Do coins routinely trade among dealers for substantially less than "Auction" Prices?

C0inCollect0r

Hi folks,

I apologize if this is a foolish or ignorant question - I am just quite confused about the presence (or absence) or a true "wholesale" market in the world of higher end coins (say $500 in value and higher). Most of the dealers I have spoken with seem to buy coins from eachother at prices quite close to the "prevailing auction prices." Of course there is a significant degree of variability here depending on the exact coin, high end versus low end for the grade, etc. but in general the prices don't seem significantly discounted from typical auction house prices. I also had the opportunity to see Heritage's "Wholesale Inventory" price list that they send out to dealers - most of the prices actually seemed to exceed the "going rate" for the coins at their own auction house.

Anyhow, I am curious to hear anyone's thoughts on this general subject.

Moldnut

I have a hard time saying a Heritage auction is "wholesale" when everyone and their mom is bidding there. Sounds like retail to me. Im sure there are some coins that slip through the cracks at a Heritage auction, but not many IMO.

RichieURich

As has been said many times, not all coins of the same date and mint and grade are worth the same money. It isn't uncommon for a coin to be valued at double or triple another of the "same" coin.

Dealers often end up with too many coins, so their options are to have a sale, consign some coins to auction, or sell some coins to other dealers. Each of these methods has its pluses and minuses, but selling to other dealers has the advantage of selling a lot of coins quickly, and getting paid quickly. I've bought groups of 20 or more coins from other dealers in a few minutes. This result is very unlikely when selling coins at retail.

As for auction prices, in every big-time auction, some coins go for "moon money", and some go inexpensively, but most go for about what they're worth. If you are a dealer and have a list of, say 50 coins you are interested in, one strategy would be to pass on the coins that go for "moon money", and buy from the other two categories. A collector who targets one or two coins at an auction doesn't have that flexibility.

RedTiger

The answer is yes, many dealers acquire inventory for far less than typical Heritage hammer prices. If you have been around the forum, surely you have read many posts about various would-be buyers that offer very low, maybe as low as 10% or 20% of retail price. Some dealers do buy off Heritage for inventory, but usually also have other sources, and tend to be selective in what coins they might bid on. High end quality oriented dealers may pay higher than auction prices for some inventory because the quality tends to be higher. Also keep in mind that dealers do not reveal all their cards and may say things that only have elements of truth. Don't believe everything you hear. Don't repeat every you hear either, otherwise, you won't hear as much next go round.

As always, a single coin can trade for a very wide range of prices. From a low wholesale price in a bulk deal, to full price retail at a high end dealer, the difference might be 400% on a collector coin. If a person or firm, buys in bulk they typically get better prices than a person buying in small volume. For coins, it is not so easy as ordering widgets from a factory. Finding coins to buy that can be resold at a profit is one of the most difficult tasks for any would-be coin dealer.