Dealer ask prices

drfish

I have started looking for some extra nice type coins. While researching a few attractive coins I saw on dealer websites, I found that some were recently purchased at auctions. Often the dealer is asking 25-30% over the auction price. Do most dealers negotiate their advertised prices? What % would you offer over the auction price?

AnkurJ

It depends how badly I want the coin and how rare it is. If it comes up often, wait for another. If its very rare, 10-15% over is a good offer.

BAJJERFAN

Is that 25% over hammer price or 25% over hammer plus juice?

TomB

There are at least three things to keep in mind with your experience. The first, and perhaps most important, is that a certain percentage of time a dealer has not purchased the coin in question out of the recent auction (assuming "recent" means anywhere from one-to-six months in the past). Therefore, there may have been one or more buying/selling increments built into the coin as it changed hands. Also, many dealers are more likely to discount pieces for repeat or issue-free clients than to newer or high maintenance clients. Lastly, if a coin is newly listed it will more likely have a firm or near-firm price vs. a coin that has been in inventory for a longer period of time. If I were a collector who was looking through a dealer's website and had a question regarding the price needed I would send an email to the dealer and politely ask about the coin, the ability for seeing it on approval and what they needed for the coin.

MikeInFL

<< <i>I have started looking for some extra nice type coins. While researching a few attractive coins I saw on dealer websites, I found that some were recently purchased at auctions. Often the dealer is asking 25-30% over the auction price. Do most dealers negotiate their advertised prices? What % would you offer over the auction price? >>



In my opinion, that is par for the course for most auction lots I've tracked into dealer inventories as well. As Tom points out, that sometimes means the coin's already gone through more than one hand before arriving in Dealer X's inventory, so I would be careful from drawing conclusions. That said, you can find out quite a bit by being there in person, taking good notes, and checking the winner's inventories to back into the real markup that some ask -- when I did, the results were eye-opening.

Getting past that and answering your question, I would ask for a discount (typically by saying "what price should I make out the check for"), and am happy to get a discount when I do. This typically results in a discount off of between 5 and 10%, but I do not haggle beyond that as I find it in poor taste, personally.

WTCG

There is no set markup in this industry. Sellers normally price their coins at the highest number they can while maintaining salability. Some coins are sold at multiple times cost while other coins are sold at a loss. It works both ways.

BillJones

Sometimes you have start a little high so that you can come down.

When I first started as a dealer I tired to have firm net prices, but it just didn't work. People expect a discount even when the price marked is perfectly fair or even a bargain. It just seems to be a part of human nature to negociate a "break" at coin shows.

Many people don't the market well enough to what is fair. They just look at the price catalog or Gray Sheet and expect to buy at those prices.

Justacommeman

What if you were a dealer and you had a maximum bid of $5000 on a particular lot for inventory because thats what you thought the coin was worth. Now let's say that lot actually hammers for $4000. What do you sell the coin for using Ankur's 15% comment? $ $5750 for what you were prepared to pay or $4600 for what you actually landed it for? The answer may lie somewhere in between.

Next bid doesn't always mean that's what you would have won the coin for if you bid in that auction. It may have took three or five more bids if you were actually in the fray.

MJ

BryceM

Some of this depends on what sort of relationship you intend to have with the dealer in the future. For a dealer who will go out of his way to find that certain something, call you first when he finds it, and keep it on the back counter for you at the show, I'd tread lightly. A solid relationship is worth more than the dollars you save by extra-aggressive negotiating. Great service can help you score the goodies that the general public doesn't get the same access to. If the dealer is in some out-of-the-way place and you don't see having more than one or two transactions, sure, offer something a bit low and see what happens. Sometimes you can negotiate a $1,000 swing just by asking. I don't know about you but it takes me quite a while to actually earn that same money. It doesn't hurt to ask, but don't be rude. If you are, the dealer might take his ball and go home - game over.

Truth be told though, you can often do quite well by skipping the middle man and buying directly off the auctions. It's harder if you can't actually see the coins in-hand before the auction. It can help if you have a set of hired eyeballs on the ground who can give you info. Even better is a friend who understands what you're looking for. If you're the underbidder to the dealer you eventually buy the coin from, you'll end up paying way more than the next bid increment to get the coin.

AnkurJ

For what its worth, I sell my coins about 5 to 10% over my cost. In some cases I bought the coins years before and they have gone up in value. I do however start a little higher so I have room to discount. Everyone asks for a discount, its human nature.
I just sold a coin for $395 that I bought for $375. I paid strong for the coin so couldnt ask too much more.

amwldcoin

I'll relate a funny story from 10 or so years ago. I had a regular customer who was tough as nails. It might take a show or 2 but he would buy. I could never offer him a deal without him insisting on a discount...no matter what price I quoted. I got a good deal on a coin I knew he wanted. So I just tested my theory. I offered him the coin at a price any dealer in the room would pay. Of course...he counter offered. I said I gave him my best price...he wouldn't budge! I tossed the $500 dollar coin across the isle to another dealer and said...will you give me $600 for this? He bought it! That dude stopped haggling after that when I my price was in the ball park!

Greeniejr

It all depends on what the coin is, what I actually paid and how it compares to the auction pieces. There is a lot of junk in auctions so so at times the prices can be extremely low. On the other hand there are coins that two people like more too much and they overpay for. In one case a coin might be priced double the latest auction record or at times discounted from auction prices. When I am selling a coin that I bought in auction, I will price it based on my Max bid. There was a thread about that with Harry Laibstain last year where someone whined that he priced a coin way over what he paid but he showed he was willing to pay 50% more. If I am willing to pay 1000 and get it for 500, i may not push it over 1100 but I won't price it $600 just because I ripped it from the auction.

LindeDad

Is the rent paid yet?

SamByrd

25 % is quite reasonable in my view. The dealer is selling at retail and taking all the risk and the cost of overhead into account and hoping to make a profit when these factors are added in. I would assume the markup would be higher on lower priced coins though.

pennyannie

I do not know the answer but i always wonder why a coin sold at auction a month ago jumps 25 to 50 percent in price AFTER the lot views, dealers and collectors have seen in person and the auction was advertised and 99 percent of coin collectors knew it. The coin may or may not be worth what it sold for that night but to think 1/3 or more of coins bought at auction were sold as bargains escapes me.

mrpotatoheadd

<< <i>I do not know the answer but i always wonder why a coin sold at auction a month ago jumps 25 to 50 percent in price AFTER the lot views, dealers and collectors have seen in person and the auction was advertised and 99 percent of coin collectors knew it. >>

I would guess plenty of potential buyers have not actually seen the coins being auctioned. I'd guess a lot less than than 99% are even aware of any particular auction sale.

But then, that's just me.

mozin

Let's face it, some dealers set their coin prices as high as 150% of what they paid for the coin on auction. Sure, they are nice coins, but why should I pay 50% more than I was willing to pay in the auction?

mrpotatoheadd

<< <i>Sure, they are nice coins, but why should I pay 50% more than I was willing to pay in the auction? >>

Aside from the fact that the winning bidder may have been willing to bid more than what he actually paid, if you'd pay what it sold for in auction, why didn't you?

roadrunner

I recall bidding on a raw, almost gem mint state 1857 seated dollar in Stack's 2001 Vermeule sale. The coin had been dipped and had a few too many faint obv hairlines but
overall was a strong 64+ coin, but no way a solid, all there 65. It ends up going for $19.5K which was a tad higher than I wanted to pay and pretty much low end 65 money.
But certainly a very fair price for a near gem with decent eye appeal and flash. A few weeks later I get a call from a major national retailer telling me about a great coin they
just picked up, and I could have it for only $27K. You guessed it. And it was now in MS65 plastic. My only comment to that dealer was why would I pay 38% more than what
I could have bought it for only a month earlier? In my mind it was still a very high end 64+ coin or very low end 65 coin, nothing more. It already sold for a fair price at the auction.

cupronik

The coins are worth what they're worth!

ColonialCoinUnion

<< <i>My only comment to that dealer was why would I pay 38% more than what I could have bought it for only a month earlier? >>



I hear this a lot, but the answer - as has been stated here by others - is that you don't know what you could have bought it for a month earlier unless you know what the winning bidders maximum bid was.

A lot of people seem to think they could have bought a coin for either the same price as the winning bidder (which of course was not possible), or just one increment more, which might not have been possible.

BAJJERFAN

<< <i>Let's face it, some dealers set their coin prices as high as 150% of what they paid for the coin on auction. Sure, they are nice coins, but why should I pay 50% more than I was willing to pay in the auction? >>



If you were willing to pay that much you would have bid that much, eh?

BAJJERFAN

<< <i>

<< <i>Sure, they are nice coins, but why should I pay 50% more than I was willing to pay in the auction? >>

Aside from the fact that the winning bidder may have been willing to bid more than what he actually paid, if you'd pay what it sold for in auction, why didn't you? >>



Well we don't know that he did, but many bid what they're willing to pay and no more. Either you get the coin for your bid or you don't.

drfish

Thanks for all the opinions, if I ask in a polite way it seems that a 10-15% discount from advertised prices maybe reasonable. I know the dealers have to make a living and the worst they can do is say no thanks or counter offer. May try the auction route myself as there's no hurry on my end and looking for eye appealing type.

BAJJERFAN

This begs another question. When a dealer buys a coin at auction and marks it up 50% for resale, is he adding any value for the money or just cost? When would a dealer generally add value and when do they just add cost?

MikeInFL

<< <i>This begs another question. When a dealer buys a coin at auction and marks it up 50% for resale, is he adding any value for the money or just cost? When would a dealer generally add value and when do they just add cost? >>



From where I sit, the value-add in this scenario is twofold:

First, unlike an auction, the price is the price.

Second, the coin being generally sent on approval with a return privilege.

However, one needs to be careful with returning "too many" coins to dealers, because with some dealers returning "too many" coins is not acceptable and you risk damaging your relationship and/or ending your ability to buy from them. Sometimes you don't even know how many is "too many" until it is too late and the damage is done, and unfortunately I had to learn this lesson the hard way.

Live and learn....Mike

BAJJERFAN

<< <i>

<< <i>This begs another question. When a dealer buys a coin at auction and marks it up 50% for resale, is he adding any value for the money or just cost? When would a dealer generally add value and when do they just add cost? >>



From where I sit, the value-add in this scenario is twofold:

First, unlike an auction, the price is the price.

Second, the coin being generally sent on approval with a return privilege.

However, one needs to be careful with returning "too many" coins to dealers, because with some dealers returning "too many" coins is not acceptable and you risk damaging your relationship and/or ending your ability to buy from them. Sometimes you don't even know how many is "too many" until it is too late and the damage is done, and unfortunately I had to learn this lesson the hard way.

Live and learn....Mike >>



I was thinking value in terms of quality for the grade/price. I wouldn't consider approval as a value added that I would pay extra for.

MikeInFL

<< <i>

<< <i>

<< <i>This begs another question. When a dealer buys a coin at auction and marks it up 50% for resale, is he adding any value for the money or just cost? When would a dealer generally add value and when do they just add cost? >>



From where I sit, the value-add in this scenario is twofold:

First, unlike an auction, the price is the price.

Second, the coin being generally sent on approval with a return privilege.

However, one needs to be careful with returning "too many" coins to dealers, because with some dealers returning "too many" coins is not acceptable and you risk damaging your relationship and/or ending your ability to buy from them. Sometimes you don't even know how many is "too many" until it is too late and the damage is done, and unfortunately I had to learn this lesson the hard way.

Live and learn....Mike >>



I was thinking value in terms of quality for the grade/price. I wouldn't consider approval as a value added that I would pay extra for. >>



The coin is what it is, whether in an auction or from a dealer, so I don't see any value add in terms of quality for the grade/price.

That said, while you may not see the value in an approval sale, I'm not sure that most collectors would agree with you. Not all of us have the ability to view a coin in-hand before placing a bid, and there is (at least to me) clear value in having the ability to study a coin in-hand before deciding to buy it.

TomB

<< <i>

<< <i>

<< <i>This begs another question. When a dealer buys a coin at auction and marks it up 50% for resale, is he adding any value for the money or just cost? When would a dealer generally add value and when do they just add cost? >>



From where I sit, the value-add in this scenario is twofold:

First, unlike an auction, the price is the price.

Second, the coin being generally sent on approval with a return privilege.

However, one needs to be careful with returning "too many" coins to dealers, because with some dealers returning "too many" coins is not acceptable and you risk damaging your relationship and/or ending your ability to buy from them. Sometimes you don't even know how many is "too many" until it is too late and the damage is done, and unfortunately I had to learn this lesson the hard way.

Live and learn....Mike >>



I was thinking value in terms of quality for the grade/price. I wouldn't consider approval as a value added that I would pay extra for. >>



In my opinion, having a dealer send a coin to a collector on approval vs. the collector buying the coin outright in an auction is a huge value add-on provided by the dealer. By going through a dealer's inventory, and working on approval, the collector does not need to go to an auction preview or have the coin(s) shipped to them for inspection. Also, depending upon the reputation (price level, eye, integrity, etc...) of the dealer, the collector has some assurance that the coin in question already meets some type of quality standards set in place by the dealer and this assurance is missing when going as an independent in an auction environment. Additionally, the collector may have a ready buyer in the form of the dealer when and if the collector decides to sell the coin by having the dealer offer the options of consignment, trade or outright purchase. Lastly, dealers generally have access to more coins than collectors and if a dealer knows a collector is serious about an issue, series or niche and also knows the collector's preferences then the dealer can act on those opportunities to obtain pieces for the collector when in reality the collector would have never otherwise had the chance to buy the pieces in question. Perhaps most importantly, a dealer can steer a client away from a bad coin and purchasing a bad coin is much more likely to happen when a collector goes into the auction environment without professional counsel.

I provide the ability to examine coins on approval to my clients and also provide other services to them that are worth quite a bit.

RYK

Here's a real live, real time scenario.

In a recent auction, I had my dealer friend give me lot descriptions for a number of coins. I ended up bidding on and winning three for the standard dealer auction mark up. He liked a fourth very much, and I was considering bidding on it, but I had these other interests, the lot in question was near the end of the sale, and I ended up not bidding on it.

Well, he won the coin for a price that was less than I was willing to bid, and I am considering making him an offer on the coin that is about 20% more than he paid, as I think it would be a win-win.

Auction prices realized are a very valuable resource, but they are only one piece of information, and I often see this information misused, misrepresented, and misinterpreted.

crypto79

I ask for a dealers best price and either taake it or leave it. If were're close and I really want it I might counter with a ''that's still a little rich for me, can you do XXX''.

BAJJERFAN

<< <i>

<< <i>

<< <i>

<< <i>This begs another question. When a dealer buys a coin at auction and marks it up 50% for resale, is he adding any value for the money or just cost? When would a dealer generally add value and when do they just add cost? >>



From where I sit, the value-add in this scenario is twofold:

First, unlike an auction, the price is the price.

Second, the coin being generally sent on approval with a return privilege.

However, one needs to be careful with returning "too many" coins to dealers, because with some dealers returning "too many" coins is not acceptable and you risk damaging your relationship and/or ending your ability to buy from them. Sometimes you don't even know how many is "too many" until it is too late and the damage is done, and unfortunately I had to learn this lesson the hard way.

Live and learn....Mike >>



I was thinking value in terms of quality for the grade/price. I wouldn't consider approval as a value added that I would pay extra for. >>



In my opinion, having a dealer send a coin to a collector on approval vs. the collector buying the coin outright in an auction is a huge value add-on provided by the dealer. By going through a dealer's inventory, and working on approval, the collector does not need to go to an auction preview or have the coin(s) shipped to them for inspection. Also, depending upon the reputation (price level, eye, integrity, etc...) of the dealer, the collector has some assurance that the coin in question already meets some type of quality standards set in place by the dealer and this assurance is missing when going as an independent in an auction environment. Additionally, the collector may have a ready buyer in the form of the dealer when and if the collector decides to sell the coin by having the dealer offer the options of consignment, trade or outright purchase. Lastly, dealers generally have access to more coins than collectors and if a dealer knows a collector is serious about an issue, series or niche and also knows the collector's preferences then the dealer can act on those opportunities to obtain pieces for the collector when in reality the collector would have never otherwise had the chance to buy the pieces in question. Perhaps most importantly, a dealer can steer a client away from a bad coin and purchasing a bad coin is much more likely to happen when a collector goes into the auction environment without professional counsel.

I provide the ability to examine coins on approval to my clients and also provide other services to them that are worth quite a bit. >>



I agree, but I think you misunderstood me. Some dealers are plastic sellers and some are coin sellers. If a dealer wants $10K for a coin and sends it on approval it doesn't mean I would pay more than $10k just because I've seen it. I wouldn't pay a car dealer more than he is asking just because he let me drive it first. I assume a dealer's expertise is already figured into his asking price. When a coin is marked up one doesn't necessarily know all of the factors that went into determining the final price.