Franchising a coin company/business?

coinfreak499

If franchising a coin company (primarily a coin dealing type business) has been done, I am not aware of it. If it has not been attempted yet, what do you think of it? Would you buy coins from a company that also has stores in other areas? Would you trust a larger, more corporate company better than your local dealer? What do you think of this idea, do you think it will attract others into the hobby or will “old fashioned” collectors be deterred from such a store?

Would this ruin coin collecting for you if a franchise like this was a huge success?


Sorry for all the questions, I was just thinking about this scenario.

-Dan

RWB

The hobby is too small to support this kind of business model. A franchise works best for consumable goods or services with short-term repeatability: burgers, cookies, rug cleaning and the like.

NHSBaseball

I want to open my own "Muffinsmommi" or "Johno1733" franchise here in Baton Rouge!

options26

It all depends on the people you have operating the franchise. A large corporate owned entity ran by down to earth friendly fair people, would not turn me away. But a large corporate owned, policy/margin driven B&M would surely get under my skin. I can picture not being about to bargain price because they need 86% margin and not caring about losing a customer.

My question to you, if I am locally owned and operated catering to the immediate area, why would I need a big name backing me?

The main reason in my opinion to owning a B&M is for purchasing inventory, if thats the case, those people that go to hotels once a month with the full page ad in the paper have the ideal thing going.

coinfreak499

<< <i>The hobby is too small to support this kind of business model. A franchise works best for consumable goods or services with short-term repeatability: burgers, cookies, rug cleaning and the like. >>



(IMHO)I think coins are a very big market considering, especially for a hobby. There are collectors coins, bullion, and supplies to be sold. With gold and silver in such demand as an alternative to stocks, who's to say the coin market could not encounter further expansion?

Respectfully,
Dan

rgCoinGuy

One idea if someone was to consider this, would be to bulk submit a lot of modern widgets to distribute amongst the stores as basic stock, along with mint and proof sets, etc. Also a good supply of gold and silver bullion, to be traded as such, would be at each store. More rare coins would be kept at whatever store they are purchased from, or if bought at auction by "corporate" at one of their more prominent stores in a large market, but be made available to other stores through a mulitple picture listing database system shared by all franchisees.

Just thinking out loud.

coinfreak499

<< <i>My question to you, if I am locally owned and operated catering to the immediate area, why would I need a big name backing me?. >>



I am assuming you are speaking as if you were/are a dealer? If so, with a big name there is more exposure to the public (if this is marketed correctly), and a wider customer base. The advantage that I see in a franchise compared to a local coin shop, is that there is a larger web of inventory between multiple shops than one single shop. It would be easier to move the inventory as well, the coins would all stay in the same business so there would be no need to make a profit as a coin dealer selling to another coin dealer. This will keep the prices down for the customer.

options26

<< <i>

<< <i>My question to you, if I am locally owned and operated catering to the immediate area, why would I need a big name backing me?. >>



I am assuming you are speaking as if you were/are a dealer? If so, with a big name there is more exposure to the public (if this is marketed correctly), and a wider customer base. The advantage that I see in a franchise compared to a local coin shop, is that there is a larger web of inventory between multiple shops than one single shop. It would be easier to move the inventory as well, the coins would all stay in the same business so there would be no need to make a profit as a coin dealer selling to another coin dealer. This will keep the prices down for the customer. >>



I could see having a larger advertising budget because you have many operations contributing, but in this day in age, I think the internet is the way to go. You can attract customers worldwide and move a lot of inventory without the $2k a month each overhead of having many shops. 1 big place moving a ton of stuff weekly with low overhead and your able to keep costs even lower for the customer. 10 B&Ms at $2k plus salaries each a month is a lot of coins to break even. Now add the franchise fees and % on top of that and I'm not sure if the internet is not the way to go. Locally you can always maintain a mailing list. Just my $.02.

charley

Tried by department stores in the past, stamps and coins. Sears sold Mint issues until 1994 at the jewelry counter. I think the internet would be a factor that precludes this. I also think pawn shops and local auctions and coin shows would have an impact. I can see some merit to taking limited space on a trial run inside a B&M brand name store and see if it has potential. Respectfully, John Curlis

bidask

What 'big name' would you suggest a franchise use?

charley

Do you mean big name coin company that would issue franchise rights, or do you mean big name B&M brand name store? Respectfully, John Curlis

coinfreak499

Very good responses so far, thank you for your input.
After reading these posts, here are my thoughts:
Yes, a website would have less overhead costs. But a single store that is very large might not be the answer. There would be few cities that could support an industrial-sized coin shop. Possibly just a few coin shops with most of the sales being over the Internet would be the most profitable way to go. I don't know, just brainstorming.

Julian

Back in the 60's, there was a franchise numismatic organization called Midas. I do not believe that any of the original owners are still in business, or whether there are any active Midas Coin Centers still in existence.

Walmann

<< <i>The hobby is too small to support this kind of business model. A franchise works best for consumable goods or services with short-term repeatability: burgers, cookies, rug cleaning and the like. >>



I agree. Combine the above with the fact that franchise operations relie on standardaztion of goods and services. Coins for collectors really aren't a product where each store can offer the same quanties and qualities.

Also the nature of the coin business would expose the corporate office to alot of risk if some of the franchises were doing shaddy dealings. A difficult business to monitor from afar in regards to moral exposure.

This is not to say an individual could not operate in a two or three major cities with the right people working for him or her. Hard to forsee the opportunity for a large operation in multiple states though with the advent of internet taking such a large part of the market share.

pheh

My opinion is that it would require a more diverse inventory than just coins. I believe coins, paper money, comics, relics, autographs, and other ephemera would work. However, while I believe this type of store would be appealing enough to drive customers into it, staffing it with people competent enough to answer general questions would pose quite a problem.

coinfreak499

thank you all!

and a ttt for the morning crew...

bidask

How much does one need to start a franchise.?)

atom48coin

<< <i>My opinion is that it would require a more diverse inventory than just coins. I believe coins, paper money, comics, relics, autographs, and other ephemera would work. However, while I believe this type of store would be appealing enough to drive customers into it, staffing it with people competent enough to answer general questions would pose quite a problem. >>



I agree. Where I live there are several exclusive coin shops, but there is one shop that caters to collectors of coins, comics, cards (i.e., baseball) and other collectibles. I think you would have to be diverse, and offer some appeal to a much wider market to sustain yourself in some locations.