Does the average coin dealer make money selling coins?
RYK
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We all know that the superstar coin dealers make a ton of money. But what about the average dealer? I saw a lot of these this past week in St. Louis. Not many (except the dude selling Chinese modern bullion) gave off the vibe of being very successful.
Does the average coin dealer make money? Is coin dealing a hobby for a lot of these folks?
Does the average coin dealer make money? Is coin dealing a hobby for a lot of these folks?
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There are no barriers to entry in this business. Some folks in the hobby do consider it fun to set up at shows and deal coins.
If you actually figure out the volume of sales that a dealer has to do each year to make a living, I know some people would be quite surprised. Shocked even.
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<< <i>I always assumed that people went into business to lose money, and that businesses that have been in opperation the longest have lost the most money. >>
That only applies to the government.
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<< <i>I always assumed that people went into business to lose money, and that businesses that have been in opperation the longest have lost the most money. >>
That only applies to the government. >>
That is kind of a retarded statement; First of all the Government primary mission is public service and not profit and if it only provided services to the people who could pay top dollar to provide a cushion of sustainable revenue the majority of the country wouldn't have very much. Small town America for the most part is all on well fare if not completely on a personal level they most certainly on a community level. The avg/majority of tax payers don't come close carrying their own weight for what they consume?
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<< <i>
<< <i>I always assumed that people went into business to lose money, and that businesses that have been in opperation the longest have lost the most money. >>
That only applies to the government. >>
That is kind of a retarded statement; First of all the Government primary mission is public service and not profit and if it only provided services to the people who could pay top dollar to provide a cushion of sustainable revenue the majority of the country wouldn't have very much. Small town America for the most part is all on well fare if not completely on a personal level they most certainly on a community level. The avg/majority of tax payers don't come close carrying their own weight for what they consume? >>
The government loses your money. It has no money of it's own.
<< <i>As an"average" dealer, I can attest to the bread and butter market currently being supported by "junk" silver, bullion coin trading, and bulk wholesale deals of the "chaff"(bags of Lincoln wheats, Warnicks, average circ. silver dollars) and novelty items that appeal to impulse buyers. Coin-coins, as the slang goes, are not in big demand among the Joe Sixpacks. >>
Joe Sixpack? Wow. And people tell me I am a snob.
Seriously, I always did think only cultured people should collect coin-coins, so if Joe Sixpack is not buying them, perhaps that is as it should be. They can't appreciate them anyway.
<< <i>We all know that the superstar coin dealers make a ton of money. But what about the average dealer? I saw a lot of these this past week in St. Louis. Not many (except the dude selling Chinese modern bullion) gave off the vibe of being very successful.
Does the average coin dealer make money? Is coin dealing a hobby for a lot of these folks? >>
There are a few brick and mortar coin shops in my area. All make the bulk of their money buying and selling bullion and bullion related items.
These shops have been around for many years, so I assume the owners are turning a profit.
Since the gold boom, one of the owners has opened several branch stores, geared mostly to buying gold & silver.
There is a regularly scheduled coin show by me that hold 2 bourses per month.
The dealers there are clearly part-timers.
Tables cost about $50-$75.
The items offered range from junk silver and gold bullion coins, to stamps and FDCs, and to common and some really nice numismatic items.
Many are former (or still) collectors who got into dealing to sell off their duplicates and bullion and trying to make a few bucks off the buy/sell spread on gold & silver.
Many are covering their table fee and making maybe a few bucks in net profit. Many of the dealers there enjoy schmoozing with the other dealers and the regular show-goers (like me).
<< <i>We all know that the superstar coin dealers make a ton of money. But what about the average dealer? I saw a lot of these this past week in St. Louis. Not many (except the dude selling Chinese modern bullion) gave off the vibe of being very successful.
Does the average coin dealer make money? Is coin dealing a hobby for a lot of these folks? >>
I sold some coins to the dealer in chinese coins .....
He paid me about 70% of retail and I still tripled my money from purchases made about 2 1/2 years ago!
I give away money. I collect money.
I don’t love money . I do love the Lord God.
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<< <i>We all know that the superstar coin dealers make a ton of money. But what about the average dealer? I saw a lot of these this past week in St. Louis. Not many (except the dude selling Chinese modern bullion) gave off the vibe of being very successful.
Does the average coin dealer make money? Is coin dealing a hobby for a lot of these folks? >>
I sold some coins to the dealer in chinese coins .....
He paid me about 70% of retail and I still tripled my money from purchases made about 2 1/2 years ago! >>
That guy is going to own Heritage in five years.
<< <i>I think it is a serious question.
There are no barriers to entry in this business. Some folks in the hobby do consider it fun to set up at shows and deal coins.
If you actually figure out the volume of sales that a dealer has to do each year to make a living, I know some people would be quite surprised. Shocked even. >>
To net $80K after taxes at 5% profit margin, you'd need about $1.6 million in sales. Then again it might be equally surprising how much volume some dealers do.
and have an effective up to date website to bring in the truly necessary volume of business, as well
as the cash flow.
Camelot
unless some deal falls on your lap, the margin is much smaller (5-6%) and the dealer must buy $1,000,000 worth of coins.
How many average dealers do $1,000,000 worth of business a year?
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<< <i>I think it is a serious question.
There are no barriers to entry in this business. Some folks in the hobby do consider it fun to set up at shows and deal coins.
If you actually figure out the volume of sales that a dealer has to do each year to make a living, I know some people would be quite surprised. Shocked even. >>
To net $80K after taxes at 5% profit margin, you'd need about $1.6 million in sales. Then again it might be equally surprising how much volume some dealers do. >>
Actually, that would be $80,000 in gross profit dollars, before taxes, using your numbers. From that all the expenses of the business must be taken out.
It might be closer to twice those sales to make an income of $80k (which is a very good living, obviously).
$3.2 million in sales comes out to over $60,000 per WEEK in coin sales. Every week. Not easy.
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<< <i>...
Does the average coin dealer make money? Is coin dealing a hobby for a lot of these folks? >>
Not hardly. Yes, mostly a hobby. Many small dealers like to think of themselves as big time businessmen.
It depends on how you define "average". Anyway, you might be surprised at how many dealers do $1 million a month, and how many do it in an average week. Hey, it's not like money is rare.
Doggedly collecting coins of the Central American Republic.
Visit the Society of US Pattern Collectors at USPatterns.com.
<< <i>to make a $60,000 salary at 10% markup on inventory you must buy $600,000 worth of coins
unless some deal falls on your lap, the margin is much smaller (5-6%) and the dealer must buy $1,000,000 worth of coins.
How many average dealers do $1,000,000 worth of business a year? >>
One in my old home town often bought and sold around $250,000 to $500,000 a week... and they have since expanded!
Developing a client base that trusts you is probably the biggest "barrier to entry".
<< <i>I think it is a serious question.
There are no barriers to entry in this business. Some folks in the hobby do consider it fun to set up at shows and deal coins.
If you actually figure out the volume of sales that a dealer has to do each year to make a living, I know some people would be quite surprised. Shocked even. >>
Huh? No barriers to entry??? Wow, we have a serious diifference of opinion there. In fact, I can't think of many businesses that have a higher barrier of entry than does the coin business. Just so we are clear, I am not talking about somemone that decides to "dabble" or make it a part time venture.... but if you plan on making it a full time venture and a livelihood be prepared to be 7 figure capitalized, already know who all the players are and have a long term relationship with them, understand marketing as it relates to coins, and have your employees lined up in advance because its the toughest business I've ever seen to hire the right people. Besides all that, no problem!
John
John Maben
Pegasus Coin and Jewelry (Brick and Mortar)
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<< <i>
<< <i>I think it is a serious question.
There are no barriers to entry in this business. Some folks in the hobby do consider it fun to set up at shows and deal coins.
If you actually figure out the volume of sales that a dealer has to do each year to make a living, I know some people would be quite surprised. Shocked even. >>
Huh? No barriers to entry??? Wow, we have a serious diifference of opinion there. In fact, I can't think of many businesses that have a higher barrier of entry than does the coin business. Just so we are clear, I am not talking about somemone that decides to "dabble" or make it a part time venture.... but if you plan on making it a full time venture and a livelihood be prepared to be 7 figure capitalized, already know who all the players are and have a long term relationship with them, understand marketing as it relates to coins, and have your employees lined up in advance because its the toughest business I've ever seen to hire the right people. Besides all that, no problem!
John >>
I think that what Dave means is that anyone can decide to be a coin dealer without requiring a degree, a license, a physical plant, etc. In other words, I can decide tomorrow that I want to be a coin dealer and be up on running by the end of the day with an ebay store, an internet site, some ads on the BST, table reservations at local coin shows, etc. However, you cannot decide to be an interventional radiologist tomorrow and be up and running in practice. And neither of us can decide to be automobile manufacturers tomorrow and be up and running by the end of the day.
<< <i>
<< <i>
<< <i>I think it is a serious question.
There are no barriers to entry in this business. Some folks in the hobby do consider it fun to set up at shows and deal coins.
If you actually figure out the volume of sales that a dealer has to do each year to make a living, I know some people would be quite surprised. Shocked even. >>
Huh? No barriers to entry??? Wow, we have a serious diifference of opinion there. In fact, I can't think of many businesses that have a higher barrier of entry than does the coin business. Just so we are clear, I am not talking about somemone that decides to "dabble" or make it a part time venture.... but if you plan on making it a full time venture and a livelihood be prepared to be 7 figure capitalized, already know who all the players are and have a long term relationship with them, understand marketing as it relates to coins, and have your employees lined up in advance because its the toughest business I've ever seen to hire the right people. Besides all that, no problem!
John >>
I think that what Dave means is that anyone can decide to be a coin dealer without requiring a degree, a license, a physical plant, etc. In other words, I can decide tomorrow that I want to be a coin dealer and be up on running by the end of the day with an ebay store, an internet site, some ads on the BST, table reservations at local coin shows, etc. However, you cannot decide to be an interventional radiologist tomorrow and be up and running in practice. And neither of us can decide to be automobile manufacturers tomorrow and be up and running by the end of the day. >>
Point well taken. However, at the end of the day I can become all of those things you mention if I have the desire, time, intelligence, and reasonable amount of money for education. You are correct in that anyone can set up a coin dealership in a day but 99.9% would fail. So, getting back to my point, if you wish to be a successful dealer IE profitable year after year, middle upper to upper income level, then the barrier to entry is ENORMOUS.
John
John Maben
Pegasus Coin and Jewelry (Brick and Mortar)
ANA LM, PNG, APMD, FUN, Etc
800-381-2646
<< <i>
<< <i>
<< <i>
<< <i>I think it is a serious question.
There are no barriers to entry in this business. Some folks in the hobby do consider it fun to set up at shows and deal coins.
If you actually figure out the volume of sales that a dealer has to do each year to make a living, I know some people would be quite surprised. Shocked even. >>
Huh? No barriers to entry??? Wow, we have a serious diifference of opinion there. In fact, I can't think of many businesses that have a higher barrier of entry than does the coin business. Just so we are clear, I am not talking about somemone that decides to "dabble" or make it a part time venture.... but if you plan on making it a full time venture and a livelihood be prepared to be 7 figure capitalized, already know who all the players are and have a long term relationship with them, understand marketing as it relates to coins, and have your employees lined up in advance because its the toughest business I've ever seen to hire the right people. Besides all that, no problem!
John >>
I think that what Dave means is that anyone can decide to be a coin dealer without requiring a degree, a license, a physical plant, etc. In other words, I can decide tomorrow that I want to be a coin dealer and be up on running by the end of the day with an ebay store, an internet site, some ads on the BST, table reservations at local coin shows, etc. However, you cannot decide to be an interventional radiologist tomorrow and be up and running in practice. And neither of us can decide to be automobile manufacturers tomorrow and be up and running by the end of the day. >>
Point well taken. However, at the end of the day I can become all of those things you mention if I have the desire, time, intelligence, and reasonable amount of money for education. You are correct in that anyone can set up a coin dealership in a day but 99.9% would fail. So, getting back to my point, if you wish to be a successful dealer IE profitable year after year, middle upper to upper income level, then the barrier to entry is ENORMOUS.
John >>
Point taken, too. Dave did not say that anyone can be successful as a coin dealer--just that anyone, with minimal effort, can give it a shot (on ebay, with a website, at local shows, etc) and quite a few seem to do so. You cannot say the same about a teacher, nurse, judge, or Fortune 500 CEO, all of which require a significant investment of time, as well as some combination of degree programs, licensure, working up ladders, political connections, luck, etc. In other words, I can give it a shot as a coin dealer tomorrow, but I cannot become CEO of GE or a municipal judge tomorrow, and perhaps time becomes one of the major barriers to doing all of these things.
No real money invested.....just great contacts....
I give away money. I collect money.
I don’t love money . I do love the Lord God.
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<< <i>
<< <i>I think it is a serious question.
There are no barriers to entry in this business. Some folks in the hobby do consider it fun to set up at shows and deal coins.
If you actually figure out the volume of sales that a dealer has to do each year to make a living, I know some people would be quite surprised. Shocked even. >>
Huh? No barriers to entry??? Wow, we have a serious diifference of opinion there. In fact, I can't think of many businesses that have a higher barrier of entry than does the coin business. Just so we are clear, I am not talking about somemone that decides to "dabble" or make it a part time venture.... but if you plan on making it a full time venture and a livelihood be prepared to be 7 figure capitalized, already know who all the players are and have a long term relationship with them, understand marketing as it relates to coins, and have your employees lined up in advance because its the toughest business I've ever seen to hire the right people. Besides all that, no problem!
John >>
I think that what Dave means is that anyone can decide to be a coin dealer without requiring a degree, a license, a physical plant, etc. In other words, I can decide tomorrow that I want to be a coin dealer and be up on running by the end of the day with an ebay store, an internet site, some ads on the BST, table reservations at local coin shows, etc. However, you cannot decide to be an interventional radiologist tomorrow and be up and running in practice. And neither of us can decide to be automobile manufacturers tomorrow and be up and running by the end of the day. >>
Point well taken. However, at the end of the day I can become all of those things you mention if I have the desire, time, intelligence, and reasonable amount of money for education. You are correct in that anyone can set up a
coin dealership in a day but 99.9% would fail. So, getting back to my point, if you wish to be a successful dealer IE profitable year after year, middle upper to upper income level, then the barrier to entry is ENORMOUS.
John >>
Point taken, too. Dave did not say that anyone can be successful as a coin dealer--just that anyone, with minimal effort, can give it a shot (on ebay, with a website, at local shows, etc) and quite a few seem to do so. You cannot say the same about a teacher, nurse, judge, or Fortune 500 CEO, all of which require a significant investment of time, as well as some combination of degree programs, licensure, working up ladders, political connections, luck, etc. In other words, I can give it a shot as a coin dealer tomorrow, but I cannot become CEO of GE or a municipal judge tomorrow, and perhaps time becomes one of the major barriers to doing all of these things. >>
I couldn't have said it better myself.
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1. The "average" dealer does not do as well as the Yaffees.
2. Anybody with a few crummy coins and a few hundred bucks can set up at a show (which really supports the "no barrier" argument).
<< <i>
<< <i>
<< <i>I think it is a serious question.
There are no barriers to entry in this business. Some folks in the hobby do consider it fun to set up at shows and deal coins.
If you actually figure out the volume of sales that a dealer has to do each year to make a living, I know some people would be quite surprised. Shocked even. >>
To net $80K after taxes at 5% profit margin, you'd need about $1.6 million in sales. Then again it might be equally surprising how much volume some dealers do. >>
Actually, that would be $80,000 in gross profit dollars, before taxes, using your numbers. From that all the expenses of the business must be taken out.
It might be closer to twice those sales to make an income of $80k (which is a very good living, obviously).
$3.2 million in sales comes out to over $60,000 per WEEK in coin sales. Every week. Not easy. >>
I don't know how one would define "average" with respect to this question, but I think Dave's numbers for gross sales might be too low if you want to take home $80k on a 5% profit margin. There are some expenses associated with this business that don't always come to mind for folks who think about the hobby-industry, but they add up.
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What about the small time dealer who searchs for days and weeks to find raw top pop (50's to 80's ) modern type coins, has them graded and sells hem on the net?
any future in that?
No, he does not. The "average" dealer makes money when buying coins.
Time and talent apply to all professions.
Great thread! I think everyone is right so far ...
K
My 1866 Philly Mint Set
In God We Trust.... all others pay in Gold and Silver!
Like the majority of my colleagues, I started young and with minimal capital. There were no significant "barriers to entry".
As for "barriers to success", there are many, but I'd put inexperience and ignorance at the top of the list.
Doggedly collecting coins of the Central American Republic.
Visit the Society of US Pattern Collectors at USPatterns.com.
I guess if your point is that it would be very difficult for someone to come from another business jump into the numismatic A-League, I would have to agree. But it's hardly unusual for someone to start at a lower level and quickly build a good business.
Doggedly collecting coins of the Central American Republic.
Visit the Society of US Pattern Collectors at USPatterns.com.
Uh oh.
Doggedly collecting coins of the Central American Republic.
Visit the Society of US Pattern Collectors at USPatterns.com.
Wondercoin
-Keith
<< <i>
<< <i>
<< <i>I think it is a serious question.
There are no barriers to entry in this business. Some folks in the hobby do consider it fun to set up at shows and deal coins.
If you actually figure out the volume of sales that a dealer has to do each year to make a living, I know some people would be quite surprised. Shocked even. >>
To net $80K after taxes at 5% profit margin, you'd need about $1.6 million in sales. Then again it might be equally surprising how much volume some dealers do. >>
Actually, that would be $80,000 in gross profit dollars, before taxes, using your numbers. From that all the expenses of the business must be taken out.
It might be closer to twice those sales to make an income of $80k (which is a very good living, obviously).
$3.2 million in sales comes out to over $60,000 per WEEK in coin sales. Every week. Not easy. >>
While I didn't state it as such, my calculation was an estimate of the sales you would need to get the equivalent of a take home pay of $80K from a "day" job. My assumption was that you would net 5% profit on your sales after all expenses. If you chose to keep your salary separate from the business, then you'd need a gross salary of about $120K to generate $80K net.
<< <i>to make a $60,000 salary at 10% markup on inventory you must buy $600,000 worth of coins
unless some deal falls on your lap, the margin is much smaller (5-6%) and the dealer must buy $1,000,000 worth of coins.
How many average dealers do $1,000,000 worth of business a year? >>
A small B&M will make a lot more than 5 to 6%, you have to to make a living. A million in sales is about 3500 dollars a day on a 6 day week. That is a big daily number for most small businesses.
You have so many different scenarios with small dealers, i see some at most shows and they have the bulk of the coins they had at the last show, the show before that and the year before as well as the prior year.
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working on proof shield nickels # 8 with a bullet!!!!
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<< <i>I'm surprised we have as many coin dealers as we do. I thought 10 years ago e-bay would kill off most of the small and medium dealers. Because most collectors want retail money not dealer money for coins. Leaving just the high end dealers...... who really is going to buy a raw $50,000 coin off e-bay? PCGS, NGC and some other grading services made the internet market possible. Boy was I wrong.... e-bay and internet made small dealers bigger! The days of the crusty old table dealer only is over. >>
You have a large segment of society that puts off paying bills until after the due date, therefore they do not have the time to list it on ebay. They will be homeless before they recieve the payment. Some people are just lazy, and if they did not personally pay for the coins they are about the sell, they will just take what is offered. I have seen that time and time again.
I would love to see the how many coin dealers that opened the doors with 7 figures in the bank. I have some access to fairly big money but it would be cheaper for me to go to the bank before going that route. I doubt my banker would deposit 6 figures in my bank account if i told him tommorow i was going to become a coin dealer, and if i had 7 figures being a coin dealer would be way down the list.
NGC registry V-Nickel proof #6!!!!
working on proof shield nickels # 8 with a bullet!!!!
RIP "BEAR"
The few dealers I know anything about have another business in addition or a spouse who has a career.
NGC registry V-Nickel proof #6!!!!
working on proof shield nickels # 8 with a bullet!!!!
RIP "BEAR"
For some, coin dealing is a yeoman pursuit that yields little or no profit.