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Why can't an individual buy MS AE's direct from the mint?

stev32kstev32k Posts: 2,098 ✭✭✭
in U.S. Coin Forum
Why is it that individuals cannot buy uncirculated SAE's, and gold AE's from the mint? Instead you have to buy them at marked up prices from dealers. I just don't understand the logic here - you can buy proof's, proof sets, commemoratives, mint sets, and just about everything else except uncirculated AE's. I doubt the dealers make much money on them, but the principle of the thing bothers me. I don't understand why the U.S. mint should be guaranteeing dealers a profit by not selling to the public. Maybe I should write my Congressman and Senator. Anybody else feel that way?
Who is General Failure, and why is he reading my hard drive?

Comments

  • granpagrafgranpagraf Posts: 292
    I know that I like Proof SAE's from the Mint! If I want one for My Dansco Album, I go to My local coin dealer and he has them at a very reasonable price.
    imageCollector Of All U.S. Gold Coinage!
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  • BAJJERFANBAJJERFAN Posts: 31,268 ✭✭✭✭✭
    Cuz it aint worth the hassle for the mint to process 2 million orders for one coin each, especially if they were required to handle returns on them.
    theknowitalltroll;
  • DaveGDaveG Posts: 3,535 ✭
    The Mint sells uncirculated silver and gold eagles to its dealers in very large quantities based on the current market price of gold or silver. When you buy them (one at a time, that is), you're probably only paying a couple of dollars over the price of the bullion (for silver, that is).

    Consider, instead, the price you pay the Mint directly for Proof Eagles, which for silver eagles is a multiple of the bullion content.

    Personally, I'd much rather pay a dealer a small premium over the bullion content (and let him assume the risks of the price of gold/silver fluctuations) than I would pay a larger premium over the bullion content, plus labor and shipping charges, to the Mint.

    Check out the Southern Gold Society

  • topstuftopstuf Posts: 14,803 ✭✭✭✭✭
    Last time I talked to Jim at Jack Hunt Coins (who is a primary distributor) I think he said the order quan was 50,000 oz.
    Maybe you could call the mint if you want that many.

    image
  • BAJJERFANBAJJERFAN Posts: 31,268 ✭✭✭✭✭
    In order for the mint to be guaranteed a profit over spot they would have to sell them for more than your dealer charges you now.
    theknowitalltroll;
  • UncleWigglyUncleWiggly Posts: 2,467


    << <i>Last time I talked to Jim at Jack Hunt Coins (who is a primary distributor) I think he said the order quan was 50,000 oz.
    Maybe you could call the mint if you want that many.

    image >>



    Maybe that's right. But I had a dealer at the Houston show pull a box out and told me he gets one of these a year from the mint. And it wasn't 50,000 ounces either. Anyway, here's a question for dealers who purchase ASEs direct from the mint. Which city are they shipped to you from?



    Jerry
  • silvereaglecoinssilvereaglecoins Posts: 189 ✭✭
    BAJJERFAN is correct. With roughly 10 million silver eagles minted each year, it would be a logistical nightmare for the mint to process several million individual orders for 1-20 coins each (which is what most people buy). Instead, the coins are distributed through seven "primary distributors" across the U.S. These companies are multi-million dollar firms who deal in mind-boggling volumes and tiny profit margins. Assuming a "spot silver price" of $7.00, the mint buys the silver for slightly under spot, mints the coins around the clock, and sells the green monster cases (500 coins) to primary distributors for about $8.25 per coin. These distributors then sell the cases to coin dealers (large and small) for about $8.40 per coin. After the distributor picks up the UPS shipping, he makes around 1.0-1.5% profit on the sale. Quite a low margin considering the distributor is holding a fairly large inventory that might take a dive in value at any time. In turn, the coins dealers sell the individual coins for around $9-$11 per coin (7-30% profit). Of course, this does not include the TV shopping channel crooks who sell them for $20 per coin.

    An excellent source for green monster cases is Tulving Company. They sell green monster cases to the public at slightly more then your local coin dealer or I can buy them for.
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  • gripgrip Posts: 9,962 ✭✭✭✭✭
    As topstuff said,and also think they have some kind of return,if the dealer doesn't sell out.
    Al
  • Weather11amWeather11am Posts: 2,059 ✭✭✭
    If they sold them individually they could make even more money charging the outrageous shipping fee!!!
  • BAJJERFANBAJJERFAN Posts: 31,268 ✭✭✭✭✭


    << <i>If they sold them individually they could make even more money charging the outrageous shipping fee!!! >>



    They would have to charge $15 a coin to make it worthwhile. Add $3.95 postage and you are looking at $19 a coin. Hardly a bargain by today's current situation. Its also wasteful of packaging to ship them one at a time.
    theknowitalltroll;
  • WekarWekar Posts: 470
    If the federal reserve banking system decided to distribute these to banks in the same chain as coins, how much would they cost distributed through your local bank? Would this cause too much risk in case of the price crashing?
    Varieties are the spice of a Type Set.

    Need more $$$ for coins?
  • BAJJERFANBAJJERFAN Posts: 31,268 ✭✭✭✭✭
    Unless they put them in airtites would you want one after smoe careless teller embellished it with fingerprints?
    theknowitalltroll;
  • GoldudeGoldude Posts: 460
    Why doesn't General Motors sell cars directly from the factory??? the same reason the mint doesn't sell American Eagles to every jon doe wanting 2 bullion coins. image
  • DaveGDaveG Posts: 3,535 ✭
    Wekar,

    Generally speaking, coins currently get put in huge (pallet-size) bags and shipped from the Mint to the Fed, then from the Fed to armored car companies, who count and wrap the coins and distribute them to banks, grocery stores, etc.

    So for silver and gold eagles to be available at banks, you'd have to convince the banks to carry them and then put the Eagles into the coin distribution chain. (If the armored car companies counted and wrapped the coins, you'd get offered really banged-up coins when you went to the bank to buy them. Imagine how happy you'd be with that!) Even if the coins were sold in the monster green cases, they'd still have to be counted at some point, probably the branch, since I doubt many branches would want an entire green case. They'd by counted by hand, by people who weren't coin collectors and could care less whether they put a finger print on or a ding into your formerly MS-69 coin.

    In any event, you'd probably still get stuck paying $15 per silver eagle, just to protect the bank from fluctuations in the silver price during the period it owned the coins (which could be from a few days to several months).

    Check out the Southern Gold Society

  • GoldudeGoldude Posts: 460
    As a dealer this is the worst phone call you can get..... How much is one American Eagle? i just want to buy one image My response?? CLICK!! lol
  • WekarWekar Posts: 470
    I see your point DaveG, I wouldn't expect to buy MS69 grade eagles at my local bank, just like I don't expect to buy MS68 2005 lincolns at my bank. How many people calling dealers to buy 1 SAE care about MS63 dinged, scratched, thumbprinted vs MS69? If they were near spot, I might buy one from my bank next time I walk just to have a pocket piece.
    Varieties are the spice of a Type Set.

    Need more $$$ for coins?
  • BochimanBochiman Posts: 25,556 ✭✭✭✭✭


    << <i>If they sold them individually they could make even more money charging the outrageous shipping fee!!! >>



    Whose outrageous shipping fee? The US Mint's?

    Funny, but I don't find it outrageous. I routinely order $300+ worth of stuff (I just had to return some and it cost me $14 to return it to them...and I am getting that reimbursed).

    So, it cost me $3.95 to have it sent to me but 3x that to send it back and you call $3.95 outrageous? Maybe it is if you nickel and dime things and buy just 1 thing at a time.
    I try to combine my purchases though. Makes more economical sense.

    I've been told I tolerate fools poorly...that may explain things if I have a problem with you. Current ebay items - Nothing at the moment

  • stev32kstev32k Posts: 2,098 ✭✭✭
    I believe the same excuses (higher cost, higher shipping) could be used to justify selling all mint products only to dealers. Most commemoratives go for about $36.00 plus shipping, silver proof sets the same, mint sets $23.00. They could all be sold cheaper in bulk to large dealers. The dealers would then sell them to individuals cheaper than the mint(yeah - right). So if cheap is the only criteria why are these sold by the mint to the public one coin or set at a time? Sounds like an effective lobbying effort by someone on behalf of the larger dealers.

    Would I pay $15.00 plus shipping to the mint for a Silver Eagle - sure would if that was the only outlet for the new coins. Maybe there would be fewer minted and they would have more long term value.
    Who is General Failure, and why is he reading my hard drive?
  • rmossrmoss Posts: 644
    Way back when the Mint was clearing out thier stock of SBA's I ordered 6 of each year and got the 79's and 80's but no 81's. Three of the 79 sets were near dates. Had these been sold only to, or through, outlet dealers I would have never received the near dates. I know there is not a lot of value to them, but still a good catch. The Mint could set a price on the Eagle coins based on cost at time of minting and still make a profit.
    "Im not young enough to know everything."
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  • relayerrelayer Posts: 10,570 ✭

    You too can buy them directly from the Mint if you want.

    Just tell them how many tons you want to order.image
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  • DeepCoinDeepCoin Posts: 2,781 ✭✭✭
    The minimum order is $50,000 I believe. The easiest way to buy these is to go to any show and someone will be selling them. I have bought SAEs at small shows and big ones. That way you avoid ALL the shipping costs. Remember, this is a bullion coin, not a numismatic piece, even if some people collect them.
    Retired United States Mint guy, now working on an Everyman Type Set.
  • Steve27Steve27 Posts: 13,275 ✭✭✭
    Since these are primarily bullion coins, they would probably sell for much less in the secondary market as opposed to buying them from the mint. However, the mint appears to be very good at putting a special wrapper around common coins and selling them at very high mark-ups.
    "It's far easier to fight for principles, than to live up to them." Adlai Stevenson
  • CoinHuskerCoinHusker Posts: 5,033 ✭✭✭


    << <i>Why is it that individuals cannot buy uncirculated SAE's, and gold AE's from the mint? >>




    Who would want too? They are all trouble waiting to happen.


    Now, if you want to write to your congressman and senators about something, write about getting dead presidents off our coins, or eliminating the $1 bill in favor of the $1 coin. image
    Collecting coins, medals and currency featuring "The Sower"
  • ddinkddink Posts: 2,748


    << <i>I believe the same excuses (higher cost, higher shipping) could be used to justify selling all mint products only to dealers. Most commemoratives go for about $36.00 plus shipping >>



    First of all, compare the mintage of most modern commems (around 500k to 750k) to the mintage of SAEs per year (8-10 million per year). Secondly, they are making about 50 cents profit on each silver eagle, while they make about $25 profit on each modern commem.

    Commems are intended to have numismatic value, so the mint can have large profit margins on those, but SAEs are intended to be bullion coins. Who would buy a one ounce silver bullion coin for $36? The mint has to sell them as close to spot as they can, and the only way to do that is to distribute them to large dealers.
    I heard they were making a French version of Medal of Honor. I wonder how many hotkeys it'll have for "surrender."
  • AlixTCatAlixTCat Posts: 1,276


    << <i>

    << <i>Why is it that individuals cannot buy uncirculated SAE's, and gold AE's from the mint? >>




    Who would want too? They are all trouble waiting to happen.
    >>



    Care to elaborate?

    Jonathan
    I have been a collector for over mumbly-five years. I learn something new every day.

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