Dealer to Dealer bourse sales
mumu
Posts: 1,840
This question sprouted up for me from ThePennyLady's FUN report thread. Do dealer to dealer pre sales and exchange of material on dealer only days ultimately drive up prices for collectors?Or do they have the opposite effect of allowing dealers to trade out of coins they might be semi buried or stuck on for whatever number of reasons and ultimately work to liquify the market a bit?
Regardless of the answer to me it seems that at a venue like a coin show where at the abstract level a table is a table and the marketing/location et cetera of a coin shop is not in play to hinder sales by certain factors that can stagnate inventory at the shop level, the exchange seems like a moot point that just serves to change which coins end up on which tables. I do realize some dealers will have a following at coin shows which in effect is the existance of a marketing variable, but in the end does anyone really care if you found that perfect coin you were looking for at table x or table y? This pre dealer to dealer exchange to me seems like a guarantee to increase costs for collectors once they are allowed in.
Note: Ive never been to a show so I might not have any idea what im talking about.
Regardless of the answer to me it seems that at a venue like a coin show where at the abstract level a table is a table and the marketing/location et cetera of a coin shop is not in play to hinder sales by certain factors that can stagnate inventory at the shop level, the exchange seems like a moot point that just serves to change which coins end up on which tables. I do realize some dealers will have a following at coin shows which in effect is the existance of a marketing variable, but in the end does anyone really care if you found that perfect coin you were looking for at table x or table y? This pre dealer to dealer exchange to me seems like a guarantee to increase costs for collectors once they are allowed in.
Note: Ive never been to a show so I might not have any idea what im talking about.
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Comments
Thats how we make money... connections and knowing who buys what.
I think it helps everyone. As a collector you go to dealers who specialize in your area of collectiing, and they then have better inventory.
It's simple, if you have clients in an area of specialty, you'll pay a bit more for the right coin.
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Sometimes if it wasnt for dealer to dealer sales, a show might be a bust.
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<< <i> Regardless, if a coin is overpriced, it's likely not going anywhere any time soon. >>
This is very true. At some point it hits the end of the road.
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given from dealer to dealer. So at the end of the day I do think it drives up prices. I think the only advantage is first look.
<< <i>I suspect it's actually collectors that drive prices up. >>
Supply and demand doesnt care if if you are a dealer or collector. Sure a collector's need can spark a dealer's demand but the dealer sets the starting point based on many of his own personal factors and to ignore the effect a dealer has on price IMO would be wrong.
When the market is headed down, the same effect is probably insignificant as few dealers want to stock anything on just speculation.
I do agree that without a healthy dealer to dealer flow, there would probably cease to be a coin market as we know it today.
roadrunner
<< <i>I do agree that without a healthy dealer to dealer flow, there would probably cease to be a coin market as we know it today. >>
A dealer has to move stock to stay in business. A dealer may move an item that hasn't sold to a collector to another dealer at or below cost. A dealer needs cash flow to stay in business.
<< <i>That's my point... without collectors there wouldn't be demand. We all know some items have very limited supply and are practically worthless while others have an overabundance of supply and cost a ton. Supply only matters when there's a demand - collectors. A dealer would be very foolish to buy/stock items that have no demand - collectors. Without collectors there are no dealers. >>
Well I dont disagree with you at all but I think you are taking it out a few levels too abstractly. If we accept that a market exists, and the supply and demand is in a good balance, what effect does this one particular paradigm of having dealer only sessions at shows have on collector ovehead. I was merely trying to isolate this particular fact about the organization of shows. The question for me spawns from the fact that as a still new member to the coin collecting world, I was surprised a couple of years ago to find out that the shows had these dealer only days. Clearly I understand their benefit to some degree, as much as I can from my perspective, but I was just curious if anyone thought this drove prices up on commonly traded material since there is an extra layer of profit added before the coin is available to the public.
<< <i>I am sure prices go up, but not as much as you think. Based on setting up at a local show twice, I have noticed that 90% of sales come from other dealers (I know mine did). The only dealers that are able to resell at a higher markup are those that have strong followings from collectors. Some collectors only want to buy from specific people and no one else, even if they pay a premium.
Sometimes if it wasnt for dealer to dealer sales, a show might be a bust. >>
This highlights my point. I think I know you are pretty much primarly a collector first based on our interactions in private and in following your posts thruout the past couple years. But you decided to dabble on the selling side as well and as such you set up at these 2 shows. Now I am sure you were hoping to get retail prices or close to for your coins in order to turn a profit, so did you budge when you ended up selling to another dealer so that he could have some wiggle room and make a profit as well? I am guessing that if you did it wasnt much and that it was probably along the same discount you would have gien any buyer during the open session?(just a guess) A such the point is if these sales you have mentioned took place on dealer only days, by the time the collectors were allowed in, they had to pay that other dealer more than they would have had to have paid you if they wanted your coin.
None of this is an anyway a slam at dealers, I hope no one takes it that way. As much as a pipedream as it may be for me, especially after seeing the realities of how hard it can be first hand recently, I would like to one day be very active in the buying and selling, so I am just trying to look into sme of the areas I am not familiar with.
<< <i>I was just curious if anyone thought this drove prices up on commonly traded material since there is an extra layer of profit added before the coin is available to the public. >>
This is assuming that Dealer A would sell to a retail customer for the same price he would sell to Dealer B. I would suggest that, if Dealer B's price is the generally accepted retail price, Dealer A would be just as likely to sell to a retail customer for that price, too.
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