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Why is it OK for one of to make a "score," but not OK for a dealer to do the same?
PutTogether
Posts: 2,141 ✭✭✭
I am not starting this topic as a flame war, but merely to incite a serious, thought out discussion. I am going to mention names, but only to cite specific instances, not to single a person out.
This has been discussed recently, but thought a thread devoted to this specific question was called for.
Why is it ok for one of us to make a "score" (i.e. buy a coin at significantly less than its value for one reason or another) But we become appalled when a dealer attempts to do the same? Two fairly recent examples come to mind. Russ seemingly routinely hunts for, and finds, proof or SMS sets with difficult to obtain cameo coins. He recently posted a thread about a submission with a ton of Cameo AH's, and even used the word "CHA CHING" in his title. He went on to explain that for most of the proof sets he paid around 11 bucks. An 11 dollar proofset yielded a several hundred dollar coin, and he was kind of bragging about it, and was congratulated for it. I for one, think he SHOULD be congratulated for it. I am only asking and bringing it up for discussion: "why can't a dealer be congratulated for buying a FLowing Hair Dollar for 1000 dollars."
Clackamas recently made an up to this point unheard of 68 D full steps nickel with a value ive seen estimated from 10-30K. Again, we all agree congratulations are in order. (And they really are - CONGRATULATIONS! I admire and respect your dedication, and am very happy for you) But if you average out what he paid, I'm sure he didnt pay anywhere near that range for that nickel.
Some say both these examples are different from a dealer ripping somone, and therefore justified, because: 1) when we rip things from dealers, its often because they have mis attributed something and priced it with their own (incorrect) ask price. and 2) These gentlemen are in it for the hunt.
Both of these statements would be absolutely true, but could it not also be said that a dealer buying something for way to cheap is because the seller "misattributed" or was otherwise uneducated about their item, and it is therefore the sellers responsibility? (I doubt anyone here has gone back to pay a dealer more money because they realized the Morgan they bought as a common turned out to be a rare VAM).
Russ has bought at least some of his cameo yielding proof sets from ebay, and isnt that just like someone saying "whats the most you'll give me for this?" (just like a customer in a coin shop?)
And dont dealers have to "hunt" through a ton of customers before they can buy a Flowing Hair for $1000?
I'm playing devils advocate, and honestly don't have strong feelings one way or the other, but I think it is worth discussing. I'd like specific reasons that the first examples are ok, and a dealer doing the same thing is not.
This has been discussed recently, but thought a thread devoted to this specific question was called for.
Why is it ok for one of us to make a "score" (i.e. buy a coin at significantly less than its value for one reason or another) But we become appalled when a dealer attempts to do the same? Two fairly recent examples come to mind. Russ seemingly routinely hunts for, and finds, proof or SMS sets with difficult to obtain cameo coins. He recently posted a thread about a submission with a ton of Cameo AH's, and even used the word "CHA CHING" in his title. He went on to explain that for most of the proof sets he paid around 11 bucks. An 11 dollar proofset yielded a several hundred dollar coin, and he was kind of bragging about it, and was congratulated for it. I for one, think he SHOULD be congratulated for it. I am only asking and bringing it up for discussion: "why can't a dealer be congratulated for buying a FLowing Hair Dollar for 1000 dollars."
Clackamas recently made an up to this point unheard of 68 D full steps nickel with a value ive seen estimated from 10-30K. Again, we all agree congratulations are in order. (And they really are - CONGRATULATIONS! I admire and respect your dedication, and am very happy for you) But if you average out what he paid, I'm sure he didnt pay anywhere near that range for that nickel.
Some say both these examples are different from a dealer ripping somone, and therefore justified, because: 1) when we rip things from dealers, its often because they have mis attributed something and priced it with their own (incorrect) ask price. and 2) These gentlemen are in it for the hunt.
Both of these statements would be absolutely true, but could it not also be said that a dealer buying something for way to cheap is because the seller "misattributed" or was otherwise uneducated about their item, and it is therefore the sellers responsibility? (I doubt anyone here has gone back to pay a dealer more money because they realized the Morgan they bought as a common turned out to be a rare VAM).
Russ has bought at least some of his cameo yielding proof sets from ebay, and isnt that just like someone saying "whats the most you'll give me for this?" (just like a customer in a coin shop?)
And dont dealers have to "hunt" through a ton of customers before they can buy a Flowing Hair for $1000?
I'm playing devils advocate, and honestly don't have strong feelings one way or the other, but I think it is worth discussing. I'd like specific reasons that the first examples are ok, and a dealer doing the same thing is not.
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First I took the risk, a large one by buying 1800 mint sets and paying more than they sell for on Ebay and more than retail sheet. Second, it was luck. Buying a flowing hair half for $1000 it is stealing because the dealer know dang well that the coin was worth more. I had no idea I would score a 68-D FS Jefferson, none, in fact the thought did not cross my mind. I was looking for a FS 68-S which, although uncommon is not out of the relm of possibility and I thought the thousands I spent on the sets yield decent odds. What if I was wrong? Dealers are supposed to know what they have, it is thier business, selling an obvious CAM SMS set for $11 one assumes they dealer knows what he is selling and if he does not.
Doesnt a coin dealer take a risk opening their own business?
Isnt anyone selling ANYTHING supposed to know what they are selling?
<< <i>Your premise is flawed. You've compared an apple to an orange and asked us why aren't they the same color. >>
Please, do explain further. Saying I am "comparing an apple to an orange" doesnt really help the discussion at all. Try to be specific as the subtle, or not so subtle differences in justification on either moral, ethical, or legal grounds.
Again, it is not my opinion that dealers SHOULD be doing this - I opened it for meaningful discussion, nothing more.
This is an interesting thread, and I think that it actually opens up a deeper and more fundamental problem: when is somebody a dealer as opposed to a collector who seeks good prices for his/her own collection?
Perhaps, but if I score a Cha-Ching and put it away in my collection w/ no intent to sell at a higher price, isn't that a different ethical mis-step than scoring and turning right around and selling it at maybe a 40% gain?
Ohhhhhh.
-Daniel
-Aristotle
Dum loquimur fugerit invida aetas. Carpe diem quam minimum credula postero.
-Horace
A slabbed XF-40 bust dollar is a well-established commodity. Its value is well-known, within a certain range, and it's well known that one of good quality for the grade will sell quickly at a strong price.
Coins in raw proof sets and mint sets, usually with lousy pictures, are a crapshoot. You don't really know whether or not you'll get that PR-69 DCAM or a PR-67CAM in many cases. The former is a "score," but there is significant risk you WON'T get that. For every score reported here, there are certainly some submissions which were a bust.
A dealer offering $1000 for a PCGS XF-40 Bust Dollar, for example, KNOWS what they can quickly turn it around and flip it for -- several thousand more than that! Someone buying a cheap modern proof set doesn't usually know they'll get that PR-69DCAM.
Plus, with being a bona fide dealer comes "professional ethics," part of which includes fair dealing with both buying and selling of your coins.
When a widow walks in to a coin shop asking for help and is offered 10c or less on the dollar. IMHO that's over the line, but it is SOP.
I am not a dealer. I am a collector. The closest I have come to this situation is when a friend approached me to help him sell off his collection. I wound up connecting him with a buyer for like 1/3 of it, and I bought the rest myself.
To the extent of my knowledge (more on that below), and to the extent of my belief system, I did not ever score with him. Rather, I told him that my offer for whatever I buy will be below list. That's what he paid -- in effect -- for me cataloging the stuff and for helping to sell that 1/3.
Here's another aspect -- 'my knowledge'. I am a collector, but I am very much still a novice. Been at this only about four years. I don't know that I have the quick ready knowledge base to spot a score opportunity as somebody more knowledgable -- like a dealer, or maybe the real ethical dilemma here is: the more you know the more you can score?
<< <i>"score" (i.e. buy a coin at significantly less than its value for one reason or another) >>
The value of those sets really are $11. The current market for proof sets/sms has not matured to a point that they can be priced according to the cameo contrast of their coins. Russ' expertise coupled with TPG opinions coupled with a pair add value.
To compare a price paid in a relatively free market to a dealer's lowball 'offer' to buy is comparing two different things IMO.
At any auction great. Buying from another dealer maybe. Buying from collector at a coin show or walking into a shop etc no.
I bought a lot of about 240 Indain cents 1880-1909
I check each for date and condition and paid a fair market
price.
Later in the week I got out the loop and starting looking for varietys
and I found an 1887 Doubled Die in VF-XF....... Cha Ching
Rip or Score..??????
Because when you use your numismatic knowledge to rip a novice it is considered part of the hobby.
But a dealer is in the business to make a profit, and everyone knows that business people are evil.
My posts viewed
since 8/1/6
If a dealer knows where to sell something of mine for FAR more money than I can, more power to him/her, and vice/versa.
and it sets us apart from practitioners and consultants. Gregor
The dealer knows he has a score, and merely sat there waiting like a spider for a fly to make it, in the case of the widow looking for help with inherited coins. When selling to Russ et al, he knows the market price and sells willingly at that price. The value is a totally different thing, and it is only realized by the aforementioned investment, work and expertise.
Dealers also score on purchases from other dealers, through recognizing something others have not. In those cases, the sellers willingly sell for a number that may be much lower than what a coin subsequently goes for, but again lots of work and expertise produces the higher ultimate return.
Who in these situations is making an informed decison? Answer that and you see who has honestly made a score versus someone who has taken advantage of someone vulnerable and should be ashamed.
Apropos of the coin posse/aka caca: "The longer he spoke of his honor, the tighter I held to my purse."
There are two reasons I follow this rule in business:
It is against my belief to charge what I can get away with. I charge a fair and reasonable rate.
I get tons of referrals from my clients, which is the major reason for any success I have had.
Sooner or later someone will discover you are ripping people off and using business costs is a lame excuse. There is also a cost to your business for that type of reputation. Factor that cost into the equation.
Ripping a novice of their coins is repugnant, immoral, and just flat wrong.
Ripping a dealer is fun!
Russ, NCNE
<< <i>It's really very simple.
Ripping a novice of their coins is repugnant, immoral, and just flat wrong.
Ripping a dealer is fun!
Russ, NCNE >>
Nice summary.
and it sets us apart from practitioners and consultants. Gregor
<< <i>Dealers by and large don't believe there is a market for the coins Marty, Russ, and Clack made, even if they read it on the boards. >>
Either that or it's just too much work and too much risk for them to bother "scoring" like that. Widows are easier.
Is it because all dealers are waiting to take advantage of the public?
Is it because "collectors" bought on TV at 5 x the going rate for such common material that the dealer is just offering the market price?
Is it because dealers in coin shops are Wannabee's ...not real coin dealers who offer fair prices for real coins.....
yes, I know its a bit off subject but I think this is a great thread.....its ok for collectors to cherry pick a dealer and score but not alright for a dealer to cherry pick a collector and score...and Im not talking about the little old lady who comes in with 100 $20 and the dealer pays her face.....
<< <i>Dealers by and large don't believe there is a market for the coins Marty, Russ, and Clack made >>
And, I think that all people should stick to their beliefs.
Russ, NCNE
<< <i> Is it because all dealers are waiting to take advantage of the public? >>
Of course not. But those who do unfortunately make the entire industry look bad.
<< <i>Is it because "collectors" bought on TV at 5 x the going rate for such common material that the dealer is just offering the market price? >>
That may add to their perception. But we're talking *actual* rips here, not "rips" in the eyes of an uninformed person who was sold a grossly overpriced bill of goods to begin with.
<< <i>Is it because dealers in coin shops are Wannabee's ...not real coin dealers who offer fair prices for real coins..... >>
I'm not touching this one.
<< <i>yes, I know its a bit off subject but I think this is a great thread.....its ok for collectors to cherry pick a dealer and score but not alright for a dealer to cherry pick a collector and score...and Im not talking about the little old lady who comes in with 100 $20 and the dealer pays her face..... >>
There's a reasonable assumption that a dealer should know their stuff, I think. If they don't recognize a variety, or if they think a modern proof coin in a "junk box" would only go 66CAM instead of 69DCAM, that's the business.
Now if something was clearly mismarked -- a 1914-D cent being offered for $40 in XF because it was misidentified and labelled as a 1914-S on the holder -- then it's unethical to "rip" a dealer or anyone else. That's just an honest mistake, and it's unethical to take advantage of that. But if they fail to identify a variety or undergrade some modern coins that some experts in the moderns recognize as a potential pop top, that's the business. IMO, exploiting an obvious mistake or gross ignorance, and exploiting lack of expert knowledge in a particular area, are two different things.
I think people have a duty to educate themselves about things they are going to sell:
**If you are going to sell a car, you research how much it is worth.
**If a dealer is going to sell coins, he ought to look into the value of the piece and sell his SMS sets w/cameos for a higher price. But he doesn't so that is his loss.
**If granny is going to sell ded grampys coins, she better seek some help. If she gets ripped off, I feel bad, but she could have done something to prevent it.
I don't feel bad for people who go to a car dealer and pay the full sticker price plus all of the other car dealer rips. You can easily find out what you actually need to pay with a few hours of research and save yourself thousands of dollars. If you don't do your research, then you pay the price for your own ignorance.
Nowhere is it written that coin dealers are these great guys who are in business just to help the stereotypical old ladies out. If someone who has been alive longer than all of us doesn't know any better, then I am afraid they are never going to learn. Hey, the world is full of stupid people, what can you do? If I had a piece of jewelery I wanted to sell, I wouldn't take it to a pawn shop for the best price.
Is it wrong to rip people off? From a business perspective, no way, not in a million years. From a moral/ethical standpoint, I have a problem with it. Everyone knows how KenzoT has been handling that small hoard of key date Morgans from his posts here on the boards. A great example of how things would work in an ideal world. And he will be rewarded quite nicely for his efforts.
People get ripped off all of the time, and that is too bad. But remember, getting ripped off requires two parties to participate. The key is to not be either one of those parties.
REGARDLESS OF WHAT THEY MIGHT BE WORTH TO SOMEONE ELSE!
Jim
http://rob.com/russ/collection/1840.html
I later traded the coin for two die marriages that I did not have, plus a lower grade example of the same die marriage. I think that this points out that sometimes it is best to just keep quiet about our 'scores', but always remember the dealer and patronize him with future purchases. He cannot be upset about what he does not know.
This may not be an answer to the root question, but I think it is relavent to the overall discussion.
An excellent point. A lot of times, coins are just worthless junk to the spouse. If you are collecting from the standpoint that when you die, your spouse will be able to live off of your collection, then you darn well better educate them about their value before you kick it. Dont put the burden on them to figure it out on their own. Leave them easy to follow documentation - not just a box of unsorted coins with no records. Make it easy for them to get their value without havein to become an expert collector. Otherwise, it is just a box of old coins to them, might not be worth any more than your cherieshed Reader's Digest collection (some day we're gonna be rich off these!).
Didn't wanna get me no trade
Never want to be like papa
Working for the boss every night and day
--"Happy", by the Rolling Stones (1972)
Are people foolish to think they'll always get a fair appraisal from someone who makes a living buying cheap and selling dear? Well, duh!
But here's the difference to me -- a dealer, or anybody else who offers a coin for sale at a price is tacitly saying, "I know enough about what I've got here that I'm happy accepting $X for it." Not that I'd expect anybody to do so, but if you were to come to me with a Flowing Hair dollar, 93-S Morgan etc. and offer them at $1,000 I wouldn't have a problem taking you up on it -- after, of course, satisfying myself you aren't trying to rip me off with a fake or what have you. Offer me a proof set for $11, I assume you know enough to set the price, and that's what I'll pay you if it's worth that -- or much more -- to me.
When somebody says, "What are these worth," they are asking to be informed of a fair market value. "What are these worth" is not the same as "In your sneaky dreams, how little would you like to pay to acquire these?"
In the gray area between, somebody says, "What'll you give me for these?" This is an ethics problem only you can solve for yourself. But I'd submit that the fair answer is the one that gives you a return on your time & investment that is reasonable. This calls on you to be a just person, and to find for yourself the number that represents neither party getting something for nothing. Offering ten cents on the dollar in such a case just because that person is ignorant isn't right. Think 'golden rule' here -- should I inherit a bunch of oh, I don't know, blown glass or NASCAR miniatures or something, I highly doubt that I'll have the time to really find out enough about it to negotiate on equal footing with a blown glass dealer.
So, I'll probably try to get a few estimates, read a little bit, see what prices have been realized on ebay by things that look similar to my untrained eye, etc. -- but in the end, if I want to sell it, I'm somewhat at the mercy of the honesty of a blown glass dealer with many decades more experience in the biz than I've got. I would hope, in such a case, to be given an offer that allows him to make a decent profit on his work & his money, which should not be a CRAZY MULTIPLE of the price he offers me. There's room for variance if the piece I've got to sell is something he expects will sit for a long time before finding a buyer or whatever, but you get my point -- I'd hope to be dealt with squarely. So, when someone comes with the question "What'll you give me for these," I think it's only right to make a fair offer -- or to turn the question around, and ask "How much are you asking?" and start from there.
<<their expertise gets them into a position to score and lets them know when they have>>
I agree.
<<Everyone knows how KenzoT has been handling that small hoard of key date Morgans from his posts here on the boards>>
I agree with that -- KenzoT is displaying a wonderful balance of knowledge coupled with an open ethical stance.
<< would tend to agree with the premise made by PutTogether, that a dealer has the right to make a 'score', provided he does not use his specific knowledge (typically greater that an unsuspecting seller) to take advantage of that seller.>>
And I agree with that -- strongly. The best dealers are those who actually share their knowledge with you as they reason through the value of something. Those are the dealers to whom I will return for subsequent purchases.
Now to the interesting problem: departure from This Good Earth: what is the value of the coin collection to a surviving spouse or child? And what if that beneficiary just does not have anywhere near your knowledge, and will, therefore, seem to lose money when the coins are divested? OKbustchaser has an excellent perspective, and I admire that point of view.
Here's another way -- and this is what I hope to do.
Play a game w/ yourself. Try to figure out when to sell off all your coins before you become feeble and aged. It will be fun to see what they bring, and you wind up with liquid assets that are much easier to divest through your will: to family or to charity. I am particularly keen to see some elements of my collection bring BIG CHA-CHING to certain charities.
A very very good thread.
Howz bout this scenario:
Savvy PCGS forum collectors buy rolls of Bison nickels, then turn them on Ebay to newbie collectors for 10X profit when those newbie collectors could have just gone to the bank and bought for $2 a roll? Hmmmmm....
<< <i>Good points mirabela.
Howz bout this scenario:
Savvy PCGS forum collectors buy rolls of Bison nickels, then turn them on Ebay to newbie collectors for 10X profit when those newbie collectors could have just gone to the bank and bought for $2 a roll? Hmmmmm.... >>
ehm
(I hope to get some pics of my (AT) toners (Bison) uploaded soon, lovely blues & yellows).
-g
I'd give you the world, just because...
Speak to me of loved ones, favorite places and things, loves lost and gained, tears shed for joy and sorrow, of when I see the sparkle in your eye ...
and the blackness when the dream dies, of lovers, fools, adventurers and kings while I sip my wine and contemplate the Chi.
"Oh no Miss Gran-Ma-Ma, that 1893-S Morgan is just junk, here is $25 for it." <----This is fraud
"I'll give you $25 for that 1893-S Morgan, Miss Gran-Ma-Ma." <---looking for a "score," sleazy, but perfectly legal.
"Well, Russ, those SMS coins have annoying frost on them. I'll knock two bucks off the set." <---Cha-Ching!
I wonder if this would be a question on a Stock Brokers or Real Estate brokers board without someone losing their license to sell to the public? If you have to ask the question you shouldn't do it.
<< <i>Savvy PCGS forum collectors buy rolls of Bison nickels, then turn them on Ebay to newbie collectors for 10X profit when those newbie collectors could have just gone to the bank and bought for $2 a roll? >>
Only problem is that the rolls are bringing about $4 or less.
Russ, NCNE
<< <i>It's really very simple.
Ripping a novice of their coins is repugnant, immoral, and just flat wrong.
Ripping a dealer is fun!
Russ, NCNE >>
Russ does it again.
Says it all clearly and concisely in 20+ words that a 200 post thread will not do.
I say Russ, Marty et al are the Robin hoods of coin collecting.
Rip the rich and mighty and give to the poor.
I for one have recieved one of their giveaways and it was not a cheap item. doubled my collection value.
Good work gentleman keep up the good work.
I hope to one day learn enough to make the coveted "You Suck' award.
Rookie Joe
Joe Smoe walks in w/a 93 S morg thats raw G8,dealer offers him 10x melt or about 50 bucks,knowing the coin is worth 2 K.thats wrong !
Marty walks in to dealer A with 50 proof sets that he picked to death and the dealer offers him 30 back of bid and Marty says OK,thats fine.
Russ walks in to dealer B and burns 2 hours of the guys time cherry picking 5 proof sets and offers 20 over ask,the dealer says OK, thats fine.
The Frickin dealer should know his biz !
<< <i>Joe Smoe walks in w/a 93 S morg thats raw G8,dealer offers him 10x melt or about 50 bucks,knowing the coin is worth 2 K.thats wrong ! >>
what if it's not a dealer, but some collector who just happens to own a storefront? Then it would be a collector ripping a little old lady. Or what if you're little old neighbor lady's husband dies, one day you talk, mention you collect coins, she offers to show you his 1796 50c piece in MS68. If the lady asks "what'll you give me for this?" as opposed to "what is this worth", is it wrong to say I'll give you $50 for it and have her accept?
Need more $$$ for coins?
<< <i>I honestly can't even believe this is a real discussion here. Basically, what's you're saying is that it's perfectly fine for a dealer to screw over the public because the public is ignorant. If that same dealer has an 1893-s $1 in his junk box for $1.00 it's on par with a dealer's "rip". Wrong, it's not the same. The dealer is in a business at the public's trust. I do believe there are laws that prevent a knowledgable dealer, of any commodity, from knowingly screwing somebody like you're insinuating. I can't say for sure what law this is or isn't and I don't know what the threshold is, but there's a definitely line between Fraud and trying to make a decent margin. >>
A lawyer can chime in here, but i believe this to be absolutely not true. In a private transaction , a person is not required by law to share their knowledge. IE, if you were selling a corvette I knew to be worth 200 thousand dollars, i am under no obligation whatsoever to tell you that I know its value to be greatly over the number I am offering you. Now notice i do say no LEGAL obligation. Is there a moral or ethical one? That is the heart of the question I am asking.
Eric
I don't think a dealer buying a coin from someone other than another dealer is "a private transaction".
<< <i>what if it's not a dealer, but some collector who just happens to own a storefront? Then it would be a collector ripping a little old lady. Or what if you're little old neighbor lady's husband dies, one day you talk, mention you collect coins, she offers to show you his 1796 50c piece in MS68. If the lady asks "what'll you give me for this?" as opposed to "what is this worth", is it wrong to say I'll give you $50 for it and have her accept? >>
Go back to what I said before -- if the shoe were on the other foot, how would you want to be treated? You inherit a couple of well preserved illuminated 14th century manuscripts, and you bring them to your acquaintance who happens to be an avid and knowledgeable collector of such, though he doesn't have a resale number or a business license, etc. etc.
Gimme a break! How would you want to be treated? Wouldn't you want the offer to be a fair one? Now, your 1796 50c in MS68 is a hypothetical piece, but let's get in the ballpark and say X or .9(X) or 1.2(X) or .785(X) might all be fair and just, but .003(X) just ISN'T!
I'd be naive to complain that we all know right from wrong, but neither do I think we're as widely ignorant of the difference as parts of this thread make it appear!
And anyway, what is "just some collector who owns a storefront?" That's a dealer!
but really not a good comparison
also there is a huge problem with the premise on some coins it is the plastic that makes the coin not the coin itself and if the same coin where to be broken out of the plastic the value is nil compaired to the coin in the slab
and with many of these coins they can be bought for 1 to 10+ dollars each coin raw and you can basically view hundreds if not thousands of the same raw coins that are basically all the same with only slight differences seen only by a trained eye under a glass
and as with a house of cards the wind will change and they will fall
the ultimate question is what are these made coins worth right now if broken out of their respective holders ?? and what is the buy back for the original sellers?
answer these questions yourself and buy coins with discretionary income for collecting enjoyment
if you choose to buy them good for you collect what you like with monry you can afford to lose
i wonder what all these coins all these coins are worth that are supposedly cherry picked raw if they had to be sold raw as both ngc/pcgs went out of biz torommow??
One parting thought. I don't ever recall the folks who frequently post their cherrypicks complaining on the boards that they got ripped by a dealer. Just a thought.
and it sets us apart from practitioners and consultants. Gregor