Hypothetical: Do you cut your dealer-friend in your windfall?

RYK

A collector orders a coin from a dealer, whom he also considers to be a friend. He tells another collector-friend about the coin on-the-way, and before the coin even arrives at his doorstep, the collector-friend offers to buy the coin for a substantial premium. The collector did not intend to sell the coin but the collector-friend "needed" the coin more than the original buyer did, AND the collector did not mind quick profit. The collector agrees to sell the coin.

Mind you, the coin has been sent on approval, and the collector does not yet technically own the coin.

At this point, does the collector owe the dealer any share of his profit? As a friend, should he cut the dealer in on his windfall? Is there a percentage split that is appropriate, a minimum amout of money that you would consider splitting, or any other quantitative rules for such a deal? What would you do?

Bochiman

Nope.
In this case, once the coin arrives and the full, agreed upon price is paid, the dealer has his cut and whatever the next deal is, as long as the dealer doesn't do anything to help out, it is done without the dealer.

mgoodm3

I don't think so. The dealer already named his price, which likely includes a profit..

291fifth

The collector owes the dealer nothing more than the original price agreed upon.

MrEureka

No need to cut the dealer in.

Russ

The premise of the hypothetical is faulty. No dealer is your friend, they only pretend to be.

Russ, NCNE

RYK

<< <i>The premise of the hypothetical is faulty. No dealer is your friend, they only pretend to be.

Russ, NCNE >>



Okay, let's just say that he is a friendly dealer.

Longacre

I would be more likely to give my collector-friend a break on his purchase price than give the dealer-friend a cut of the profits. The dealer is already making a reasonable and customary profit when he sells the coin to you. He should not be entitled to more just because you were able to sell the coin quickly.

IGWT

Yes, assuming that friendly gestures flow both ways.

Preussen

<< <i>

<< <i>The premise of the hypothetical is faulty. No dealer is your friend, they only pretend to be.

Russ, NCNE >>



Okay, let's just say that he is a friendly dealer. >>

Friend, friendly or otherwise, the dealer has no claim on a cut IMO. -Preussen

BECOKA

Depends, if the dealer did you a favor because you needed the coin for your collection and you plan on doing continued business in the future I might at least mention someone made and offer I can't refuse. If nothing was mentioned and the dealer found out months later that you sold a coin he sold to you cheap as a favor he might not do any more favors in the future.

ipmman

No. Never.

When my dealer friends cut me in on their windfalls, I cut them in on mine.

And last I checked, it was still pretty toasty in hell.

RYK

Let's add another wrinkle to the hypo. You receive the coin, decide that you do not want it, and then show it to your collector-friend. Should the coin dealer get a cut now? What if you already told the dealer that you were returning the coin?

Longacre

<< <i>Let's add another wrinkle to the hypo. You receive the coin, decide that you do not want it, and then show it to your collector-friend. Should the coin dealer get a cut now? What if you already told the dealer that you were returning the coin? >>




I would stay out of it at that point, and tell the collector-friend to contact the dealer about purchasing it directly.

AU58WALKERS

This sounds like a soap opera.
I would say "no"

BASEagle

Nope.

Next question?

cullenbryant

whatever the case, dealer or old lady. If i come out of a deal way better than expected (this really is a hypothetical),
i'll try to show gratitude in some way, depending.

except for the usmint.

ONETHREE

Unless you actually or constructively (gave it it to the dealer's agent or someone else with the intent it be delivered) delivered it back, the terms of the original deal apply. That being said, is this a good business decision? What has the dealer done for you? If this is going to cause the hypothetical you to get cut off, or receive less preferential treatment going forward is it worth it to keep the totality of the profit? Goodwill as to future transactions also has a value. I would think our hypothetical protaganist has to decide which is worth more.

Also what is the risk or downside in having this particular dealer unhappy. If it is an arms-length transaction and you don't plan to use this guy again, then I say keep it all!

If you in some way depend on this fellow for key coins or something important to you, well it might do you to at least disclose and see what the reponse is.

mozeppa

anyone who'd do this is likely to have

"hey y'all...watch this!"

written on his grave stone.

(why don't we have a "rolling my eyes towards the heavens"...emoticon?)

stman

I'd probably come up with some kinda "story." Shirley, they could appreciate something like that.

Gemineye

Stab 'em both in the back ..take the coin and the money and look for new 'friends'...

cho10

The hypothethical case seems to want to stretch ethics beyond reality.

Does the dealer-friend lose something? No, he does not.

If you have the coin on approval you are entitled to gain "title" transforming possession into ownership by paying the price your dealer-friend asked.

Once the coin is yours then you may do whatever you please: keep it or sell it.

Whether you make a loss, a moderate profit or a huge profit is between you and the IRS (if the amout involved merits being declared.

Dealers are not candidates for sainthood and I doubt that any dealer would expect you to be a saint.

To prove my point, just look at the face of a dealer-friend from whom you bought a coin that gets bodybagged by PCGS or some other TPG.

He may take the coin back but I don't think his smile will be genuine.

DickyBetz

Nope. You sell the coin and move on. The dealer has likely already marked up the coin for himself, so you both win.

BigBuffaloGuy

As a dealer, I would love it if you bought coins from me all day and sold them to your friend. We have all kinds of "vest-pocket" dealers who "borrow" coins from us to take to show we can't attend. They know what we want out of them, and anything extra is their profit. Works out great for both of us.

Now, from time to tome, we will make a deal with someone that we are will to sell a coin for X amount of dollars, and split anything they get over Y amount of dollars.

guitarwes

nope....I agree with most on this.

Go ahead and buy the coin from the dealer and sell it to whoever wanted it(and if you happen to make a dollar or twelve, so be it. The dealer made a $). But be sure when you buy it to sell (if you don't like the coin) that whoever wanted it is going to pay you! If so, you're in a coinkydinky. <----pronounced "co-ink-e-dink-e"

I'm sure by now though you've stopped reading this far into the thread and my peon answer is useless....but that's OK....just wanted to post.


wes

lsica

No, no, no. And I really don't understand dealers who actually think they actually are owed something in a case like this.

Example of how stupid this is: There is a dealer who frequented a coin show I go to regularly. I would spend a few hundred dollars a month with him. And although he'd usually give me a "coin show discount", I wasn't getting these things for wholesale from him so he was making at least some money from the sales. Recently, he somehow discovered I'd flipped several of the coins I bought from him for a nice profit. After he learned that, the prices he quotes me on things have gone up significantly. So, of course, I don't buy much from him anymore. And I know for a fact he isn't a big time dealer, so it's not like he has people buying BU small eagle halves from him, where he can just forget about an extra few benjimins a month.

I actually love to hear stories where I've sold a coin to someone and they've sold it themselves for a substatial premium. Hell, I recently helped someone do just that exact thing. It's what keeps the coin market going, for gods sake.

1798CentCollector

I would do what you feel best doing. If you choose to cut the dealer in or let him/her sell it directly to another collector - fine. You certainly have no obligation to do so. These are two separate and unrelated transactions IMO. You are paying the dealer his asking price and you are the one that located the potential next-in-line buyer.

IGWT

This thread reads like a Coinguy by proxy.

itsnotjustme

No. Just like if I sell at a loss I don't ask the dealer for his share of the loss.

options26

Absolutely not, this is a coin at the price offered to you. What if you would have held onto the coin for 3 months and decided you didn't like it, are you going to cut the dealer a check because you sold it for more? Even if the price guide didn't go up?

If anything I will assume you are more of a friend to the collector, since you both share a similar passion. If anything I would cut him the deal, I would add a bit on for my time involved, but give him a good deal on the coin.

I get the same way when I hear a dealer has gotten cherry picked and they get upset. So if I didn't know what the coin was and bought it, thats ok, but since I knew what I was looking at, now I'm the bad guy. It's your own fault for putting coins up for sale at the price you wanted in the first place. Ever think that it's your own fault. If you don't want to get cherry picked, hire a team of experts to look at every coin that comes in, funny thing is if you did volume, they would probably pay for themselves.

By the way, if the dealer I cherry picked this week is a member, thank you for the 5, 1954 S/D's in mint state 64-65 at $5 each. I bet you thought you were screwing me at that price. Same place I got the 64 AH, 74-D DDO 50c, and the same place where the dummy had several rolls of silver dime in the half off bin marked $1 each, so for half or so melt, I bought them all. Thanks again.

stman

I seriously think one or two times doing it as you say is fine, and you owe the dealer nothing. Now, if a person did this all the time I highly doubt the dealer would be in good spirits about it, and you probably wouldn't get offered any decent material in a timely fashion in the future.

jmski52

If you have to cut your dealer-friend in on a windfall that you earned by applying your own knowledge and expertise, then he is not much of a friend. And give yourself some credit for having a conscience.