A couple Business Questions for Dealers
C0inCollect0r
Posts: 374 ✭✭
Hi folks,
I have spoke to a few friends who are in the early phases of considering becoming coin dealers and a couple questions came up that I said I would pose to you all for any insight or assistance you can provide. I apologize if these questions have already been addressed - I tried to look through the old posts and didn't notice these topics coming up.
1) For a small to moderately sized online dealer let's say (to start off with), is it generally best to simply operate as a sole proprietor, LLC, Corporation, or ... something else?
2) What is the role of Liability Insurance for coin dealers? I of course would figure if you were selling equipment, vehicles, etc. that could lead to any type of serious injury or lawsuits this would be crucial, but I was just wondering about the significance in the world of coin dealing. Are dealers sued with frequency? Is this a major concern?
I was wondering for example: If you sell a coin in one TPG's holder and a second TPG later says the coin is of lower grade or even a "no grade" (say in a case where a small difference in grade could mean 100s-1000s of dollars), are buyers able to sue the dealer who sold the coin? Or is that solely the issue of the TPG?
As usual any help is much appreciated and will be passed along promptly!
I have spoke to a few friends who are in the early phases of considering becoming coin dealers and a couple questions came up that I said I would pose to you all for any insight or assistance you can provide. I apologize if these questions have already been addressed - I tried to look through the old posts and didn't notice these topics coming up.
1) For a small to moderately sized online dealer let's say (to start off with), is it generally best to simply operate as a sole proprietor, LLC, Corporation, or ... something else?
2) What is the role of Liability Insurance for coin dealers? I of course would figure if you were selling equipment, vehicles, etc. that could lead to any type of serious injury or lawsuits this would be crucial, but I was just wondering about the significance in the world of coin dealing. Are dealers sued with frequency? Is this a major concern?
I was wondering for example: If you sell a coin in one TPG's holder and a second TPG later says the coin is of lower grade or even a "no grade" (say in a case where a small difference in grade could mean 100s-1000s of dollars), are buyers able to sue the dealer who sold the coin? Or is that solely the issue of the TPG?
As usual any help is much appreciated and will be passed along promptly!
0
Comments
As long as you are selling only on-line and will not have customers entering a business establishment, you probably don't need liability insurance. But you will need to have your inventory and shipments insured.
You should have disclaimers on your site about grading being an opinion and not guaranteeing that others wont disagree with the grades of the coins you sell, etc. You need to guarantee authenticity, of course, and offer a fair/reasonable return policy. And don't forget about collecting and paying sales tax, where applicable.
If you haven't already done so, you might want to check out a number of coin dealer websites and get a feel for their terms of sale.
As for general info and depending on state of residence , be aware that besides filing a federal 1040
and a state 1040 , forming an LLC or corporation may well generate a requirement to file a separate
1065 or 1120S for the feds , and similar tax returns for state . But if one goes for a Sole proprietor ,
there are different forms and etc . This may be a good starting point , which should bring you back to
the first sentence , talk to a CPA or tax attorney .