The dividing line between enjoying a healthy mark-up and being a 742 pound pig

ColonialCoinUnion

If a dealer buys a coin in a public auction, and then offers it for sale on their website or mailing list, how much of a mark-up can they apply before they start to look unreasonable?

Now, I know a lot of people have said on this forum that what a dealer pays for a coin has nothing to do with how a coin is priced - the value of the coin in todays market determines the price. And of course a dealer is free to ask whatever price they want. And its a free market. Capitalism. Adam Smith. Etc. Etc.

But doesn't it start to grate on you when you see something from a very recent auction proudly being offered in Coinworld for about double what was paid just a week ago?

ER

<< <i>If a dealer buys a coin in a public auction, and then offers it for sale on their website or mailing list, how much of a mark-up can they apply before they start to look unreasonable?

Now, I know a lot of people have said on this forum that what a dealer pays for a coin has nothing to do with how a coin is priced - the value of the coin in todays market determines the price. And of course a dealer is free to ask whatever price they want. And its a free market. Capitalism. Adam Smith. Etc. Etc.

But doesn't it start to grate on you when you see something from a very recent auction proudly being offered in Coinworld for about double what was paid just a week ago? >>



It only bugs me if I REALLY want that coin. If not, I don't care.

haletj

I paid $1300 for a coin that was just bought at auction for $800. I would have bid but saved my money to bid on another lot which I didn't win. It is very annoying, but $1300 was a reasonable price, and who knows what I would have actually paid had I bid (the dealer, who seems honest, insisted he would have bid up to that level anyway).

dddangerousdan

The price he paid dosen;t matter as long as he is asking around the current value of the coin he is ok in my book. The only reason to be upset about it is that you did not see it real cheap before him

DAN

Barry

If a dealer marks up a coin that much, not only is he being a pig, but in most cases he's dreaming. There are enough bidders at auction, and enough ways to place a bid (live, internet, mail, phone, dealer representative, etc.) so that the final price should be within a few percentage points of market value.

I don't understand haletj's rationale for thinking $1300 was a reasonable price for an $800 coin. If so, why didn't the coin go for more at auction? There must be a reason the coin didn't close at $1300.

RYK

But doesn't it start to grate on you when you see something from a very recent auction proudly being offered in Coinworld for about double what was paid just a week ago?

If the coin passed between dealers four times before coming to the ultimate buyer with a 15% mark-up each time, a double is about right.

JohnZ

Does it grate on me? Yes, but in the end, if the market supports a higher price, why shouldn't the dealer sell it at a higher price? It's the way of Capitalism.

I saw exactly this kind of thing happen last year with a rare Polish coin, a Gold "Freie Stadt Danzig" Gulden. The hammer over at Heritage dropped at around $5000, and the next issue of Coinworld had a dealer advertising it for $8575. I wonder if it sold.

haletj

Well, I was wondering the same thing, wondering if anything was wrong or bad about the coin, but after getting it I like it okay, and feel it just slipped through the cracks. It was a 1916-s ms64rd Lincoln Cent, and just like what I was doing, the dealer suggested lots of people were saving their money for the twenties S's later in the auction. It is too bad I couldn't get it at only $800, but $1300 is very very fair (lower pop than some S's that are well over $2000 now).

haletj

I learned how to post pictures (thanks to Jonesy)!

mrearlygold

Couple years ago a customer had consigned some of his early gold to a heritage auction without so much as having a discussion with me about it. One of the coins was a small eagle 1797 eagle.

Big coin for most people. No big deal for heritage. The coin went off "after" midnight. The few dealers/lurkers in the room were falling asleep. Heritage then brought in what appeared to be a 50 pound rump roast and again, the few guys were more interested in getting the food than bidding on the sale. The coin went cheap cheap.

I bought it .

The customer called me the following week and called told me he "made a terrible mistake" and I agreed. He then told me he was only "testing the waters" when he consigned the coins and that he didn't "really" want to sell them and certainly he didn't want to sell for the prices they realized. Had he known how they would have been handled, blah blah, blah and blah. He was in a really surprised they were auctoned after midnight ( we gonna let it all hang down, after midnight, after midnight) ( Oh I forgot to mention he WAS THERE and saw me give my partners the high fives when we won the lots although he didn't know it was me cause he never met me before!) ( he didn't even have a bidder card)

Blew his mind when I told him I now "owned" his coins. He said that was YOU? I flipped them to him for 10% ( which was less than what I could have sold the coins for in the marletplace). Cost him over 10K for that "test".

Fortunately the coins have more than doubled since then.

Rgrds
TP

mrearlygold

Actually was more than a "couple" years ago.

TP