How much does it REALLY cost to become a coin dealer?

MrEureka

We've been giving GregTheGreat a rough time for the way he's going about starting his new coin business, but the truth is that there's no reason he can't make a go of it on a shoestring budget. I know because I've done it. So let's not scare off any wannabe dealers.

Here are just a few key Q & A's:

Q: How much capital do you need to buy and sell like a dealer?
A: There's no reason you can't do plenty of buying and selling as a vestpocket dealer with as little as $1000 in cash and coins.

Q: Do I need to take tables at coin shows?
A: No, but it's probably a good idea to take some tables once you have inventory worth 100 times the bourse fee.

Q: Where can I make money other than at coin shows?
A: eBay, local coin club meetings, local coin shops, flea markets, auctions, BST Forum, and almost anywhere else you look if you keep an open mind.

Q: Is it realistic to think that I can start small and become a successful coin dealer?
A: It's like any other business. If you really love the work, you'll work like a dog and success will come naturally. If you don't love the work, you're better off giving up and trying something new.

Any more questions?

tradedollarnut

How much does it REALLY cost to become a coin dealer?

Here, I'll beat them to it: Just your soul...

MrEureka

Here, I'll beat them to it: Just your soul...

Well, maybe, but at least you can work the float until the bill is due.

kieferscoins

Q: Where can I get free supplies since I'm trying to save every penny for my inventory.
A: The YN table gives them away along with a redbook, but you gotta be 18 or under.

Cameron Kiefer

bearcave

<< <i>Any more questions? >>




Can I borrow a $1000 to get started??

coinguy89

I wanted and still am wondering what it would be like to become a part time coin dealer aside from whatever other job I seek while say in college. I think it would be fun, I think what Gregthegreat is doing is cool, maybe to some his attitude is alittle off but it would be a fun dangerous experience. Buying, selling, moving, you would gain quite abit of experience, get your name out, make money(or lose), get to hold some nice coins, help out the hobby, add pieces to your collection, and have fun. But I think it wouldn't cost too much in a way, any of us on here are a coin dealer if we sell something to someone else, aren't we?

MrEureka

But I think it wouldn't cost too much

Scott - You are correct. In my first two years as a bourse dealer, my total business expenses were less than $3000 a year.

oreville

I was a vest pocket dealer in 1973 -1977. I advertised in Coin World then. Did shows from New York to Indiana.

My impression. Being a dealer has a 50-50 chance of killing your love of collecting coins as a hobby.

That is why I am so impressed with many dealers who can manage to do both because I had quit because I saw that the administrative aspect of being a dealer plus the "need" to turn over inventory conflicted with my desire to collect, keep, learn, and enjoy the hobby itself.

Beware of becoming a dealer. A lot harder than you think! It may destroy your love of the hobby itself!

100proof1957

Vest pocket dealer would be about 10k,I took about 5k in cash plus coins to every show in 89-90

Brick and Mortar ? likely 50k plus !

I'm in the auto parts biz as an outside salesperson for a nationwide company,as such i have no investment in inventory but i am expected to treat the biz as my own,i need to grow the biz to make my commission !
Even with no inventory i still require ready cash for day to day expenses !

Wanna talk about selling your soul ?
My day begins at 5:30 am and its rare that im home before 6-7 pm
i drive 3000 miles a month,talk to about 15 customers a day and deal with all manner of weather !

Proof

ziggy29

<< <i>My impression. Being a dealer has a 50-50 chance of killing your love of collecting coins as a hobby. >>

After moving from California to Texas last year and selling that Silicon Valley real estate, I was put into a pretty blessed financial position where I could probably take the plunge and be at least a part-time dealer at first if I were so inclined. But it was this more than anything that made me decide not to do it.

Right now, the thought of making extra money by buying coins, writing about coins, photographing coins and having possession for a least a little while of a lot of cool stuff seems seductive and wonderful, like "living a dream." I'm just not convinced it would stay that way if it became a "job."

Having said that, there's no one I envy more in the world than people who truly love their work. The best thing I can say about my current job is that they overpay me enough to buy some pretty decent if not extraordinary coins.

FrattLaw

I certainly think it can be accomplished on a shoe string. If Apple, HP, & all most every other business ever started by anyone, certainly it can be done in the coin biz. To think otherwise is merely elitist. Granted Greg or anyone else doing it a shoe string will have a much tougher time and be more prone to failure, it can be done. As long as you are willing to trade your time and effort for the money you lack. Study, buy the books necessary to learn varities. Cherry pick other dealers, specialize in an area where others are lacking.

To a certain extent I agree with his approach of finding a niche and exploiting it. So what if other dealers catch on, change your niche. Revent your business when necessary. Stay ahead of the more established dealers.

I would think that for as little as $1000-$2500 you could buy enough inventory to set up @ a show. I've seen dealers @ LB with not much more than that in their cases. I would imagine at a little show you could $500-$1000.

Michael

UncleWiggly

From what all was posted, GregtheGreat wants to be a coin dealer because he needs the money and wants to be one anyway. He definitely seems determined to do it, so I hope he makes it. Besides, I don't really know how critical his financial situation is. It could be now or forget it forever.


Jerry

Stuart

Although I am not a coin dealer, it seems that if I were going to make a start of it the thing that I'd invest most in is knowledge.

I would try to specialize in a series or a couple of them that were interesting to me, and that are popular enough so that my inventory would have sufficient liquidity. I would also stick with classic coins because they are what I like, and there's a consistent demand for them.

I would not waste my time and money on penny ante items, but would specialize in certified (PCGS & NGC) coins worth at least in the $100-$500 price range so that I could make $20-$50 per coin assuming between 10-20% margins (20% on low end and 10% on higher end).

I'd also use that knowledge to cherry-pick raw coin purchases such as VAM variety Morgans and MS-64 $20 Liberties for certification.

Just a few thoughts of mine. I'd be interested in feedback from some of the professional dealers...

relayer

It depends what a "dealer" is.

If the definition is someone who buys and sells coins for fun and for profit, it doesn't take much at all. You can start with as little as one coin and eBay.

If you want to become a professional dealer as a full time endeavor it would vary based on your business model.

The most important aspect is what is your competitive advantage?

Are you an expert grader that can spot upgrades a mile away? Can rip walk-in’s looking to sell coins? Will cross stocking your store with teenage collectables bring in business at the new mall? Do you enjoy selling retail and talking with people, or would Internet and mail order selling be better for you? Are you an expert in a certain series?

If you don’t have a competitive advantage, you’re just bringing more widgets into the marketplace.

stman

<< <i>We've been giving GregTheGreat a rough time for the way he's going about starting his new coin business, but the truth is that there's no reason he can't make a go of it on a shoestring budget. >>



Agreed, and I might have given him a hard time as well. I guess I'm from the old school that you WORK for the money you need. This forum is very generous at times and don't think he doesn't know this. Spending 3 hours on the Internet begging for a hand-out is ridiculous. He could have went out and tried to earn the money, but instead sat on his Probably fat behind and defended not wanting to spend the money he already has on flips.

I'm self-employed and I sure hate spending my money on gas going to different jobs. My point being.... to be self-employed sometimes means to inconvenience yourself and work two jobs to be successful. I did it for many years. BUT, I guess it's much easier to come on an Internet forum and beg for money, coins, supplies etc. The odds are a few are gonna give to him which it worked. I really feel if he would have used the YN angle he would have had many more donations. Am I being grumpy? You might think so but I've never been handed a thing, and I'm certainly not going to feel sorry for someone that is trying to con a easy living, and might have some ideas, but not willing to go out and sweat to achieve these ideas.

Murphy

WHAT is a BOURSE???

Garneteye

stman

relayer

<< <i>WHAT is a BOURSE??? >>



It's a term used for the floor of a coin show.

It's a French term used in Europe for stock exchanges.



I agree with stman. Admittedly I haven’t read all of GregTheGreat’s 3000 posts, but other then contests I’ve only seen him post asking for donations – and some PM spamming.

Greg – even though the only good kind of borrowing is for investment, don’t use any credit cards to buy things for your show. Get a part time job to raise funds and stay free of debt.

coinbuf

<<I would not waste my time and money on penny ante items, but would specialize in certified (PCGS & NGC) coins worth at least in the $100-$500 price range so that I could make $20-$50 per coin assuming between 10-20% margins (20% on low end and 10% on higher end).>>

This would depend upon the show and type of customer that attends. I did a local show today for the first time and filled my case with nothing but NGC/PCGS slabs most under $500. What did I sell.. not one slab, instead I sold a cleaned 78CC Morgan, half a roll of junk silver and some proof/mint sets. Foot traffic was very light at this show but I made the mistake of not taking the low end raw material which is what was selling.

Chris

TheNumish

I think the money is really secondary. The trick is to know what your doing.

DHeath

The trick is to know what your doing.

Smart post. Why not take a job working in the industry and making contacts before launching your own venture?

eyoung429

<< <i>How much does it REALLY cost to become a coin dealer?

Here, I'll beat them to it: Just your soul... >>



How much would I get for mine?

Coinosaurus

Maybe another good question is, how much does it really cost to become an astute collector?

I'm gonna say I probably made about 15K in really crappy purchases before I got the hang of it.

I could make up a healthy chunk of that by cashing out on just ONE coin now, so I don't feel too bad overall

MICHAELDIXON

After going in the Army and transferring to Hawaii, I started with $200. to purchase coins with and about $50. for swap meet fees. I called my friend, Paul Pons at Louisiana Coin Exchange and asked him what he thought I would be successful selling to start with. I bought a roll of buffalo nickels, mercury dimes, liberty nickels, several silver dollars, several proof sets and didn't have much at all. I was a newlywed and my wife told me not to be disappointed if I didn't sell anything. The first swap meet day, I sold $563. and I still cherish that sales list I keep from that first day. The people knew I was just starting and wanted to help me succeed. That first day, I sold 90% of my inventory and bought several sets, etc that I was offered and resold. I wasn't totally new to the coin market, as I had done shows and been a vest pocket dealer. But...I had zero inventory, because I sold it before I left for Hawaii and paid off bills.
.
Today, I believe if you are smart, you could start with $500. and do well. The key is to buy inexpensive coins and sets which are always popular. Buy them in collector grades, Good to Fine, and don't worry about getting into slabbed coins. Make a few friends who are dealers, such as JB, WayneHerndon, Coinguy1, etc, who will throw you the coins which don't fit into their inventory. I know several dealers on the boards send collections of circulated coins my way and I really appreciate it! AND make a friend who will place coins on consignment with you.
.
To me, there are three types of dealers:
1. Small dealers,
2. Dealers and
3. Large Dealers.
.
As with anything in life, you have to start small and work your way up. Wal Mart didn't start out as a supercenter. Sam Walden started small and worked his way up to what Wal Mart is today.

100proof1957

I asked Greg how old he was in another thread and got no reply.
I suspect Greg is a YN,he may have some good idea's but he may have bitten off more than he can chew !
Of course if he has a couple hunnert bucks invested it will be a very valuable lesson.

coynclecter

So the coin dealer says to the devil, "I want to be the most successful coin dealer in the world, I want to handle all the great coins and I want everyone to come to me to sell the great rarities."

So the devil says, "then I want your soul, the souls of your children and all your families souls for generations to come, they will all burn in hell with me"


The coin dealer hesitates for a second and looks back at the devil. " Soooooo, What's the catch?"

JoeHolt

Dont risk any money you are not willing to lose.


I work a full time AV job to pay my bills
I work all my little side jobs and stuff to pay for my hobbies Coins and Model Trains
I put 15% in my work 401k and max my roth ea year
I play around with day tradeing with money I have made day tradeing (took my start up money out after I made it back) I took some money from my day trade fundsand put to my coin collecting to help get the supplie sales going bad when I pay myself 10% interest on this but I consider it a bussiness and it needs to make it on its own

matteproof

If one lives alone, has little or no expenses, one might be able to do it. However, MOST people are not really cut out to be the pitbull salesman that is often necessary for start ups - especially start ups that are to be the ONLY source of one's income. Under capitalization of any business is a kiss of death. It's like coming up to bat with two strikes against you. Failure rates are very high. If a person has ongoing expenses that they need to fulfill (a wife, kids, mortgage, rent, car payments, blah blah blah) then a 1k start off is not likely to make anyone more than a few hundred bucks even under the very best of circumstances. Will expenses eat up working capital? Expenses in business are always present and the cash burn rate can be breathtaking.

One can't make mistakes! One bad purchase coupled with a subsequent sale at a loss will devour capital faster than you can say Greysheet. Unless someone is working out of a fully paid bicycle, they will have expenses. Even a vest pocket dealer has car, gas, tolls, not to mention Pizza Hut bills to deal with. These add up.

The profit is in the buy. Successful traders in every field are usually smart aggressive BUYERS and calm rational Sellers. If a person buys right (low) chances of success are greatly enhanced (though still not assured). If a person overpays (don't we all?) they will need PRECIOUS time to pass before breaking even let alone making a profit, let alone make a profit on a daily or weekly basis which is necessary if someone is doing this for a living.

One must learn to leverage their skills and build relationships with big players in the business. Maybe the big players will provide "inventory" to hawk without the person committing to actually buying it? (i.e. wholly returnable without consequence if unsold, consignment type transactions). If they "like" the new guy on the block they might throw a few of these non-recourse bones one's way until one is up and running. If they don't like you, they will treat you like crap and you will be forced to treat them like crap in return, thus narrowing an already thin playing field.

If someone has really big "cherries" they can simply declare themselves "the king of all coins" from day one. If they look the part, and have a great inventory, they might convince enough people and win through puffery. Caution! If someone fails to deliver in this technique they will be ostracized for the rest of their life without mercy. No one will ever take them seriously again.

The numismatic business is one where the PRODUCT speaks for itself. If someone is selling a few crappy Lincoln Cents with an Accent Hair Kennedy thrown in for diversion, they won't be taken seriously. However, if they step up to the plate with jaw dropping offerings that are gorgeous or even ugly but really rare, they are bound to impress some folks who will remember their face, think of them as savvy (even though they may not be) and will return to their table the "next time." Maybe they will buy too. If they do, then a person must make enough on this and other transactions to pay for ALL of their living costs with enough left over to buy more inventory (that is not going to be easy no matter how smart someone thinks they are). A person MUST have a serious inventory and without it, well, they may make a few bucks but they will be hustling hard to merely pay for gas and tolls to the coin show. They may even have to bum lunch from another dealer. For me, I'd rather go fully ready than to start off half baked. That is just my philosophy - inherited from the Boy Scouts. matteproof

100proof1957

What i have found in my line of work over the last 7 years is this.
You must build a relationship with the customer !
If the customer does not like you,price matters not,he wont buy !
If he does,the price doesnt matter either,he will buy !
course we are talking wholesale here,and the buyer is turning merch over all the time.
Ya gotta be a people person !