Is a dealer's cash purchase price and consignment fee always very similar (or how large a discount i
Longacre
Posts: 16,717 ✭✭✭
Suppose you want to sell a coin to a dealer. Say the coin has a retail value of $5,000. If the dealer gives you the option of a cash purchase (by him) or consigning the coin to him, would your options be as follows:
(1) Cash purchase by the dealer for $4,500
OR
(2) Consignment at 10% and a listing on his website at $5,000. Therefore, the collector gets a net $4,500.
Or would the cash purchase by the dealer be less than $4,500 because he is taking the risk of selling the coin, and therefore, he would need his return goosed a little bit?
(1) Cash purchase by the dealer for $4,500
OR
(2) Consignment at 10% and a listing on his website at $5,000. Therefore, the collector gets a net $4,500.
Or would the cash purchase by the dealer be less than $4,500 because he is taking the risk of selling the coin, and therefore, he would need his return goosed a little bit?
Always took candy from strangers
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)
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)
0
Comments
Consignment will always get you more than an outright sale, IMHO.
I firmly believe in numismatics as the world's greatest hobby, but recognize that this is a luxury and without collectors, we can all spend/melt our collections/inventories.
eBaystore
<< <i>I don't believe that a dealer would pay $4500 for a $5000 retail coin, unless he has a want list from a customer and he knows that the customer will definitely purchase the coin.
Consignment will always get you more than an outright sale, IMHO. >>
Thanks. I was using the numbers for illustrative purposes, but your second sentence answered my question!
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)
<< <i>I don't believe that a dealer would pay $4500 for a $5000 retail coin, unless he has a want list from a customer and he knows that the customer will definitely purchase the coin.... >>
I disagree. I buy some coins with the thought of marking them up by 10% and I believe some other dealers do the same. My standard mark-up is 15%, but if I see a nice coin that I have to stretch on to acquire, I will do so and work on a smaller margin. Conversely, if I can buy a coin at what seems like an especially favorable price I will mark it up by more than 15%.
Regarding the difference in price between an outright purchase and taking a coin on consignment.... it depends upon the coin and the dealer, but I would expect a difference in approximately the 5% to 10% range. If it's much more than that, among other possibilities, it might indicate either that the dealer wont pay a fair price or is pricing the consigned coin too high.
<< <i>Generally I offer 60% of what I think I can sell the coin for. If this doesn't float your boat - take a hike. >>
You pay $360 for gold bullion with gold at $600?
Seriously, though -- there are some illiquid and mostly lower-value coins for which 60 cents on the dollar is a fair offer. But I hope not too many people with "good stuff" in high demand take you up on it and choose to "take a hike" instead.