Will you get a better price on a coin if a dealer negotiates price for you?

IrishMike

I hope this isn't controversial, but if you see a coin for sale that you would like to purchase and its expensive, let us say over $25K and you do not know the dealer, can you buy the coin cheaper if you have a dealer you know attempt to purchase it for you? Is this ethical in the business and is the dealer either obligated to tell the other dealer he is purchasing it for a client or do they just assume that he/she is? I ask this question because I do not enjoy haggling over price.

longtimecollector

Unless the dealer acting on your behalf is a family member, expect to pay an additional markup.......... Not a good idea IMO

Fairlaneman

<< <i>Unless the dealer acting on your behalf is a family member, expect to pay an additional markup.......... Not a good idea IMO >>



Huh ? Why not ?

If you have a good relationship with your dealer it appears to be a good idea and has been a successful idea for myself. Of course the coin that worked for me was not a 25 grand coin. My guess is that both dealers made some money and for sure I saved some money.

Ken

coinguy1

<< <i>but if you see a coin for sale that you would like to purchase and its expensive, let us say over $25K and you do not know the dealer, can you buy the coin cheaper if you have a dealer you know attempt to purchase it for you? >>

Sometimes you can indeed get the coin for less. It depends upon a few factors such as:

1) What your relationship is with the owner of the coin (how good of a price he will quote you in the first place)

2) What type of discount the seller might be willing to extend to the other dealer working on your behalf (sometimes a seller will extend a nice discount to another dealer and other times not - this often depends
upon the margin the seller has built into the coin, his relationship with the other dealer, etc.)

3) What type of margin the dealer working on your behalf is willing to work on - in order for this to work for you, the dealer working on your behalf must be willing to work on a margin that is less than the difference quoted to you by the first dealer vs. what is quoted to him by the seller/owner.



<< <i>Is this ethical in the business and is the dealer either obligated to tell the other dealer he is purchasing it for a client or do they just assume that he/she is? >>

I believe it is ethical and I have been on both sides of such transactions. If the dealer/owner asks me if the coin is being bought for someone else I will tell him, though I wont disclose for whom.

Good questions!

IrishMike

In my business I have clients, other lenders, business partners who really are the life blood of my business who refer customers to me. They very often if its possible get somewhat a better deal from me then otherwise. Its just good business sense for me to do so. A little bit of something is better than a whole lot of nothing.

mrearlygold

<< <i>In my business I have clients, other lenders, business partners who really are the life blood of my business who refer customers to me. They very often if its possible get somewhat a better deal from me then otherwise. Its just good business sense for me to do so. A little bit of something is better than a whole lot of nothing. >>







Bingo!

Tom

Proof

I have used this method a couple of times and it has saved me thousands. There are a few dealers known to be very high in pricing ALL of their inventory, and even their repeat customers do not get much, if any off of their inflated prices. Let me give you a specific example. A coin at dealer A was advertised for $39,900. I called my favorite dealer, B, who obtained the coin from dealer A and only charged me $700 for doing so. My final cost for the $39,900 coin was $35,700. These are actual numbers from a tranaction three years ago. There is nothing wrong with this approach and the dealer, B , who I used is well known and known especially for his INTEGRITY. Dealer A, for some reason, hardly ever comes down from his inflated advertised price, mostly because he does have some super rich clients who do not bother to negotiate. My $39,900 coin was in his inventory for a couple months, so I guess his big bucks clients did not need it. Dealers sell to each other at a discount, so I have and will use this procedure again. It is totally ethical and in this one instance it saved me $4,000. I wish I had used this approach a long time ago. It worked for me several times, and I am talking coins over $20,000, where it is especially rewarding. And I repeat that I used this approach only with dealers KNOWN for their inflated prices.
My favorite dealers do not overprice and DO NEGOTIATE !!

RYK

Ultimately, any dealer who buys a coin from another dealer is buying it for his own client, whether he has identified the client or not. There should be no ethical problem with this type of transaction. Additionally, if your dealer has no risk in the coin, you are likely to get better pricing, I would imagine. I have brushed up against it twice:

1. I wanted a coin from Dealer A and asked my dealer, Dealer B, if he would get the coin for me. Dealer B told me that he generally would have no problem with such a transaction, but he does not like to deal with Dealer A. I passed.

2. Dealer C had a coin (#1) that I was considering. Dealer B, my dealer, had a coin (#2) that Dealer C REALLY wanted for a client. Dealer B was willing to buy the coin (#1) for me, as it would help facilitate the deal for coin #2. Dealer B checked out coin #1, did not like the coin, and I passed.

Reece

This just happened to me, and I think going thru your dealer associate is the ONLY way to go, the dealers all have a system they follow. I saw a great coin on a dealers web site, a coin that the dealer really did not specialize in and had it priced at 25500.00 way way to much for the coin that the dealer had little background in, I waited for a couple of months, because I knew that he would not sell the coin, and called my dealer associate, he looked at the coin at a show and liked it and told the dealer if the coin was REALLY for sale that he had a client that would be interestein it. My dealer waited for another two months and the dealer called out of the blue and offered the coin to him for 16000.00 and sold it to me for 17000. I know that if I had to deal with dealer A I would NEVER have bought the coin so reasonable. The dealers are always doing things for each other, the honest ones anyway, and maybe my dealer was owed one favor-but to my benefit, I think that is way I just stick with one dealer who I can trust.!!

roadrunner

I had a similar occurrence in 1988 when buying a pop top rare date seated quarter that appeared for sale in a CW ad. I knew the seller probably had the coin for 6 years and was choking on the coin. It had fallen to 30% of its value to boot. I felt I could get the coin cheaper and like Irish Mike just hate negotiating with sellers directly.
I have a habit of giving up the farm any ways. My dealer gets a 10% price reduction and charges me half the difference. I saved a $1000 and my dealer made a thousand bucks. And there was no way I would have been able to get that discount from the seller. Unfortunately I had to sell the coin 4 months later but made $4K on it.

win-win.....lose.

roadrunner

morgannut2

First: the major concern you should have is NOT the price. Unless you graded for PCGS/NGC, it's stupid not obtain at least
a second condition report!

Second: It is highly unethical to first dicker over a coin, and then ask another dealer to negotiate and/or give an opinion. WHY?
It places your dealer-agent in a terrible position with the first dealer who he has to do bizz with in the future.

Third: If you see a coin and know the asking price, I would expect any good top notch dealer to negotiate the price
with the seller and share in part any savings given the time he spent in the transaction. The really important
thing though is a full evaluation of the coin's quality and the recommendation to buy or not.

Would you buy a 20 year old $1,000,000 home without a home inspection and paying $500 for the service????

IrishMike

morgannut nobody has stated that price should be the most important component of a purchase decision. Let us assume that one had done their homework as you have suggested. The only variable left to determine is the price that you are willing to pay for it. Sometimes its very difficult for a nondealer to determine the market for a price. For example I looked at a coin that as far as I can determine was last sold in 2001, I saw the coin at the auction. 4 years later it is marked up 61% and I can find no other records of its sale. A true fact, the coin is unique, no other one has ever been graded. I have no other way of deteriming a fair price except to haggle it, this I prefer not to do.

Sometimes the price is the most important component, there are coins that get purchased by dealers that are fantastic coins but to instantly mark one up 85% is how do I put it nicely, brazen? I know the history of this coin, I know the previous owner of the coin, etc. Please do not assume that we all lack the ability to shop wisely. Your advice is sound but I think you lost the intent and meaning of my post.

morgannut2

Perhaps---no--- my post DID seem harsh. The real point I'm getting at is a dealer is more likely to seriously be dropped

in price if a dealer-agent points out any little problems that we know all coins have. The dealer knows that the buyer knows

his stuff-- so it's then just a question of the REASONS the price is way too high including occasionally the previous auction

or private sales $ amounts. Plus you get additional info to raise or lower your offer as appropriate. I in fact just raised my

bid at auction $4,000 and obtained a rare coin due to information the dealer provided me, so it can work in two ways

in some cases (the inspection fee was if I bought or not and nominal). Sorry to sound rude.

IrishMike

I didn't take your comment as rude, I've been at this for a long time and didn't want this thread to turn into how to buy a coin but only to get some opinions on using a nonselling dealer to negotiate it, i.e. what are the pluses and minuses.

Tone and intent on an online forum is never easy to ascertain and unless I have gotten to know someone they always deserve the benefit of any doubt if indeed there is any to begin with. I always appreciate any input. Thanks.

elwood

Yes, if you have a trustworthy dealer!!

Elcontador

I'd have to agree with the tenor of this thread. There are some dealers from whom I have never bought anything because IMO they are on the high side of retail for coins which I can get cheaper from another source.

Let's face it; unless the dealer really wants to unload the coin, another dealer will be able to buy it more cheaply than a collector. I typically get between 5-8% off initial asking price on a coin. I ask for a best price, and once I get it, I either buy or pass.

Proof

I just want to elaborate that I use this approach only with a couple of dealers. The dealers I am referring to tend to be obviously high on their entire inventory. I do not mind negotiating with my regular dealers, but the ones I am referring to hardly ever negotiate or maybe they knock $100 off of a $40,000 coin.
And if these high priced dealers have a coin I need, I do not approach them, at all, instead I call my favorite dealer and he has the sent coin to him for inspection, to first determine if the coin is all there, which it usually is, and then he negotiates the price with the original dealer.

rhedden

I used another dealer to get a coin chepear last year, but it was not intentional. A coin I wanted was listed on Dealer A's website for $3,500. The coin sold 10 months earlier in a Heritage auction for $2,175. Sorry, but that 60% markup is a little steep, considering that many if not most Heritage auction prices close over fair retail. I offered the dealer $2,400, knowing he had owned the coin for a while, and he basically told me that my offer was way low, and no price reduction was offered. Only one month later, I was very surprised to see the exact same coin listed on Dealer B's website for $2,500. I bought it. If dealer A had just offered me the coin at $2,500, I would have said "OK, close enough" but he decided to hold out for another $1000, so no deal. Then he inexplicably turned around and sold the coin to Dealer B for a price that was presumably less than $2,500! So by holding out and going through Dealer B, I saved $1000 and learned a lot about how Dealer A does business.

Trime

Intteresting thread.
I see nothing unethical in purchasing a coin at the best price the seller is willing to allow.
In fact the seller gets the same amount of $ whether the agreed upon price is negotiated through a buyer directly or through his/her agent ( assuming the agent does not have a side arrangement with the seller).
The concept of wholesale and retail assumes that the wholesale buyer will incur additional costs and expects a profit to sell to a retail buyer. This cost of handling may be smaller or greater depending on the nature and expense of the next transaction. The rest of the concept is fraternity, networking and merchandicing. You have a group of dealers who understand that they are co-dependent to share merchandice to keep the system fluid. Should the nature of the business change and a single dominent company conntrols the marketplace the rules would change. It is the Wallmark effect.

khayse

We've had dealers on these boards say that they will sell a coin to another dealer for less than they will a collector.

Seems silly not to give this a shot on occassion. Especially if the coin is expensive and the dealer's price is high with little
flexibility.

-KHayse

oreville

I once had to make a decision the same day to purchase a coin from a dealer that cost me over $20K. I tried to get another dealer to negotiate on my behalf but the seller became more obstinate and demanded a HIGHER price from him and gave me a one day ultimatum to me after he originally told me I had three days to decide on the coin.

I knew the coin was a "hot turnover coin" (term means a coin that can generate a huge profit in a short term). Does not happen too often.

I decided to buy it at the dealers price. I grinded my teeth but had that good gut feeling. I called the dealer back and he went back on his word by demanding that I would have to pay 20% extra for the coin. I was furious but ultimately agreed to pay it.

I was surprised when I received a phone call from the same dealer offering to buy the coin back from me only three months later. He asked me what I wanted for the coin. I cooly said the coin was not for sale but I would always entertain offers. He then called me back a second time and offered me 1.7X what I paid for the coin. I said that I would check on the value of the coin and call other dealers to check on his price. "I gotta go and will get back to you," I said.

A third phone call, the same day, he phoned me and raised the price to 2x the price I paid. Nope, I said.
The dealer called me nearly twice a week after that and I resisted as I wanted to shop the coin in Baltimore three weeks later.

In Baltimore, I discovered that three dealers and four collectors were clamoring for this coin which explained why the original seller was anxious to get the coin back. I also ended up selling the coin for 3.5x my cost to a collector who was the collector that had the original seller acting on his behalf!!!!!!!!!!

Both he and I were pissed!!

Would you believe?????

That was how I worked my way up to obtaining the very first 1916-D dime slabbed by NGC as a MS-67FB many years ago. In those days NGC (Lange) was stricter than PCGS on those mercs!

This points out that if the coin is a hot coin then asking a dealer to negotiate for you can backfire!!!

To this nationally known dealer I keep saying "what goes around comes around!"

coinguy1

<< <i> In those days NGC (Lange) was stricter than PCGS on those mercs! >>

(David) Lange was never a grader (at NGC) to my knowledge.

oreville

coinguy1: I am glad you pointed that out. I should clarify that point. I always refer to NGC and David Lange in the same breath when mercs come up as it seemed that he was into mercury dimes a lot in the 1990's and authored a well known book on Mercury dimes. That is why I always mentioned Lange and not the graders when it comes to NGC and mercs.

Maybe you graded that 16-D dime?

Elcontador

Oreville,

If someone gives me an ultimatum, I tell him to sell the coin to someone else, and never do business with him again, period. He could have said something to the effect that this coin will move very quickly, and he could only hold it for you for 24 hours at a price of $X.

It never ceases to amaze me that some people never realize that if they have no clients, they have no business.