How does HLRC sell inventory with his high markups?

Barry

Over the last few years, I've been the underbidder on a number of coins which appear on HLRC's web site shortly after the auction. For example, I was underbidder on this 1793 Lib Cap Cent which closed at $18.4K (with juice). It is on hlrc.com for $24K.

Everybody talks of dealers' slim margins. Harry seems to routinely get 30% on his coins. Are the other dealers feeding us a line about their markups, or does HLRC have some magic? BTW, I've noted similar auction to inventory pricing at DLRC.

morgannut2

Boy, markups like that make me wannabe a dealer!

coinpage

How does Coin Vault do it?

jonesy

The coins I have purchased from HLRC have been all very PQ. I bought and later sold a 1930S MS65 Buffalo nickel from HLRC that sold at FUN 2004 for just under 66 money.

BigD5

Obviously can't speak for all the "big guys", but they are generally looking for 30% on what they sell retail.

Doesn't mean they get it, but that's what they shoot for.

Figure overhead, advertising, sales force, etc. it all adds up quickly.

No wonder they all advertise coins as PQ!

LucyBop

Is this what seperarates wannabe dealers from the rest of the pack?

Barry

The thing that gets me is I bid on these coins what I thought was a reasonable value. HLRC comes along and outbids me, then gets another 30% on top of it. BTW, there was a higher grade 1793 Lib Cap Cent that sold for $23K with juice, and he listed it for $34K on his web site. It's gone now!

coinpage

I believe it to be good marketing, they know where to find the buyers

BigE

Maybe he has to take back in on trade the coins he sold for too much previously------------BigE

dorkkarl

laibstain is independently wealthy. it doesn't matter if he sells a coin or not, so he can sit on them & wait for someone dumb enough to pay an outrageous margin.

K S

BAJJERFAN

That must be the reason its cheaper to buy a coin on the bourse than it is to buy the coin at auction.

MadMonk

There are those who are honest, and those who are full of it. You have to be wise.

rhedden

Last year, there was a coin on the DLRC website that I wanted, but it was priced way too high at $3,500. It didn't sell after 6 months. The exact same coin then showed up on HLRC's website at $2,500, whereupon I bought it. I don't think HLRC necessarily has the highest markup out there, although his prices are definitely "retail."

JadeRareCoin

Well, you are paying for Harry's expertise. If he buys a coin, you can be fairly certain that it is solid for the grade. He, like a few other dealers, knows what is scarcer than the price guides (i.e. Greysheet) would indicate. That's why some collectors will pay a dealer 10% or so just to review auction lots and place bids.

As others indicated, the listed price on Harry's web site may not be the "bottom line". He will negotiate, especially with repeat customers and volume buyers.

And finally......a dealer has expenses. The FUN show cost us over $7,000. We have to sell a lot of coins to cover that before we even get into the profit zone. I don't know many dealers getting rich in this business. Of course I am just a wannabe dealer.

jbsteven

just like EVERY dealer that buys coins he is gambling on what he paid for the coin is less than what he can sell it for. He obviosly has people pay more than what he is buying his coins for.

IrishMike

Then there are dealers who purchase a coin let's say for 10K then put it up at 20K. There are certain coins that are easily identified and to have the cahonies to do that makes me not want to do business with them no matter how much I would like to own the coin. Maybe incorrectly I assuming that they are trying to rip a potential buyer. I don't know how I could trust a dealer that does that.

EVillageProwler

It is certainly possible that a dealer bought a coin right. And, I don't just mean that he ripped it from an unknowing elderly lady... I know of many instances where a dealer ripped a coin from another dealer.

If you are unsure if this dealer is now trying to rip you, or if his pricing actually is consistent with the market, then go to Heritage's auction archives and take a lookie. Check out other auction results as well as other dealer FPL's. Try to factor in any knowledge you may have about the specific coin: PQ, solid, or LQ? Superb eye appeal?

Before getting unnerved by perceptions (or mis-perceptions), do some homework and maybe you will develop your general pricing skills too.

EVP

ARCO

HL consistently has very PQ and eye appealing coins for sale. He buys them in many cases, at the same auction sites that are available to you and I. If you want coins like HL offers, go to the same auction venues where he buys his coins from and pick them up first. He has to turn a profit, we don't.

Tyler

DrPete

Barry,

I think what Coinguy1 says is extremely informative and hits the mark.

Harry Laibstain is my favorite dealer and he only buys really nice coins. That you have been the underbidder indicates your eyes sized up some very nice coins and take solace in that. I truly believe the coin you mention in opening this thread is greatly undervalued; he likely bought it less than it is truly worth, and is trying to sell it at the "true" market level right now. I don't blame him one bit. Knowledge is worth a lot in numismatics and can and does pay off. He has no obligation to sell a coin below the market value just because he bought it at a seemingly "bargain" level. He risks a lot in buying a coin for $18K and possibly faces it not selling for a long time. Mistakes can be made, too, and sometimes dealers lose a lot on taking the risk on a coin. Most of the real early stuff is so far off on any published guides that it takes the current market knowledge and auction experience to really understand current price values. In my narrow area of barber halves I know of many coins that are way above grey sheet prices in the real marketplace.

If you find Harry buying the type of coins you want, perhaps you should become his customer. If you have him on your side BEFORE the auction and have him preview a coin, you can work out a reasonable fee with him for representing you at auction. This is a normal customer/dealer relationship that is used by many collectors, including me. In this manner you get his great eye, and you are no longer competing against him for the coins. He then is buying the coin for you. In the end you may end up saving money, buying better coins, and being more confident about the coins you buy.

IrishMike

EVP and DrPete, I totally agree with both your thoughts. EVP, your scenario if you were applying it to me doesn't fit. I was referring to coin with a low pop, superb eye appeal that was purchased from a knowleagable collector and now listed at twice the price. Valid previous auction prices do not exist. I don't have enough knowledge about how dealers arrive at pricing other than a few examples I am aware of. In the scenario I presented it would make me hesistant to have the trust I require to invest on that level.

BWRC

Dr. Pete,

Excellent advice.

EVillageProwler

I was referring to coin with a low pop, superb eye appeal that was purchased from a knowleagable collector and now listed at twice the price.

Mike,

That's a toughie for me too. What I would suggest is to look at other similar coins and compare their pricing history. Or, look at that coin's (or type of coin's) pricing history and compare it to generics over the long haul.

Suppose you wish to know the value of a gorgeously colored 09SVDB in 65BN. Look at its pricing history relative to other Linc's of similar pop and rarity and look at its pricing history compared to other generic Linc's. This gives you a starting point, and then add in some premium for superb eye appeal or PQ. (This, of course, is the tough part.)

You can also look at similar rarities in other series that have also moved in the same way as the Linc series. Take Morgans. In what percentage did the 93S move? Or, the 21S Walker?

I can't answer your question precisely. Sorry. But, I hope this gives you a decent starting point for how to price the toughies.

EVP

Nysoto

I have been an underbidder to Harry on a number of occasions, the last an 1802 half from Heritage, his markup on this was 18%, which I think is reasonable. I ended up traded up to a nicer 1802 from him anyway. Harry knows what pricing the market will bear for early US coins and his markups vary accordingly. He gets the best from auctions, dealers, and other sources. Dr. Pete has good advice, auction representation could have saved me money on many occasions.

BigMoose

Barry, the coin that sold for $18400.00 in the Heritage Auction is an S-14 1793 Liberty Cap Cent, while the coin on the HLRC website listed for $24000.00 is NOT the same coin as the Heritage coin, it's an S-13. Two different coins! TomT.

stman

I've bought a few coins from this dealer. While the prices might seem high the quality is definitely there.
Quality is what I seek. The pieces I bought were some old classics and he definitely has a good eye for this
I also know he pays strong for nice stuff. He will give honest descriptions over the phone, and it's easy to get on his approval list with a couple good references.

The few transactions I've had with him were a pleasure EXCEPT..... when he tried to tell me
"Even if it is a fingerprint on the coin, it doesn't matter."
You all know how I feel about that comment.

Retail? Yes, but basically he's a retail dealer. Man, I hate it when I have to say good things about a dealer. (wink)
BTW, You've seen me post this coin before.... I just don't see these on ebay. Or very seldom if at all anywhere else.
Did I pay strong? Absolutely!!! But I really like the coin. And I have no doubt I could get my money back or more from him (since it's been a while)
Or other venues.

Barberman55

I wish all of my coin purchases, were as pleasurable, as those coins that I bought from Harry. He has strong prices, but the quality is there. I have never questioned a purchase that I have made with Harry, or have I needed to return a coin that I purchased from him. Paying competitive prices, for hi end graded coins, seems to work for me. Over time, I can enjoy looking at those coins, and always be happy with my purchase. Those same coins, stand a good chance of holding their value, or even increasing in value, in the long run. HLRC has been my number one source for quality, certified coins, in the past 6 years, especially for the Barber series.