Is it in eBay sellers' best interest to overgrade raw coins?

ccex

For the last 5 years I have purchased many more coins on eBay than at shows, coin shops, or from websites. Very few of my coins are slabbed, and my pride and joy resides within my Dansco albums.

In my quest, I have learned how to read between the lines of most eBay coin auctions. I am familiar with the grading of a few of my favorite sellers, and am getting better at gambling on grading from scans or digital photographs. (And yes, there are as many doctored images as doctored raw coins out there on eBay.) Still, I have noticed that sellers of raw coins are punished by listing a conservative grade in the title. There are so many sellers who regularly overgrade and neglect to mention cleaning or other problems, that buyers not familiar with the particular seller tend to place their bids assuming "average eBay grading" Many bidders assume the actual coin is worth 60 to 75% of Graysheet bid for the coin at the advertised grade.

Given this skepticism among bidders. does an honest seller have to inflate a grade to break even on a raw coin? Or is it better for the seller in the long run to adhere to strict ANA grading, hoping that his/her honesty will attract repeat buyers? My personal feelings are that I am not sufficiently known on eBay to get bids above CDN bid when I grade conservatively. However, I usually get CDN bid on my duplicates if I grade liberally. Therefore, I refrain from putting a bid in the title, and include in the description something like "this coin grades VF-30 for buyers or XF-40 for sellers". Does anyone else admit that a coin buyer's eyeballs are hairier than a coin sellers'?

I have had excellent experiences buying coins on eBay from forum members here who take either approach, once I know how they would answer this question.

K6AZ

Paul, honest graders of raw coins take a beating on eBay. Since I refuse to inflate my grades, I got hammered on the last group of raw coins on eBay. I will no longer put raw coins on eBay.

Wolf359

What Eric said...I get about 65% of greysheet on raw coins.

rhedden

I try to grade honestly, and sometimes I feel like nobody looks at my coins because they don't boast artificially high grades in the auction title. I don't lie about it if I list a cleaned or recolored coin, and in such cases, I always get a poor closing price, even if the cleaning is trivial. From now on, I will only list with "Buy it Now" because true auctions are a real problem if you point out the flaws of your coins.



Here's a good example- if I didn't say this coin was dipped, I bet I would have gotten $300 for it.

1911-S Lincoln debacle

ziggy29

I've sold a few raw coins on eBay, but only circulated stuff. I try to describe them carefully and fully disclose whatever defects there are. I usually only do this with coins that aren't terribly valuable, or have problems that preclude them from realizing their value in that technical grade.

I won't sell MS coins on eBay. Many novices can tell the difference between a Fine and a VG coin and may feel comfortable paying close to F-12 money for a coin. Many novices can't tell the difference between an MS-64 and (say) a cleaned AU. It's mostly the nice, MS stuff that gets "ripped" when sold raw.

BillJones

Ebay and Gresham’s law are quite similar.

Gresham’s law – “Bad money drives good money out of circulation.”

Ebay’s law – “Bad graders drive honest graders out of Ebay.”

dorkkarl

you should of gotten that coin doctored, & i don't care what the coin posse says, they can bite me. that coin could EASILY have been recolored & put in a slab if you so desired.

K S

ajia

Graded coins are the name of the game.

Sure, raw coins are nice for albums, but the registry has the 'big guys' buying only graded coins. So PCGS & NGC coins only. Any problem coin are avoided like the plague.
There have been a few discussions here about problem coins.

I listed many very nice unc. Morgans on eBay with nice pictures to show the nice condition. I'm no grader, so I listed them as Unc. Only.
What a mistake. Hindsight is perfect & I see now that I should have said MS64 or 65 or whatever to get the money these coins were worth.

Do we need to inflate the grade to get the money the coin is worth? If we value money over integrity....yes.

As for me, we have weekly swap meets at the City College that I might peddle these (relatively) low cost raw coins at.

NJCollector

Similarly, The bulk of my collection cosists of raw coins in Dansco albums. The majority of times, I find that the coin I purchase on Ebay is 1-2 grades below what it is listed at. ie listing as F+ is usually G to VG. However, I also place my bid accordingly.

As a result, I can usually get a coin at a lower grade at a fair price for that grade. Once I purchased a V Nickel listed as VG. It turned out to be XF. That was by far the exception.

More typically I can get a G to VG coin at below FMV. For certain dates for certain types, that is OK with me. Especially, where the market price jumps significantly between grades at the low end of the scale.

That's not to say that if I came across a seller who consistently graded his coins fairly I would make these same assumptions. I would not. I would then take the seller at his word going forward and bid accordingly.

Barry

Just ask Ernie to supply the grade.

dorkkarl

another point, for all you dudes who keep clamoring about how you'd never sell a raw coin on ebay, etc etc, doesn't look to me like slabed coins do all that fantastic either. seems like a lot, especialy of common stuff, closes well under retail levels.

K S

ARCO

I put up large scans and give my honest opinions of the grade. My auctions tend to do quite well because of it. Serious collectors KNOW how to grade their series and it only hurts the sellers credibility to overgrade. I have even had some coins I graded sell for the price of the next grade up. Would it matter if a seller put up an auction for say a VF coin, with a huge scan and called it a VG? It would still sell at the VF prices because knowledgeable collectors know what they are looking at when the scan is big and clear enough.

Because of overgrading there are a number of Ebay Sellers I won't even waste my time opening their auctions or buying from them, so I believe it definitely hurts them.

Tyler

Russ

<< <i>doesn't look to me like slabed coins do all that fantastic either. seems like a lot, especialy of common stuff, closes well under retail levels. >>



eBay is no different in that respect than any other venue. Common slabbed material brings common money. I doubt very many, dealers or otherwise, are getting "retail" for common stuff anywhere. At least the honest ones aren't.

Exceptional or hard to find graded material still does quite well on eBay - up to a point. eBay is not really the place to sell coins in the upper stratosphere of value, but nice material at say $5000 or less does just fine.

As to the question originally posed in this thread; I think sellers who have been at it a while and built a reputation can still get reasonable money for raw stuff, even when grading honestly. Not always, but most of the time.

Russ, NCNE

anoldgoat

As far as raw circulated coins go I have never given a grade, just a high resolution scan that folks can zoom in on. I do point out problems, sometimes I get burned and sometimes I do quite well. Overall I am fine with being as honest as possible as I am also a collector.

I'll also point out that I have received a few grossly overstated (only one was worth returning) coins and also very under graded coins. I think I'm way ahead in this dept.

Mike

AboutRareCoins

We have something of a canundrum here. Faily graded uncertified coins often sell below fair market values on ebay. This is not goog as it desuades many dealers and collectors the venue to sell their perfectly acceptable coins at a loss or no profit. It is also not good for ebay. Being mindful that ebay has thousands of categories, perhaps the folks there care little about the potential business loss in the coins and currency category, but I doubt that. If the C&C category represented only 4% on their total business that is still a significant chunk of money.
Who knows what the solution is? Perhaps this internet venue will go full circle and move people more and more back into coins shops and coin shows. Time will tell.
I've always been one that believes that customers like to sqeeze the tomatoes before buying, and shops and shows certainly provide this opportunity. People like to do business with people they like. It's hard to get that kind of relationship on-line.

Having spent 20 years in the grocery industry, I remember all the talk that people were going to give up shopping the markets and begin buying products on line. I reasoned and many others did too, that these grocers were a bit smarter than the analysts, as there are still thousands of grocery stores doing quite well doing business in brick and mortar buildings. Why, as unpleasant as grocery shopping can be for some, many people still want to pick their prodicts out themselves.
I feel the same holds true for "good" coin store operations that treat their people fairly and respectfully and carry a descent inventory. People want to visit, look around,visit with the dealer and customers and,pardon the expression, squeeze the tomatoes. As to certificaction, I like it, especially on better material. However, the cost of certification just adds another layer of cost to the on-line seller that must be absorbed by the buyer or if the item doesn't sell the dealer/collector. What is the bottom line to this? Divesification! Sell your material in all venues. The grocers found out that on-line purchasing added an additional service level and sales opportunity, nothing more. Anyone remember Homegrocer.com., they weren't diversified. As to overgrading to get a fair price, whose fault is that. The dealers? Lord knows some do it. However, the way I read the string, it sounds like the market is forcing dealers to take advantage of the buyer because the buyer is trying to take advantage of the dealer by picking him off. Dealers it seems, even the reputable, are forced to inflate grade so they can make a profit because some buyers don't know how to recognize value when they see it, but thats only my opinion. My recomendation to the market, buy a good grading book, learn it, don't rely on the price sheets so much, much of the more esoteric denominations and types are undervalued relative to what the real market price levels are anyway. Give both sides the opportunity to benefit.
That's what I think.

Dog97

I grade my raw coins properly, describe them properly and show a good enough picture to verify the grade and usually get a decent price for them. Just cheap stuff though, less then $100.
I think the reason I do well is because I write free shipping, no reserve, start @ 1¢ and no questions asked return policy all over my listing though.

dorkkarl

in fact, i think that raw coins are frequently liable to bring higher than retail prices - if they're at the cheap level of the spectrum. it seems to me that the best low-risk (but low-margin high-volume) way to make $$$ in coins on ebay is with the really cheap cr@p. for example, i doubt you could sell a holed bust quarter for more than what you'd get on ebay.

to your original question, "Is it in eBay sellers' best interest to overgrade raw coins?", i doubt it really matters, provided you give a decent digi-pic & return policy. much of the bidding that goes on is impulse bidding anyway.

jmho

K S

catfish172

<< <i>However, the way I read the string, it sounds like the market is forcing dealers to take advantage of the buyer because the buyer is trying to take advantage of the dealer by picking him off. >>



A large majority of buyers on eBay equate auctions with bargains. They are out to pay as little as possible. That makes it hard for sellers to make a profit on anything they list. I don't believe it is the "norm" that good dealers intentionally overgrade coins. I think it more a testament to their grading skills. They actually do think they have better than they have. That is where you have to be careful. Like earlier in the thread, if you know a particular seller is consistant with his or her overgrading and you want the coin just bid accordingly. On the other side, bid fairly for those dealers you know or have come to know that grade theirs more accurately.