Which category of person provides more liquidity to the marketplace-- wholesalers or the buying pub

Longacre

Which category of person provides more liquidity to the marketplace-- wholesalers or the buying public? So discuss.

WTCG

Wholesalers. Selling to the retail public usually means a higher profit margin, but wholesalers buy much more in volume.

COALPORTER

I would think wholesalers and other dealers. They provide dealers with a way to move allot of material at a time.

Lakesammman

If the buying public quits buying, there is no liquidity.

Lewy

As Lakesammman implies, it is a symbiotic relationship.

When coins are selling at prices higher than they were last month, then the answer would be wholesalers.

When coins are selling at prices lower than they were the previous month, then the answer would be the buying public.

Isn't that how "liquidity" works in economic terms?

Billet7

I think it can shift, depending on demand, but generally I would say wholesalers...simply becuause of volume. When there is a huge "fad" influx of collectors (like state quarters were early on,) then I think the liquidity will shift temporarily to the buying public.

au58

This is a good question.

Think back to some of QDB's writings where he suggests prudence by telling everyone who would listen over and over that "the coin market is very thinly capitalized", or words to that effect. Truer words have not been spoken.

Take one snapshot, as an example - Let's say the coin market, and Morgan Dollars in particular, have been flat for the last year. But we know that a lot of Morgan Dollars have changed hands. What is the source of that liquidity?

I contend that even in a flat market, very few dealers take a loss. This means that the primary source of liquidity is the end consumer, i.e., collectors, and much of that liquidity is provided when collectors take a loss.

PerryHall

<< <i>If the buying public quits buying, there is no liquidity. >>



Bingo! The collector is the ultimate consumer of the coins.

RYK

I contend that even in a flat market, very few dealers take a loss. This means that the primary source of liquidity is the end consumer, i.e., collectors, and much of that liquidity is provided when collectors take a loss.

In that case, RYK has been a terrific provider of liquidity to the coin market.

sinin1

how about the eBay hosting platform?

Ahrensdad

I think it is the wholesaler do to volume, but as others have said, without the end customer there is no coin market.

tyler267

<< <i>If the buying public quits buying, there is no liquidity. >>



I agree, but occasionally in the past the dealer community has made huge profits in bullion and plowed the profits(liquidity) back into coins.