Consignments--any downside?

Longacre

Is there any downside to consigning a coin to a major dealer? Does it cost anything? What are the chances that the coin will sell before one in the dealer's inventory? Is this a better route to go versus an auction or outright sale? I assume that the major dealers will shop it dealer-to-dealer, in addition to the public in a show. Any thoughts?

solid

My only thought here is that if you are consigning expensive coins, make sure
you are dealing with someone that does this regularly. Have a contract that
specifically spells out all the details - is it ok with you if the dealer sends the
coin to someone else on memo or approval, is it ok if the dealer sends coins
in for regrading, does the dealer have insurance to cover ANY sort of loss, etc.

Basically, CYA! There are many scenarios that could cause ill will here.

Ken

Catch22

Sorry, I misread the Dealer topic...

As emily Latella says....nevermind.

coinguy1

Longacre, there is some potential downside to consigning to a dealer as follows:

1) If a dealer takes a coin on consignment and cannot sell it, he might later be less willing to buy it outright (or to pay as much for it) than he otherwise would be.

2) Depending upon the potential profit involved, the dealer might not be as motivated to sell your coin as he would to sell his own coins.

3) If the coin is well publicized but does not sell, it is no longer "fresh" and might be difficult to sell (by you or someone else) later.

4) If you don't have possession of the coin it is possible that you will miss out on an opportunity to sell it yourself.

Despite the above considerations, consigning to a dealer you know and trust can be a fairly inexpensive and very good way to expose your coins to a broad base of potential buyers.

If you are going to consign to a dealer, I would recommend that the two of you be very clear about the terms of the consignment - What will the coin be priced at? How much will you receive for it if it sells? How soon after he gets paid will you receive your funds? How quickly can you get it back if you decide for any reason that you want him to return it to you? Are you out any money if the coin does not sell? And so on....

mrearlygold

Depends on the coin. If it's a great rarity or one which is offered very infrequently, and he offers it like a cheap want list coin and fails to sell it, you better plan on putting it back in the box for awhile.

Rgrds
Tom

majorbigtime

I've never understood how consignments work. Do you and the dealer agree:

1. That you get a % of what it sells for over a specified minimum, or
2. That you get a set amount if it sells??

EIther way, it seems you are at the mercy of the dealer who has a "no risk" proposition that is manifestly subject to potential abuse (especially in case 1) .

Am I missing something???

coinguy1

Majorbigtime, in my opinion (by far) the best way to structure a consignment is to agree at the outset, as to the price the dealer will ask for the coin, as well as what the consignor will receive if it sells. This avoids most possible unpleasant surprises.

clackamas

Add to the downside the dealer marking it up more than he tells you and planning on keeping the difference.

majorbigtime

<< <i>Majorbigtime, in my opinion (by far) the best way to structure a consignment is to agree at the outset, as to the price the dealer will ask for the coin, as well as what the consignor will receive if it sells. This avoids most possible unpleasant surprises. >>



That involves a big leap of faith.

What would you do if you discovered the dealer sold it for more that the price you jointly set???