to acquire stock very cheaply at times so
    there will occassionally be more substantial mark-ups. Many of the coins which sell in
    the $100 to a few thousand dollar range will typically be slabbed and will average a much
    higher mark-up. Again there are many factors but generally figure between 25% and 80%.
    Raw coins also will fall into a very wide range. Some will usually fall at only 25-35% but
    many will more frequently be at 200 to 300%. Anything which exists in ample quantity and
    has relatively few motivated buyers will have huge mark-ups. Such items don't even have
    to be common if they are off the beaten path such as tokens or the like.

    Tempus fugit.


  • << <i>What the heck does it matter what a dealer or anyone else for that matter marks a coin up? I don't care if the dealer found the coin in the street or if he paid 100 times what it is worth. Show me the coin, tell me what you want for it and save me the bs story about how little you are making on the deal. >>



    I concur.
    A dealer once asked me if I noticed any three-legged buffalos on the bourse,to which I replied,"...no,but I saw alot of two-legged jackasses..."

Leave a Comment

BoldItalicStrikethroughOrdered listUnordered list
Emoji
Image
Align leftAlign centerAlign rightToggle HTML viewToggle full pageToggle lights
Drop image/file