"I will give you $x for the coin, or $x+y if you consign it"--is this a subtle way to see

Longacre

I was at a coin show recently, and I wanted to sell one of my excessively rare coins. I spoke with a very prominent dealer, and told him I wanted to sell. He gave me two prices. The first was a payment in cash, right on the spot, of $x for the coin. The second option was a price of $x+y if I chose to consign the coin to him for at least two months.

Does anyone know if this is standard practice, or is it a subtle way for the dealer to see if you're a desperate seller? Of course, if someone needed to liquidate a coin quickly, he would jump all over the immediate (though lower) cash offer, but if he was a leisurely seller, he could wait for 2+ months to complete the transaction. Perhaps this is standard practice and there is nothing nefarious about this offer, but I was curious.

Barndog

sounds like a very good offer. I've found that if I am willing to wait, I do get better prices from consignment with the right dealer.

291fifth

In the case of a consignment he preserves all of his capital and does not assume any market risk that is associated with ownership in what may be a down market.

It could also be a hint that the dealer is short of cash. Do you want to risk consigning a coin to a dealer who is short of cash? If your coin sells will he be able to pay you on time or will you start getting the "stall?"

FatMan

If he offers the dollars up front then he is not testing to see how desperate you are. If he tries to find out before the offer he may very well be fishing to see how low he can go. Selling coins on consignment is a good deal for both seller and dealer if you don't need the money ASAP. The dealers margin is a bit lower, but the transaction has no impact on his cash flow. He can take the money he would have spent on your coin and he can buy another thereby making that money work twice as hard making him a profit. Plus, dealer assumes no market risks. But, of course, you already knew that.

partagas

In the case of a consignment he preserves all of his capital and does not assume any market risk that is associated with ownership in what may be a down market.


I agree 100% with the above statement

ziggy29

Seems like that would be fairly standard. I would think a dealer wants a greater margin when they are using their own money rather than in a consignment, where they are only providing a service and not tying up their capital or assuming market risk.

RYK

In the right circumstances, it could be a good deal for both parties. Be careful not to enter a consignment deal where all you get is "x".