Perhaps what this hobby really needs is to eliminate the coin dealer entirely??

SeaEagleCoins

Let's see...

From what I gather, it is believed that the average dealer works on a 10% margin...I really do not see how that would be possible...and on bullion deals the margins are supposed to be even smaller...

First...let's look at a dealer with a B&M in a state that has a sales tax of say 8%...

Unless the dealer ups their margin to 18% they would have to charge sales tax...which collectors do not wish to pay...

Now...they have major overhead... I know of a local B&M... the proprietor spends $50,000 a year for advertising... $5000+ a month for rent... there is security, insurance, utilities, paid help and other misc. expenses... we are not even talking about a salary for the dealer yet... and we are looking at over $100,000 a year just to keep the doors open...

Add on the fact that many collectors would want the dealer to pay them around bid and sell for around bid... and unless the coins are brought to them, how on earth are they to freshen their stock... and let's not forget that we expect the dealer to make a fair offer on ALL the coins we bring them, including the dreck... but they should only have PQ coins and with stickers on slabs... and they should have fresh stuff everytime we visit...

And they should be completely knowledeable about every coin and every striking charachteristic and variety and error and if they are not we are free to take advantage of them... but if we do not know everything the dealer is obligated to educate us...

So this perfect dealer needs a steady flow of new stock and needs to sell a minimum of $1 million a year just to keep the doors open... and work 10+ hours a day... 6 days a week... and always have a smile... and always be available... etc etc...

If the dealer wants to earn say $100,000 a year... that's another $1 million in sales... and they better not make any bad purchases or they are "in the hole'...

...and let's not forget... the dealer has to have at least a cool mil or so just to open the doors in the first place...


is the picture beginning to come clear?


the "perfect" dealer is an illusion...

Yes...there are the "good guys"... the rare few with good connections with access to some of the best of the best material... and they can "service" a good portion of some of the collectors out there...

But what about the "album filler" collectors...buying the $1 to $100 coins? They take time to take care of... their coins take time to grade, price and inventory... sometimes they take even more time than the seasoned collector buying 5 figure and up coins...

This post is already too long... but do you catch my drift?


I'll wrap it up with... let's just get rid of the dealers...why let them be the middlemen in our hobby and support their $100,000 plus or minus overheads... and pay their salaries...let them get a job like the rest of us... lets just trade amongst ourselves... or maybe we can just go to auction houses and give them the 15-20% to handle the "trades"...or we can start up a "marketplace" and call it ebay...yeah...that's the ticket...


but then...who then, would we blame for all that's wrong with our hobby?




(have no fear...I have my asbestos suit on)

rgCoinGuy

Didn't you just post that you should post these posts in private message posts, or do I have my posts mistakenly posthumously posted incorrectly?

SeaEagleCoins

<< <i>Didn't you just post that you should post these posts in private message posts, or do I have my posts mistakenly posthumously posted incorrectly? >>







nah...this is not really about my personal dealings... just a bunch of rambling about what I am beginning to glean from the composite of posts I read by the general collectors...

we collectors are difficult to please...and i often wonder what it is we really want...

mostly our cake and to eat it to... but no soup for you... it seems to me...

MrEureka

Sounds like a good idea!

ambro51

Dealers serve a valuable purpose...in fact today, one young fellow was going over my gold dollar want list, and he asked if I need an 1854 C.

Bochiman

I think some dealer is taking things a bit personally and going way out to left field with some things
You should go buy a few 2008W/2007 SAEs to make you feel better....I hear they may be in the redbook someday

Bear

I say get rid of the dealers and then the collectors.

We don need neither one. As long as we have the

memories.

shottaker

it is true that bullion is far tighter to deal with. Its a widget item that anyone will call 10 places to get a quote.
We usually work on $10 for 1 oz eagles when we buy them. Sad but true.
90% has a10-15% margin.

Better stuff that will go in the case is a little better margin, and I wont lie its a 30-40% profit margin for me personally. BUT thats with the markup to retail, and no I dont buy at greysheet. You can buy better off ebay in this market and not buy from the public at all.
20-30 back of sheet is the norm in this market. Some things are worse.

Now If I only did 1 million a year I would be out of business as a large portion of our business is bullion.
I can sell 1 million in gold eagles and only make 10k.
Would prefer not to touch it but your not a real coin dealer unless you sell 1 oz eagles according to john q public.
I dont stock any gold anymore in this market and basically just phone in orders as needed.

Unknown

This content has been removed.

SeaEagleCoins

<< <i>I think some dealer is taking things a bit personally and going way out to left field with some things
You should go buy a few 2008W/2007 SAEs to make you feel better....I hear they may be in the redbook someday >>




Hey dudes and dudettes...i'm just having some fun... it's ok to have fun, isn't it?

I don't drink or do any of that other stuff (see sig line) anymore...

Jeez...I gotta get my jollies somehow...

ACactions

You know Larry- The sad thing is that every aspect of your life their are Self Righteous SOB's that know everything and will not hesitate to tell you how horrid you are for XYZ; Especially when hiding behind a keyboard. Unfortunately, it seems that the mean age has dropped significantly on this board and hence the magnitude/level of insight and actual numismatic conversations.

I enjoy coins tremendously; I come on to try and learn but more than that- I like to see coins- I love looking at coins, currency and scripophily- So, I think it is just a matter of ignoring the ones that get your goad and focus on people who add to your knowledge or your collection-


You run a great business- Have offered to assist me on numerous occasions and I put you in the category of good people who bring knowledge and professionalism to this industry.

Take care

John

bidask

What about dealers who don't have primary jobs outside numismatics?

Halfhunter06

In support of the OP here I have a couple examples

1. It is better to buy and sell to other collectors instead of dealers.
The buyer gets a price over what most dealers would give and the seller gets the coin for lower than most dealers would sell them..its a win-win scenario at the expense of the dealer.
This happened to me at the ANA Show last year in Baltimore.

2. They say that 70% of all the good deals are made BEFORE the show even opens up, leaving us collectors out. This happened to me at the 2007 Colorado SPrings Coin show. An 1885 V nickel in NGC AU 58 was being offered at a GREAT price, but before the show opened another dealer took it and when i saw it he wanted 600 dollars more than he got it for..the label was still on the holder!
I was in a bad mood all day, and not feeling too good about dealers and their greed.

HTubbs

<< <i>

First...let's look at a dealer with a B&M in a state that has a sales tax of say 8%...

>>



Best thing about living in Florida, coins are tax-free!

SeaEagleCoins

<< <i>

<< <i>

First...let's look at a dealer with a B&M in a state that has a sales tax of say 8%...

>>



Best thing about living in Florida, coins are tax-free! >>




yeah...but ya all got Alligators and hurricanes and such...kinda balances the scales a bit...

MikeInFL

"Perhaps what this hobby really needs is to eliminate the coin dealer entirely??"

Doing my best Longacre impression...

Now there are few that love coin dealers more than MikeInFL, but I must admit giving this idea (i.e. a dealerless coin market) some thought. It seems to me that the market as a whole would be much more efficient, particularly with the technology available today, if the dealer overhead were removed from the market and buyers and sellers could be efficiently matched. With third party grading and an efficient market with modern technology, it seems to me that the need for the dealer is lessened.

If any of my dealer friends are reading this...remember I was just aping Longacre.

Have fun...Mike

SeattleSlammer

I'd sure miss the dealers that specialize in eye candy.
It's nice having other people find those exceptional coins and offer them all in one spot.
I don't mind paying markups for that convenience.

RedTiger

Top dealers still have two Ferrari's in the garage, or these days a Gulfstream plus a yacht, or at least the option to buy that if that is what they want. However, it is like a lot of businesses, the top 1% to 5% of dealers make big money, there is second tier group that does well, and maybe can afford a nice Mercedes, but not the multiple Ferrari's. There is a third level that makes a decent middle class living. Then there is a large marginal group just does enough to get by, perhaps on Ebay, perhaps working the aisles at shows, or at the flea market and sometimes it is less than enough. Those that can't do enough to get by, get out. No harm in that, that happens in every industry.

pennyannie

If you got to rip someone to pay the bills you should change lines of work. That has got to be stressful looking for suckers all the time.

Quite a few businesses run on 10 percent but i do not think coin dealers can. ( at least not many) I wonder what the average heritage percent is? Some buyers pay 15 percent but then some sellers get 105 percent or higher of hammer.

Most coin dealers are not Brick and Mortar owners but rather ebayer traders and vest pocket dealers. Minimal expense there. Depending on the definition i may even qualify although i generally go for at least a 30-35 percent mark up myself.

Most dealers bring this own themselves with the bold face lies they spew at shows. I have heard so many times that a dealer is buried in a coin or that he only wants to clear 20 bucks on a 500 dollar coin. LOL If they can not figure out the market they should step aside. you always here that the coin you are trying to sell a dealer at a show in a pcgs 65 holder is really just a 63 and then the subtract back of bid to come up with a price if they are even that generous. ( all the time telling you they make 20 bucks on a 500 dollar coin or ...) Walk back buy the same dealer the following day and pick up a few coins just to hear, that pcgs 65 coin is really a 67 and he has to have 67 PQ money for it.

Maybe the collectors cause all of this. I do not begrudge a dealer a profit. I would expect a dealer that sells acoin for few hundred bucks to clear 25-35 percent with the percent going down as the coin goes way up in price toward a 100k. And a lot more profit on coins under 100 bucks if possible. But 2 bucks to 5k plus is just wrong no matter what field you are in.

I thought coin dealers that were members of the ana OR OTHER organizations pledged not to rip the uninformed, but that profit was okay. Every field has it share of good and bad from doctors to lawyers to real estate sellers. YOU JUST HAVE todecide what side you want to stand on.

Close to where i live is a OLD OLD TIME COIN DEALER and Barber. He probably makes more cutting hair. He is a hoot to BS with on all subjects. I think he is a least 80 and will be missed when he is gone. He even commented to me a few weeks back that he can no longer search thru wheat cents due to the size. I am not sure if he is telling the thruth

I doubt if most B&M dealers even like many vest pocket dealers.