Do You Think You Can Buy Coins cheaper from a Dealer than in Auction ?

STEWARTBLAYNUMIS

I occasionally sell coins although I consider myself primarily a collector.It seems every time I offer a coin to a collector they try and chisel me.However these same collectors regularly pay moon money for similar coins in auction.I believe this is why dealers regularly put their best coins in auction.
What do you think?


stewart

morgannut2

Part of the problem is auction fever. Part of the problem is internet bidders. Some can neither go to auctions and see how bad some coins are, nor can they see the dealer coins, ie. they're isolated. I know, rather than think, I can usually buy higher quality material from a top dealer. Experience has thought me that what looks like a deal at auction, generally isn't verses the dealer's coin at the retail price. The exception is the true rare coin that just isn't commonly found in any inventory. In that situation, I always get a dealer's second opinion, and am willing to pay for it. Lastly in circulated Morgans, I've bought many raw ones at a fraction of what they sell for at auction, from dealers who know what I want and just want to move some lower value inventory taking up room/sales time. When I do make an offer, I try to say that that's what I think a coin is worth, and am not trying to be a chiseler. There are different opinions, on every different coin--just a fact.

joeyuk

I don't think so. When a dealer puts a price on a coin he takes alot into account, overhead, advertizing, balencing of possible loss on other coins etc. At a no reserve auction the price is set by supply and demand. If you know your prices and have a little discipline you should not over pay.
Just compare Coin World prices advertized for slabbed coins with e-bay prices realized.
Just my opinion. Joe

RYK

Previous interactions aside, if you offered a coin to me that I was interested in buying, I would pay you whatever you asked. I know you to be an advanced collector and a collector's advocate, and I expect that the price would be fair. Similarly, when I purchase a coin from a dealer, and I buy 90% of my coins from one of three trusted dealers, I generally do not dicker on the price and pay whatever it says on the invoice.

Several possibilities:
1. The folks that you are dealing with are chiselers and perhaps not representative of coin collectors out there.
2. The coins you are selling are very expensive.
3. The coins you are selling have limited pricing data (pop tops and the like) and the collector does not know what they are worth.
4. The collector really does not want to buy the coin and is using the negotiation over the price to say he/she does not want it, rather than offending you by saying he/she does not want or like the coin.

I am not sure that dealers necessarily regularly put their "best coins" in an auction, but you might know better than me.

Interesting topic. I hope to see more responses.

Robert

BAJJERFAN

Its been stated here any number of times by some posters that they don't always care if the recover their "investment" when or if they sell a coin in order to upgrade. I think many have the impression that most collectors feel this way and its possible they are testing the "fast nickel is better than a slow dime theory". Personally I'm mindful of what I "have in it" and at least try to recover my investment.

IrishMike

Stewart, I have found that if you shop wisely for the coins that you really want to own, you can usually buy them significantly cheaper from a dealer or even on Ebay for that matter, than you can in an auction. As an example for a few years I was buying proofs from 36-42, mostly those is the highest or higher graded catagories. For part of this time you could sneak under the demand curve and buy them at prices you could comfortably expect to bring you a profit on down the road. Well demand picked up and I soon discovered that I could buy them less on Ebay and from dealers, sometimes as much as 15-20% discounts.

I'd rather pay less than be able to brag that I won an auction lot and quietly sell them over time at significant profits.

Trime

Sometimes yes , sometimes no.
The key to auction purchases is to have assessed the coin offered at an auction as carefully as you would from a dealer. Know your dealer. Quality, quality, quality!

ibzman350

Haven't dealt with any of the "big" dealers but I find the smaller dealers on this forum, that I have dealt with, will get me better deals then at auction.

I get into the auction frenzy and always overpay.



<< <i>
I'd rather pay less than be able to brag that I won an auction lot and quietly sell them over time at significant profits. >>




I just sold my first coin to a fellow board member, nothing fancy, a low grade slabbed coin...but I did make a 50% profit. I know 50% ain't gonna happen all the time, but if I can make10 to 12% on my money, I be happy.


Herb

STEWARTBLAYNUMIS

I totally agree with ibzman.Auction fever almost always sets records,buries buyers,raises prices and has created a new mentality for collectors known as pop tops,common coins in uncommon grades.I have almost always done better buying from dealers.I remember 10-15 years ago calling dealers regularly,having a productive rapport and always finding wonderful coins advertised in Coin World.Now it seems everything is on-line,sometimes shilled,sometimes reserved for too much and regularly sniped.
I personallly liked the good ol days better.

stewart

ziggy29

These days, yes -- at least for the type of coins I've been seeking in recent months. Most of my purchases now are direct from dealers. They aren't usually cheap -- after all, they do need to make a profit to stay in business -- but are more often than not reasonably priced compared to the "stupid money" being bid up for coins from relatively unknown sellers on eBay, Teletrade and elsewhere.

I wonder how much different the bubble and crash of '89 would have looked had eBay been in the picture.

DHeath

At auction, you have the opportunity to outbid and compete with every expert, and the occasional idiot.

Barry

I have found that if you shop wisely for the coins that you really want to own, you can usually buy them significantly cheaper from a dealer or even on Ebay for that matter, than you can in an auction

This has not been my experience, but perhaps it's related to the coins I am looking for (primarily rare coins in circ grades). For example, auction is over. About a week later, I peruse some dealer web sites, such as DLRC, HLRC and Teaparty, as they tend to carry the coins that interest me. More often than not, many of the coins that were just auctioned appear on these web sites at a significant premium over the auction close price.

Where are the bargains coming from? Where do dealers get this inventory? Do you agree it applies more to common coins (irrespective of grade) rather than rare coins?

STEWARTBLAYNUMIS

I believe the term "rare coin" is an oxy moron when it pertains to auctions.1804 dollars,1894 s Barber dimes as well as 1913 Liberty nickels.Everything is regularly being auctioned these days.I would say that auction companies make an average of 15% on each and every coin they sell.Consignors can make anywhere up to 5,000 % profit on a low pop common coin.If a dealer quoted you the auction price realized before the auction he/she would be shot.

Stewart

lloydmincy

Stewart, you've never offered ME anything!!

"Everything" is being auctioned now because the market is HOT. It's a sellers market right now, and the auction houses make their big bucks during these times, like the mortgage companies make their money when interest rates go down...

maybe the "good ole days" of relationships is not as close ONLY because dealers only have so much time, and in this bull market, MORE and NEW collectors and clients are demanding their time, and they only have so much to give.

-----Lloyd

dthigpen

If I could buy a coin from a dealer that I knew and trusted, I would always choose to purchase from him/her rather than an auction house - price isn't an issue with this. My only problem is that I'm a bit of a 'specialty' collector and there aren't many dealers who actually carry the kind of merchandise that I am often looking to purchase, so I have to resort to scouring auction houses and ebay for the items.

lloydmincy

I don't know what the better deal is. If I was a dealer and wanted the most for my return, I would sell my big stuff through auction. Now I sound like I am stating the best deals are NOT through the auction houses.


I have a pretty good idea what I like is going for, except for the "bigger" rarites. I will bid the prices CLOSE to what old prices realized were, but if the RESERVE is too high, I look away. I have a couple dealers looking for stuff I want, but it is material that rarely shows up and so far, no calls!!!

Lakesammman

Concept is too vague. Key is to know the value of the coin and take advantage of a good deal wether it's offered by a dealer or at auction. I've over and under payed both ways.

Stewart - are you inferring that YOU don't chisel??

mgoodm3

Depends on the coin. Lower priced, more common coins in an auction don't get a lot of action and thus may go for a low price.

morgannut2

I wish I had TDN's discipline at auction, even if he claims to overpay sometimes. One guideline to help is watch what some dealers and wholesalers do bid at auctions on coins you may consider in the future. But that's only good if you spent the time to preview the lots and improve your grading and evaluation skills, so you know WHY they're bidding.

michael

Sometimes yes , sometimes no.
The key to auction purchases is to have assessed the coin offered at an auction as carefully as you would from a dealer. Know your dealer. Quality, quality, quality!

-------------------------
Trime

i agree with trime he sums it up well


michael

STEWARTBLAYNUMIS

Lloyd - Do you consider yourself an investor or collector? I have never really met you other than at auction when you were bidding against me.How can I offer you coins if I don't know what your wanting to buy or exactly what it is that you collect?
I also believe TDN purchaased most of his coins privately through Legend.

morgannut2

I do not presume to know ALL OF what TDN owns, except that which is public in his excellant $1 collections. He has stated recently however that be bid on several examples, here on the forum, where he was outbid and gave the disciplined reason in one case why he didn't continue. So he was active in a recent auction, but what do I know.

TUMUSS

Auction in most situations.

tradedollarnut

It is best to buy the majority of your collection privately and fill in what you are missing at auction.

The only way to buy at auction is to understand you are going to have to overpay for what you need and to pay up for the best coins. But you also need to have a feel for when there is no market beyond yourself in order to lay off if you're being played... otherwise you won't be able to buy anything privately - it will all be put into auction with a stiff reserve.

It is possible to value play for coins that might slip thru the cracks but these are few and far between for top level items. Most of the time, when a collector value plays, he buys substandard coins that are no bargain at all.

Bidding at auction costs you money.... period. If you don't bid, the coins will most likely either not sell or sell for a few increments less. By bidding, you raise the market not only of the coins you win or don't win, but also for every comparable coin you want to buy.

RYK

TDN,

Great post!

I especially agree with Most of the time, when a collector value plays, he buys substandard coins that are no bargain at all.

Most of the times I thought I was getting a rip, it was me that was getting ripped.

Barry

Following TDN's line of thought, does it make any sense for a cellector to sell to a dealer rather than to sell via auction, where the prices realized are higher?

lloydmincy

Stewart, I mailed you a message.

Barry, good point. I have little experience buying from dealers, but the coins I DID buy, they recently had won from an auction, and I paid a bit more to get it from them. The coins I like, are RARELY some new find and the dealer just happens to have it. Or I don't know what dealer may have what I am looking for. I know Andy Skrabulek (sp) is a buffalo nickel and lincoln cent specialist. I think he is a great guy, and knows about every coin in his arena!! (like Stewart!). But I also know, he is at the auctions when the "hard ones to get" are offered. And I am sure I am bidding against him...


----Lloyd

morgannut2

" Bidding at auction costs you money...period". I agree in part with TDN's approach, as I said already I've learned through hard experience that it's better in the long run to buy a top coin from a top dealer, than save a few "apparent" bucks on what usually turns out to be second rate material. But lets change TDN's statement to " WATCHING the bidding (after preview) always saves you money...period". This gives you the collector the opportunity to recognise a quality coin when it's offered to you by a dealer, or privately on the forum. The exception is that one pop 5 or 10 coin that you've searched high and low for, and like magic it shows up at auction. Here it's having the pure discipline to 1)evaluate the coin, 2) set a maximum that you think this particular example merits, and 3) getting the advice of someone you have confidence to give a second opinion. So yes you can buy most coins cheaper at a dealer because they are better coins in the long run!

roadrunner

You can buy great deals both from your dealer and at auction. It varies. I've gotten far more many rips from local dealers than at auction.

With two or three rare exceptions (thanks Bustman), I've almost never, ever, never, ever, get good deals from other collectors. Not even fair deals. They either prefer to start with taking a shot at me or decide to go right to their favorite dealer and get less for the coins in question. I've never quite understood it. Bottom line is that 99% of what I purchase is from other dealers or at auctions. Buying from collectors is essentially an impossibility. The reverse is nearly true too. 95%+ of what I sell is to either dealers or at auction.

roadrunner

tradedollarnut

The reverse is nearly true too. 95%+ of what I sell is to either dealers or at auction.

Yeah, but that other 5% can be quite nice - eh? [my 1870 - purchased from roadrunner]

coinkat

Beautiful coin TDN... I really like this one and not to cheapen the moment, this is the type of coin where the grade on the plastic really does not matter.

As for the question, it really depends on what you are looking for and how much grade/condition matters.

jacktheknife

Stewart,

I don't know why you bring our business to a public forum! I have told you time and time again, $30,000 for the 14-D in 66RD and not a nickel more. Guess I'll just have to keep paying "moon money" at auction


Jack

jdimmick

I think some coins can be purchased at a major show for a little better price than by buying at auction. However, usually if your not the first to see it, you wont know that it was ever for thier for sale. Many of the best coins, especially if nice, dont last at all on the bourse floor. In fact, many never actually make it to the bourse floor and are scouped up during behind table transactions by other dealers.

The auctions make an even playing field, giving everyone a chance to become aware that a specific coin is coming available and the chance to compete for the coin. This basically creates scenarios where its who is willing to pay the most to obtain it, and many times this leads to super strong prices!

jim

BAJJERFAN

In this case part of the bidding frenzy likely comes from the fact that you are biddng against some of the top dogs and if the best coin eye in the biz wants it then it must be extra nice.

roadrunner

TDN, you're an exception to some of the thumbrules I mentioned. You have the knowledge and market saavy equivalent or better to most dealers. Your position in the market is pretty unique. And as far as that 1870 dollar went, I was a very reluctant seller.....until you made me an offer...........I could not refuse.... (godfather music follows).

roadrunner