Do dealers really not care about cash when dealing with another dealer, or is that just for show?

Longacre

On serveral occasions during the Baltimore show, I was standing there when two dealers were completing a transaction. On almost all of the occasions, the selling dealer did not seem very worried (or even interested) in getting paid by the other dealer. For example, I heard many times the selling dealer saying (regarding payment) to the buying dealer: "Don't worry (waving his hand). Just pay me whenever. Sometime next month is fine. Whenever you have a chance." I thought this was very charitable of the selling dealer, and I don't know if it was just a courtesy, or whether the selling dealer got paid so much cash during the show that the thought of seeing more Franklins was making him sick. I heard this same statement among other dealers throughout the show.

Does anyone know if this approach to cash is typical among all dealers?

BillJones

Many dealers have special realationships where they trade back and forth regularly. They also see each other frequently at the shows, and know each other well. At times there are debts and receivables on both sides that tend to offset one another. For these reasons some dealers can be casual about getting paid.

I don't have those kind of relationships, but I have taken coins on consignment from dealers and held them for a couple of months without paying. When I offered to send the items back, they have said, "That's OK. Take them to a couple more shows and see how you do."

Obviously if it is hot item they would be more concerned, but if you have established a level of trust, transactions can be pretty casual.

WTCG

It's sort of like the "you take care of me and I'll take care of you" mentality. When you're friendlier with terms to other dealers then the chances are they'll reciprocate those terms with you. Also dealers are more likely to buy more from you if you offer better terms for them.

Your cash flow may suffer because of this goodwill guesture, however.

BigE

I left a coin with a dealer once and it got given away!-------------BigE

coynclecter

Ive been real suprised myself. Ive had dealers send me 2-3000 worth of stuff without up front payment. I always pay but I don't think Id do that.

BAJJERFAN

When Laura or others post here that they sold $800 K worth of coins at a show I often wonder if they take most of that back home in checks and cash or is it IOU's.

Tarmac

Believe me, most dealers keep a running balance in their head. And if someone jerks them word will be out on the street as fast as a teletype [in the old days] can send it.

Interestingly, the wholesale diamond biz runs the same way.

Commodity trading also runs with a lot of trust factor but deals are settled by end of day. If you reneg on an agreed trade, the next day no one will take or make your trades, at any price.

As odd as it sounds I like this system as it is self enforcing. You mess up, you are outta there. No trial, no jury.

BillJones

You have got that right, Tarmac. If a guy passes a bad check, it gets all over the industry super fast. Dealers won't hesitate to pass the word when Dealer X's credit is in trouble. Trust does have a major role in this business.

As for cash flow that runs both ways. Sure you might lose some cash flow on a credit sale, but you often get it back going the other way when you can get your hands on an expensive want list item that could affect your bank account. A good reputation is a major asset in the coin business. It's one that smart dealers guard very carefully.

BigE

Its amazing how fast word gets around a show when dealers see a shady character or a possible theif, they are like a herd of elephants protecting their young--------BigE

PerryHall

I remember a dealer who once had a check bounce from another dealer. He wrote "BAD CHECK" in bold red magic marker and put it in his display case. It didn't long before the dealer who wrote the bad check ran up with a fist full of cash to buy his bad check back. A dealer's reputation is extremely important and can make or break him.

morgannut2

I've seen them take coins "on a memo" -a piece of paper that's sort of an IOU. Guess every few month's or so they settle up--

tcmitssr

Absolutely.

I also know, firsthand, that it can happen between dealers and select regular customers.