Dealers have it made...
ealandg
Posts: 705
It seems there is quite a bit of benefit to being a dealer, particularly the wholesale prices. What do you think about people posing as dealers?
For instance, other than the fact that I am woefully ignorant when it comes to grading, how will the real dealers know I'm not one? Will they ask for my TIN or business card?
Perhaps it would be more cost effective for my collecting to become a "dealer" since they get much better pricing on coins. I will just not practice the selling portion of the business...
Thoughts?
For instance, other than the fact that I am woefully ignorant when it comes to grading, how will the real dealers know I'm not one? Will they ask for my TIN or business card?
Perhaps it would be more cost effective for my collecting to become a "dealer" since they get much better pricing on coins. I will just not practice the selling portion of the business...
Thoughts?
0
Comments
It sounds like you're saying this might be a viable way to go.
Go to dealer you want to buy coins from, decide what you will pay and either haggle for the price and buy it or move on. At shows dealers make larger deals involving many coins, trade and or cash, and any buyer can do the same thing.
I have bought coins at full listed retail from a coin shop and put them on Ebay and had them sell for double. they sold for double because I knew their value and the dealer didn't, he just stuck to the grey sheet as his pricing guide. I have also bought coins well below even the wholesale bids (doesn't happen that often) just because...just because, well who knows how? LOL
It boils down to knowing what you collect and understanding the market price. Dealers are just brokers. If the dealers in my area ask more than I want to pay I go elswhere and with patience I always find it at my price or better.
Tyler
I still have a tough time believing I wouldn't get a better deal if I could pretend I was a dealer. Would anyone actually call me on it? Do you request proof when selling that someone is a dealer?
Also, the more you spend on buying coins, the cheaper they get. In other words, the more you spend advertising to buy coins, the more often you will be offered coins that you can buy at good prices. Go to coin shows every weekend and make offers on a lot of coins. The more offers you make, the cheaper you will buy coins.
It's the law of probabilities. Also, the more you do something, the better you will be at it. If you try to act like a dealer once a year, you'll come across as an inexperienced person. Fake it until you make it.
One last thing. It's not unusual at all for a dealer to pay well over greysheet for many coins. Unless of course it's a dealer who specializes in ugly coins at cheap prices. It is a viable model.
(I have to go to bed.)
adrian
<< <i>One last thing. It's not unusual at all for a dealer to pay well over greysheet for many coins. Unless of course it's a dealer who specializes in ugly coins at cheap prices. It is a viable model.
adrian >>
Well, they can always make it up in the volumn!
“It ain't what you don't know that gets you into trouble. It's what you know for sure that just ain't so.” Mark Twain
Newmismatist
- is other dealers laugh at you when you try to return a coin ( I have heard )
What the hell is a volumn? Is that anything like a colume?
Jim
Smile, someone else always knows who you are and saw what you did,.. Big Brother.
The key is having your name in the phone book or whatever. As Adrian said,
<< <i>the more you spend advertising to buy coins, the more often you will be offered coins that you can buy at good prices. >>
Now I am a dealer, and of course the stuff I can get at the best prices is the stuff that "walks in off the street", as they say. Granted, you have to deal with a lot of folks calling you and wanting to sell their phoney cast copy Confederate half dollars or some pitiful handfuls of grungy Wheat pennies. But opportunity knocks.
My booth at the mall is an absentee vendor sort of thing- I am usually not there, because I work a full time job in the hotel industry. The Antique Mall staff has keys to my case and everything is pre-priced so they can sell it without any knowledge of coins. (The Antique Mall where I have my booth is within the bigger Colonial Mall at Glynn Place in an old defunct K-mart store.) So I seldom see my customers face-to-face. While it is an advantage to have my coins in a hot mall location that is open 12 hours a day, seven days a week, this puts me at a disadvantage to other dealers who are actually in their shops personally, since I can't buy when I am not there. So what I did is have some wooden nickels printed up as my business cards. Folks can take one of those, and they have my phone and email address on them. I have gotten several calls from people wanting to sell, lately (the calls increased as soon as the only other coin dealer in town moved away). Only twice has it been something worth buying that "walked in off the street", but I just bought some nice gold at practically near melt. One piece was a slabbed $20 Liberty in an old PCI green holder that I just know is gonna upgrade to MS63 when PCGS finishes grading it (even if it doesn't, I can't lose on it pricewise).
You are right that dealers get the best deals on stuff. I think it is usually because they have an advertised location, and people know who to call when they wanna sell coins. It is not because of their dealer-to-dealer contacts (though those can certainly be useful, too). The real way to buy is from the general public, who either don't know or don't care what they have. I'm not suggesting they should be fleeced, but they WILL sell at rock-bottom wholesale, if you're the one naming the price. If a collector were to have a regular ad in his local paper and/or Yellow Pages, were in an easy-to-find location, and had the budget to buy coins regularly, I guarantee you he would be able to cherrypick as well as any dealer.
This is one way eBay and the Internet have democratized the whole thing. Anyone can be a dealer, and anyone can cherrypick a real bargain from a noncollector, if he is sharp-eyed enough. If you know your stuff, it doesn't matter if you are a full-time professional dealer or not. I am often straight with folks who bring coins to me for sale, and if they seem disappointed with my offer (after all, I am only a small-budget part-time guy), then I explain to them that they could probably get more money by selling the coins themselves on eBay. Many don't want to fuss with that, though, and go for the fast-n-easy buck, which works out to a bargain for me.
Take a coin that is in the sheet (accurately) for $300 in XF and $900 in AU. Somewhere out there is a $500 XF example and an $800 XF example. People who are very familiar with that series will know those coins when they see them. You and I probably don't. A collector might see that $800 coin and think "why buy the $800 XF when it's only going to cost $900 if I find an AU?". But that $800 XF might be accurately priced.
Or to take another example, let's say a coin is in the sheet at $500. Perhaps the sheet is way off on that particular coin for some reason, and the going price is really more like $800. Another dealer might be happy to buy the coin for $760, yet a dozen collectors passed on the coin previously because they thought it was too much, and they could have had the coin for the same $760 after a bit of negotiating.
It's frustrating, to be sure.
I've had the chance to witness dealer-to-dealer transactions. You're right that dealers might get a break on prices - sometimes. Not all the time. If a dealer knows the coin is worth all of what he's asking, he doesn't need to cut the price for another dealer.
[edited for typos]
New collectors, please educate yourself before spending money on coins; there are people who believe that using numismatic knowledge to rip the naïve is what this hobby is all about.
sure, dealers can buy coins for wholesale & sell for a profitable retail. why should you be able too? the point you have completely missed is, if you really are a COLLECTOR, you derive benefit from the coin that goes beyond the monetary. that is, you (are supposed to) derive ENJOYMENT from owning the coin.
the advantage dealers get in financial gain, they totally lose out in the gain of ENJOYMENT.
i hold on to my coins for literally decades (at least the coins i collect). so i might get 30 YEARS of enjoyment out of a coin. a dealer get's what, weeks? days? literally hours or minutes? of enjoyment.
so the real problems here is not "cost" & "price". the real problem is that YOU have not become a collector yet.
when you do, the rewards you reap will totally eclipse any minor financial "benefits" your missing out on.
K S
1. Volume pricing - I was looking at several MS65 Franklins for my set, the prices marked on the slabs were reasonable for the PQ coins, high for the lower quality ones. I picked out several of the PQ coins and made an offer for all, which they took. When averaged out, I paid slightly less than greysheet for every coin.
2. Collector - (as Karl pointed out) There was an auction for an awesome Deep Cameo Proof, best sample I have seen. The seller first wanted double what it was worth, and it didn't sell. I talked with the dealer, who was selling it for someone else, and after checking with the owner he countered. I passed, still thinking it was too much. He relisted it, for about $10 over the offer he made me, and it sold. Since then, I have not seen any as nice, and the lower quality ones are all selling for more than I was offered. Long story short - I should have purchased it, I would have been happier.
Anyway - good luck with your collection!
You are doing well, subject 15837. You are a good person.
There is no such thing as an obligatory dealer discount. No way, not a chance. The "code" of the biz is that you try to make as much money as you can, and that everyone and everything legal is fair game.
There are two concepts here that I believe some of you are mixing together: wholesale and price breaks.
Wholesale is really volume business. It's really that simple. The laws of economics dictate that you can generally lower your per item overhead through volume. Thus, you can pass on some of that savings to the person with whom you are doing volume business. Dealers understand this, work hard to develop significant business relationships and rarely initiate low gain, high bandwidth transactions. A typical dealer-to-dealer transaction is quick and painless. A typical dealer-to-retail customer transaction is much more timeconsuming. There's a lot of tire kicking and price chiseling -- and just for a very small amount of gain to the dealer.
A price break can happen with or without volume business, and isn't the sole purview of dealer-to-dealer transactions. Why would anyone get a price break? Frequently, the price break occurs when the seller is tired of holding onto the coin and realizes that it's passed its time at the previous price. Also, a dealer will give a price break to a good customer as a reward for being a good customer (similar to the volume biz concept). Finally, a dealer will give a price break if he feels that he can reel you in as a loyal and good customer that way.
I'll use Steve Elwood to illustrate part of what I'm saying (and I hope he doesn't mind)...
Steve probably doesn't have much of business relationship with the volume "wholesalers" of the biz. Why? Because he doesn't handle the type of material that can be done on a volume basis. Thus, if he tried to buy from one of these volume dealers for a special coin, he'd get no special consideration just because he wears a dealer badge. Why? Because these guys don't know him and consequently don't care about him. They'd want to sell the coin to Steve for as much money as they can get him to pay. And, if they were to offer a price break, it would be to someone with whom they have a strong business relationship.
EVP
How does one get a hater to stop hating?
I can be reached at evillageprowler@gmail.com
1. Own a coin shop.
2. Advertise in the paper that you are buying coins.
3. Develop a good relationship with a dealer (this applies whether or not you are a dealer or collector)
4. Learn how to grade expertly
5. Learn what the real market is compared to the sheet.
6. Be smarter than the other guy you are dealing with.
7. Share your passion for the hobby as a collector with other collectors.
1. I dont own a coin shop but I think we all know that dealers with shops occasionally score and get good deals.
2. I dont advertise but the same thing happens as #1, except you go over to the seller and you still can score a good deal.
3. This is the BEST way to start getting coins at reasonable prices. I have about five dealers that I do alot of business with. I am VERY thankful for those contacts. They have taught me alot (see #6) and we generally have fun, both make money, and some of them I consider friends. For me, the transaction and the results of it listed above are the best part of being a part time dealer and part time collector.
4. Now, I am NOT an expert grader, but you can make (and lose) alot of money this way. I have a few coins that I have upgraded that have made me several thousand dollars and believe me, this is the most stressful way to make money since the grading services often smoke 1 or more crack rocks before they start grading...
5. This was alluded to above and is an excellent way to make money (and also feeds your ego if you are into that sort of thing). I resemble that remark.
You would be amazed at the number of small dealers that DO NOT know what the market is for various coins. These are the type of dealers that buy things at sheet or below and sell for a marked percentage over sheet. Here is an example. Greysheet bid in XF/AU was something like 1000/1300 a year or so ago on 1909-O Indian half eagles. I walked into the coin shop around that same time frame and was offered a 1909-O in a green PCGS AU53 holder. Great coin. I asked him how much and he said 1450$. After one quick phone call (yes Rick, the tit is still slightly wet
6. This is similar to #5 but includes varieties, strike characteristics etc... Know what brings a premium, what is en vogue etc... I try and suck up every inch of information that I can. Find your sources of information and become familiar with them.
7. Sharing your passion with other collectors will help develop relationships that will last a lifetime and often get you offers on coins first. This is a great COURTESY that is extended to you from people that know that you LOVE coins. Also, remember that it is a two way street. Collectors and dealers alike love first shot at coins. Paying a little more on average for fresh material and taking care of those that take care of you is how this business works. The big score is rare, but the connections you make will constantly produce coins that are of quality, which is becoming harder and harder to find...
Remember that everyone wants to buy for as close to lowest wholesale as they can... It is human nature!!! Keep in mind though too that price isnt everything like dorkkarl said. The enjoyment of owning a coin is priceless. Dealing a coin is fun too and can be profitable, but owning, to me, is still more fun.
Hope this helps!!
Very respectfully,
John
siliconvalleycoins.com
<< <i>the problems is, you have not become a real collector, at least not yet. if "price" is your driving factor, you are sadly missing out on 95% of what the HOBBY has to offer.
sure, dealers can buy coins for wholesale & sell for a profitable retail. why should you be able too? the point you have completely missed is, if you really are a COLLECTOR, you derive benefit from the coin that goes beyond the monetary. that is, you (are supposed to) derive ENJOYMENT from owning the coin.
the advantage dealers get in financial gain, they totally lose out in the gain of ENJOYMENT.
i hold on to my coins for literally decades (at least the coins i collect). so i might get 30 YEARS of enjoyment out of a coin. a dealer get's what, weeks? days? literally hours or minutes? of enjoyment.
so the real problems here is not "cost" & "price". the real problem is that YOU have not become a collector yet.
when you do, the rewards you reap will totally eclipse any minor financial "benefits" your missing out on.
K S >>
Wow! I guess you missed the part where I said my collection was like the roach motel. Coins check in but don't check out. I am not looking to make money on my coins. I have no intention of selling them. I just want to reduce the cost I have to pay for them.
I'm sorry you're so offended by my trying to get my coins less expensively. Did you get taken recently?
What he said is wise IMO, as I alluded to in my post.
I am just more like you though.
I asked "why cant I pay what other people pay?".
My post explains what I think is the answer to that question or at least a partial solution.
V.r,
John
siliconvalleycoins.com
<< <i>What is wrong with getting pleasure in knowing you got a bargain and enjoy the coin. >>
absolutely nothing. if you finagle a great deal on a coin, that's icing on the cake. i'm just saying, that if your FIRST concern always comes down to price, then that's a symptom that your almost definitely "missing" something as a collector.
this goes back to my old adage that i've mentioned many times, which i'll mention for ealandg:
the wisest coin dealer i ever knew told me this:
if you like the coin, if you really REALLY like it, then the price does not matter.
K S