Dealing with a new dealer

illini420 · March 23, 2008 3:56AM

I just started dealing with a coin dealer in southern California recently. I know the shop has been there for a long time though. I'm just getting back into collecting (other than buying the annual proof/unc. sets) after a 15-20 year break and I've only been in this particular shop a few times over the past month, but I like the shop so far.

Last week I sold some newer .9999 gold coins that I considered "extras" and ending up getting around 97% of melt. Not horrible for a quick dump of the coins. However, in my negotiations for a better price. The dealer told me they were going to be melted anyway and that was the best he could do. Ok, fine. However, I went into the shop yesterday and saw the exact coins I had sold in his case for sale in his "bullion" section. I didn't ask the price, but I'm sure it's melt + something. I didn't say anything about it, I'm just not sure if I was really lied to or not since I guess they are kind of being sold as melt (I feel like I was at least a little bit).

Not a huge deal as I thought the price I received on my sale was fair (especially w/ gold dropping this past week). Just not sure how I'm going to feel going forward on future buying/selling at this place and whether I can be as trusting of what I'm being told. I just don't know if this is a common practice is a "good" coin shop or if I'm making a big deal of nothing. Would any have you called the dealer out on this? Or should I think of it no longer and get back to collecting?

gecko109 · March 23, 2008 4:01AM

He could have intended to send them to a refiner when he bought them from you, and then something made him change his mind. 97% is a strong buy price, and it would be very hard to do better than that. He will most likely sell for about 106%, which gives him a very modest 9% spread. Totally fair in my perspective. I would neither "call him out", nor hold it against him. Whether he melts them or resells them, he gave you a very fair price, and thats more important than anything else.

woodardcoin · March 23, 2008 4:03AM

Brush it off and keep on collecting. He has to make a little living too .

JP

mrearlygold · March 23, 2008 4:04AM

Gotta watch out for coin dealers. Especially ones that pay you 97%. How dare he.

Greeniejr · March 23, 2008 4:08AM

My thought would be that you should probably trust him but approach with caution. He was probably being very realistic. A dealer must buy the piece thinking worst case scenerio. He could have bought it, put it in his case (in the bullion section), and when he has enough to warrant a melt, he will melt it. This also isnt helped by the crazy falling market. I think that 97% may not have been on the strong side of things (though not unreasonable) if it was known and marked .9999. As gecko said, it was fair so don't fret.
David

gecko109 · March 23, 2008 4:15AM

<< My thought would be that you should probably trust him but approach with caution. He was probably being very realistic. A dealer must buy the piece thinking worst case scenerio. He could have bought it, put it in his case (in the bullion section), and when he has enough to warrant a melt, he will melt it. This also isnt helped by the crazy falling market. I think that 97% may not have been on the strong side of things (though not unreasonable) if it was known and marked .9999. As gecko said, it was fair so don't fret.
David >>

Does HJB coins pay stronger than 97%?

illini420 · March 23, 2008 4:16AM

Thanks everyone, it wasn't really a price issue... I agree I got a very fair price and I definitely respect the dealer's right to profit, especially with the overhead involved in owing a business here in SoCal. It was more about the trust issue going forward. Now that I think about it more and have read some of your comments, the dealer may have just changed his mind after my sale with gold going down around $100/oz. this week. Probably the only way he can make money now is to sell them himself. Anyways, thanks again, makes it easier to clear my own thoughts by hearing the opinions of others sometimes

BECOKA · March 23, 2008 4:16AM

Could simply be with the drop in gold price it was not worth sending them in to be melted. He is probably better off putting a premium on them and waiting for the gold price to come back up so he does not lose anything on them.

LickThoseStamps · March 23, 2008 4:17AM

How do you know they were the exact coins you sold?

coinsarefun · March 23, 2008 4:18AM

<< Brush it off and keep on collecting. He has to make a little living too .

JP >>

I would agree that he needs to make a living also.
The dealer could have been nicer and tell you that he has to make money as well, most don't.
But, in the real world whether its coins are anything else there is a buy price and a sell price.
I would just collect what you like and go on.

By the way, where in Southern Cal?
I go to a shop in Long Beach, they seem to be relatively fair.

Stefanie

RichieURich · March 23, 2008 4:19AM

At 97% of melt, you got a pretty good price. The dealer either has to sell the bullion item immediately, or hope gold doesn't go south on him. If you sold when gold was $1,000 an ounc.e, you got $970, and with gold at $920 an ounce now, even if he is selling at 6% over melt, that is $975.20. So in that case he would be making only $5.20, if he didn't sell them immediately. Or, perhaps he did reach agreement to sell the immediately, but with gold going down, maybe the other party backed out of the deal somehow. In any case, you got a decent deal.

gecko109 · March 23, 2008 4:21AM

97% is not just a good price, its a GREAT price. If any of you can tell me where I could get higher than that, im all ears.

illini420 · March 23, 2008 4:22AM

<< How do you know they were the exact coins you sold?

>>

True, can't be 100%, but I'm .9999 sure...

They weren't regular AGE's. Don't want to be more specific as I'm trying not to ID the dealer as it's looking to me like he treated me fair for the most part.

SamByrd · March 23, 2008 4:23AM

what is the name of the shop in Long Beach please.

Greeniejr · March 23, 2008 5:16AM

<< 

<< My thought would be that you should probably trust him but approach with caution. He was probably being very realistic. A dealer must buy the piece thinking worst case scenerio. He could have bought it, put it in his case (in the bullion section), and when he has enough to warrant a melt, he will melt it. This also isnt helped by the crazy falling market. I think that 97% may not have been on the strong side of things (though not unreasonable) if it was known and marked .9999. As gecko said, it was fair so don't fret.
David >>

Does HJB coins pay stronger than 97%? >>

For known .9999 it depends. Typically we don't do it based on percentages. Back when gold was at 1000 I bought in a few prospectors at $25 (we do it in dollars not percents) back which would be 97.5%. For larger quantities we may be able to do better. Heavily scratched coins like maples and pandas we buy at $20 back. Known bars we buy at $15 back equating to 2% and 1.5% respectively. This only applies to known .9999.
Edited to add this is for 1 Oz pieces

Dealing with a new dealer

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