From the ANA Show...Resolution to Earlier Story

RichR

Not including names...to protest the guilty...

So 2 years ago, at the Philly Wjhitman Show...I see a PL64 Morgan marked $600...the actual list price is more like $475...so I ask for a cash price...and I'm told $600.

OK...? So I remark that it's a bit above list...so do they have any room to negotiate?

No...$600.

So I say thanks and walk away.

And for the past 2 years, this same exact coin is listed and relisted and relisted weekly on eBay for $600...with no takers and no Make Offer options.

So last week at the ANA...there's the dealer and the coin...and I ask for a price...and you guessed it...$600. No negotiating.

So I ask this question...why would a dealer want to sit on a mid-level coin for more than 2 years...rather than even attempt to cut his losses and clear the inventory?

blu62vette

What year and grade is the coin?

I do not get the stale inventory but also know dealers who will never sell at a loss.

SaorAlba

It must be his sacred cow coin. Even if you pulled out six bens he might still not sell.

RichR

<<What year and grade is the coin?>>

I'd rather not say...as it's on eBay right now...so the cat would be out of the bag.

But really, 2 YEARS?!? And his Buy It Now Price hasn't changed by a cent in all that time.

BAJJERFAN

<< <i>Not including names...to protest the guilty...

So 2 years ago, at the Philly Wjhitman Show...I see a PL64 Morgan marked $600...the actual list price is more like $475...so I ask for a cash price...and I'm told $600.

OK...? So I remark that it's a bit above list...so do they have any room to negotiate?

No...$600.

So I say thanks and walk away.

And for the past 2 years, this same exact coin is listed and relisted and relisted weekly on eBay for $600...with no takers and no Make Offer options.

So last week at the ANA...there's the dealer and the coin...and I ask for a price...and you guessed it...$600. No negotiating.

So I ask this question...why would a dealer want to sit on a mid-level coin for more than 2 years...rather than even attempt to cut his losses and clear the inventory? >>



How much do you think he has in it just from listing fees? The thing is that whoever buys it will likely be somewhat buried in it until the end of time.

oreville

Rich,

sounds like an emotional investment in this coin as well as financial.

Is he like this with his other inventory?

PerryHall

Sounds like he is buried in this coin and doesn't want to sell it for a loss. Many coin dealers are not the smartest businessmen.

Halfhunter06

In March 2007 at my first Baltimore show I see a 1982 No MM Dime in a dealers case, and he wanted 975 for it. It has been in his inventory ever since!!!! Every Baltimore I go back and when I see it I just chuckle. I do not get it, its been 5 years!!!!

guitarwes

Some people/dealers are hades bent on not losing a dime, ever, no matter what. That's just the way they are wired.

If they're in a position to be able to afford holding it until someone comes along with they're asking price, they will.

UNCOnly

<< <i>Not including names...to protest the guilty...

So 2 years ago, at the Philly Wjhitman Show...I see a PL64 Morgan marked $600...the actual list price is more like $475...so I ask for a cash price...and I'm told $600.

OK...? So I remark that it's a bit above list...so do they have any room to negotiate?

No...$600.

So I say thanks and walk away.

And for the past 2 years, this same exact coin is listed and relisted and relisted weekly on eBay for $600...with no takers and no Make Offer options.

So last week at the ANA...there's the dealer and the coin...and I ask for a price...and you guessed it...$600. No negotiating.

So I ask this question...why would a dealer want to sit on a mid-level coin for more than 2 years...rather than even attempt to cut his losses and clear the inventory? >>



Sounds to me like he over-paid for this coin and wants to get out with a profit, if he can. However, at some point, reality must sink in and the dealer realize that he should at least attempt to break even on this coin.

I've seen this happen quite a bit since the economy tanked, and the collecting community was not buying as much as prior to the recession. Dealers had money tied up in high end coins, only to not be able to sell them as quickly as they had hoped to, and many are still stuck even to this day.

earlyrarecoins

This is because the dealer has the mentality of a child between 8 and 12 years old. It is likely that his ability to manage his business is due entirely to luck.

Let's assume that a dealer's annual return on capital is 15%.


If he had sold the coin for $500 immediately, after the first year he would have made $75 in profit.
After the second year, he would have made $86.25 in profit.

After 2 years, he would have $661.25.


Of course this is a simplified calculation, but this is the method in which you must analyze the problem.

This dealer has the mindset of a barbarian.

greghansen

Without seeing the coin its hard to make much meaningful comment. If the coin is much nicer than average; and the average coin sells for less, I can understand his hesitation to reduce price. Perhaps he would rather 'own it' rather than sell it for less than what he thinks he can get for it. Or, perhaps as others have speculated, he may just be upside down. Either way, his cash flow must not be hurting him, otherwise self preservation would cause him to act in his own self interest. Finally, if the coin really is overpriced and unlikely to sell at its current ask, I don't understand what harm could be caused by disclosing its EBAY specifics.

renomedphys

I have seen this before as well. It was explained to me by another dealer who said that the values and his prices would eventually meet up, and that's what the dealer is banking on. Averaged out over an entire inventory, I guess it works out as the dealer has been in business for decades.

What's interesting is that he tends to price his inventory and let it sit until sold, which makes for some interesting deals when certain issues spike. Not a huge moneymaker, but in 2008 when 65RD 1909 VDBs were selling for $200 each, I bought three from him at $85 each and turned a quick eBay profit.

PerryHall

<< <i>Some people/dealers are hades bent on not losing a dime, ever, no matter what. That's just the way they are wired. >>



Holding dead inventory for several years is losing money and is a bad business practice.

HighRelief

It could be that the dealer thinks he has a better than average 64 Prooflike Morgan and wants a premium for it. Does the coin in question have anything going for it that is above the norm for a 64 PL? I will pay more for PL and DMPL Morgan's that are exceptional for the grade, no questions asked.

What is the year and mint for this coin?

CoinRaritiesOnline

<< <i>From the ANA Show...Strange Dealer Story >>



Frankly this is not that strange a dealer story - lots of guys have a similarly long-term hold mentality. Not that I think it is a good idea, but they did not ask my opinion.

RichieURich

There are certain dealers who do this all the time. Even other dealers complain about this practice.

If I own a coin and it hasn't moved in a long time, then I have lost money on it. Usually I lost money when I bought the coin, not when I sold it.

I would rather sell it at a loss, take the money and buy something else, rather than have it sit as stale inventory, and as a constant reminder of how stupid I was when I bought it.

LindeDad

BTW for those worried about the cost of listing it on eBay for two years it's only $4.80 if the dealer has a eBay store.
So I dough if holding it is going the force him into early retirement.

telephoto1

Maybe it's a consigned piece from a stubborn consignor who bought it cheap long ago and won't sell until he gets $600.

Coinosaurus

Offer him $550, get declined, and then every show remind him that you offered $550 and that the offer is no longer good.

After all, how can we improve dealer behavior if we don't keep pointing out their mistakes

WTCG

Some people are like that: even if they over paid for a coin they can't stomach ever selling anything at a loss even if it means holding on to that coin for a long time. How stubborn are some? I've seen coins that have been in the same dealer's inventory for over a decade because they paid too much a decade ago but still can't come to terms with selling at the current value.

BAJJERFAN

I guess their only saving grace is that they don't have to sell. I have a lot of stuff in my collection that isn't showing a profit, unless I could sell to another collector.

johnny9434

i cant blame dealer for not wanting to take a loss on the coin ( by the sounds of it ) jmo

tradedollarnut

In a rising market, it can be a wise business strategy to set a price and not negotiate. Rising inventory values create the profit - and the coin eventually sells for the cash profit. I can't count the number of times I've seen a dealer flip a coin for a 'profit' and then have to pay MORE than the sales price a few months later for comparable replacement inventory.

Seems some here don't understand business principles to the extent they think they do.

Timbuk3

I've noticed over the years that this happens. I wished dealers
would cut their losses, use the funds for another purchase and
move on. JMHO !!!

SmallTownCoins

Just a thought...
If I have a proxy bid on an auction coin for $600. and the auction win's me the coin at $450.
Should I then be selling the coin for $500...??
(I was willing to pay $600 and got lucky at $450)....
HHmmmmm

PerryHall

<< <i>In a rising market, it can be a wise business strategy to set a price and not negotiate. Rising inventory values create the profit - and the coin eventually sells for the cash profit. I can't count the number of times I've seen a dealer flip a coin for a 'profit' and then have to pay MORE than the sales price a few months later for comparable replacement inventory.

Seems some here don't understand business principles to the extent they think they do. >>



True but we are not currently in a rising market.

DrPete

I've seen dealers behave the same way as the OP's description. I think some of the time these guys are just going to shows as a social event and merely put coins out for display and don't care whether they sell or not. If the prices are strong, and someone actually buys the coin, they get what they were asking (presumably at a good profit), but it sure seems a strange way to conduct business to me. I have seen it more often at smaller local shows. Typically these guys have little overhead and don't seem to care whether they sell anything or not. I've learned to take a quick peak at their dusty inventory and move on. Maybe they buy more than they sell, but my observations is that they don't do much of anything.

Bochiman

<< <i>Just a thought...
If I have a proxy bid on an auction coin for $600. and the auction win's me the coin at $450.
Should I then be selling the coin for $500...??
(I was willing to pay $600 and got lucky at $450)....
HHmmmmm >>



I don't think that is the issue here. In the short term, in your example, then you price it as you want it and $600 is possibly reasonable.
In the OP's example, real life, there are 2 years that the coin has been in the same hands (of a dealer, not a collector), and offered for sale...at $600.

So, while the dealer is within rights to ask whatever they want, one does have to wonder when the dealer sits on a coin for that exact same amount the entire time, and it isn't moving at the price and the dealer appears inflexible in the pricing.
That would make it seem to NOT be you example.



Question.....why do folks always want to try to alter threads to fit their own way of thinking? Make a separate thread, no problem. But, why not take the premise of the thread and comment on that, within the confines given, or else not comment?

Now, that all said, there are still pieces missing from the OP's post before I would make a complete assumption about the dealer.....
* Is the dealer also a collector? Maybe he is fine owning the piece up to that $600 price as that is the price he feels he is willing to sell at and doesn't consider it just a widget to be gone at any price point
* Does this dealer have the same type of policy on all coins he sells? Are other coins sitting for 2 years+ at unrealistic pricing? The dealer has expenses, so if he isn't making money, he is either wealthy in other ways and just enjoying himself (and maybe just buying cool coins he wants as a dealer to get lower prices and more offered to him), or he is going broke. Something tells me he is making money somewhere and is supporting his decisions and business that way
* Anything special about the coin, other than being a PL64 Morgan? Toning? Few in the pop for that date/MM?
* Does he feel it is upgradeworthy and just doesn't want to get "ripped" on it? What's the price/value in the next grade up? Huge?

There are always reasons, but I am just a collector, and not a dealer, so I don't always have the insight into a dealer's mind

ColonelJessup

<< <i>

<< <i>From the ANA Show...Strange Dealer Story >>



Frankly this is not that strange a dealer story - lots of guys have a similarly long-term hold mentality. Not that I think it is a good idea, but they did not ask my opinion. >>



Doesn't a variation on this thread show up at least once a month?

CEOcoinshopcom

I've seen this before.... as a matter of fact, it's quite common.

If you could have a true inventory of a lot of dealers, and checked back with them once a year, you will find two types of dealers.

First dealer, lots of change in the inventory.
Second dealer, lots of the same inventory. Lots of reasons, bad business, "in love" with their coins, poor salesmanship, bad purchases, lack of business education, and many other reasons.

I've been to lots of shows, and lots of dealers, and have seen the same coins many times.

Kove

<< <i>

There are always reasons, but I am just a collector, and not a dealer, so I don't always have the insight into a dealer's mind >>



Probably the wisest words on the thread...

Before I went into this business, I was certain I knew how coin dealing should work. After doing it for several years, I now realize that while every dealer needs to get to their profit target, every dealer/business does it slightly differently. Whether they are high margin/low volume, low margin/high volume, bottom feeders vs. top-of-the-foodchain, mass marketers, crack-out artists, rips, box-walkers, wholesale vs. retail, set-builders, constant travellers, or whatever, every business puts together some combination of these methods to stay in business.

I'm not sure how the dealer in the OP puts together his path to profit, but I am sure that, unless he's a coin doctor or the most beligerent SOB on the bourse floor, I can't question how he runs his business.

LindeDad

<< <i>

<< <i>

<< <i>From the ANA Show...Strange Dealer Story >>



Frankly this is not that strange a dealer story - lots of guys have a similarly long-term hold mentality. Not that I think it is a good idea, but they did not ask my opinion. >>



Doesn't a variation on this thread show up at least once a month? >>



About right whenever someone thinks they should be able to get top end coins at dirty laundry prices.

yellowkid

It may be a consignment piece the seller won't move on, or the dealer wants to be buried with it.

littlebear

In a rising market, it can be a wise business strategy to set a price and not negotiate. Rising inventory values create the profit - and the coin eventually sells for the cash profit. I can't count the number of times I've seen a dealer flip a coin for a 'profit' and then have to pay MORE than the sales price a few months later for comparable replacement inventory.

Seems some here don't understand business principles to the extent they think they do.

Absolutely true. When I used to set up at shows, I once did this for the same exact coin.






<< <i>

<< <i>Doesn't a variation on this thread show up at least once a month? >>



About right whenever someone thinks they should be able to get top end coins at dirty laundry prices.

>>



Interesting point. There seems to be a bit of resentment that the dealer won't sell the coin at a reduced price. But, you know what? That is the dealer's perogative. And if the dealer is "in love" with the coin, or whatever, so what? I would like to see the expert critics set up at coin shows. Some of the criticisms that are thrown out there would take on a whole new meaning.


Larry L.

RichR

As I've rarely been asked so many times for the specific coin in question...it's a 1903P 64PL (NGC)...currently being offered for $600+

In my book...that's a bit much.

In a fit of over-exuberance, I think I was willing to go as high was $450...two years ago.

Wabbit2313

He seems to think that it has a shot at DMPL. I know from recent personal experience, that would not even make it into PL, and it also would most likely miss the 64. Putting the true value at $111.00 (Only if you like paying full retail!)



EBay Coin

Bochiman

<< <i>He seems to think that it has a shot at DMPL. I know from recent personal experience, that would not even make it into PL, and it also would most likely miss the 64. Putting the true value at $111.00 (Only if you like paying full retail!)



EBay Coin >>



Looking at the pictures, I hope it is better in-hand. not a coin I would go for.

RevDrBlimber

What an outrage! It's undemocratic to demand $600 for a coin worth at most $350! On the other hand maybe he has a sentimental attachment to the Morgan, he got it after his pet turtle or guppy died and he felt a warm glow and had to hold it at the $600.

Wabbit2313

<< <i>Just a thought...
If I have a proxy bid on an auction coin for $600. and the auction win's me the coin at $450.
Should I then be selling the coin for $500...??
(I was willing to pay $600 and got lucky at $450)....
HHmmmmm >>




If you buy it on Proxibid for $450.00, it is really $540.00 with the 20% fee. Add the shipping and insurance, now $555.00. Time to resell it on EBay, at another 11% with PayPal fees, now $615.00. If you offer free shipping and insure it, now $625.00.

Did you really get a good deal at $450.00?? If you aim to resell it, you really paid $625.00.

Now if you sold it for $550.00, you would probably tell your Wife and buddies that you just made a C-Note, while losing 75 bones!!

pennyannie

I put my stuff in 3 catagories, things i want to sell now, things i would not mind selling and the last group is things that do not bother me one way or the other wether it sells or not.

I set up at a gun show a few months back and had (2) M1 carbines tied together with a crank system on a tri pod. I really just had it and a 50 cal on the table to draw intrest in what i really intended to sale. I had a lot of intrest in the M1's so i put a crazy high price on it. I mean stupid price. Sold it in no time and i had zero desire to sale it.

Pretty much everything i buy is or could be for sale. As long as i make my numbers i do not mind if i carry inventory for a long time.

MrEureka

This is because the dealer has the mentality of a child between 8 and 12 years old. It is likely that his ability to manage his business is due entirely to luck.

Let's assume that a dealer's annual return on capital is 15%.


If he had sold the coin for $500 immediately, after the first year he would have made $75 in profit.
After the second year, he would have made $86.25 in profit.

After 2 years, he would have $661.25.


Of course this is a simplified calculation, but this is the method in which you must analyze the problem.

This dealer has the mindset of a barbarian.


Your 20/20 hindsight does not make the dealer a barbarian. In other words, if he knew that the coin was going to sit around for two years, he might have set a lower initial price, and/or he might have lowered the price somewhere along the way.

DeepCoin

Every dealer has a different perspective. I would be working on inventory turns and margin. A coin sitting for a number of years is costing money in terms of your money not working for you. It is dead money so to speak. Now I have perspective based upon teaching Entrepreneurism at the University of Connecticut for a few years. My course was a primer on how to start and run a small business.

Not everyone uses this perspective, often to their own financial detriment. That said, everyone has their own right to buy and sell as they please.

littlebear

<< <i>That said, everyone has their own right to buy and sell as they please. >>



That sums up everything in this thread in one simple sentence.


Larry L.

ArizonaJack

I have seen gun and guitar dealers both do this, with nothing special or scarce or rare. Gun market is solid as a rock so I kind of understand but guitars hit bottom and many are still priced pre crash.

SeattleSlammer

<< <i>

<< <i>

There are always reasons, but I am just a collector, and not a dealer, so I don't always have the insight into a dealer's mind >>



Probably the wisest words on the thread...

Before I went into this business, I was certain I knew how coin dealing should work. After doing it for several years, I now realize that while every dealer needs to get to their profit target, every dealer/business does it slightly differently. Whether they are high margin/low volume, low margin/high volume, bottom feeders vs. top-of-the-foodchain, mass marketers, crack-out artists, rips, box-walkers, wholesale vs. retail, set-builders, constant travellers, or whatever, every business puts together some combination of these methods to stay in business.

I'm not sure how the dealer in the OP puts together his path to profit, but I am sure that, unless he's a coin doctor or the most beligerent SOB on the bourse floor, I can't question how he runs his business. >>

ScarsdaleCoin

hmmm could be you are all missing the boat.... if you keep asking him about 1 coin I see two possibles...

1. He remembers you and will just not let you get it for less since you ticked him off.

2. He does not remember you but remembers that people keep asking for a price so the coin is not dead, its getting action but no one pulled the trigger yet.

You have to understand in many dealers minds coins dont eat so they dont care if they sell it or not....Im not saying I agree, because I like to move coins and make a fast nickel over a slow dollar but other dealers will sit for years with coins...

halfcentman

With regards to Halfhunter06's post, I see that same coin as well (it was there at the ANA last week).

mrpotatoheadd

Number of posts I've read here by collectors who complain when a dealer won't reduce the price of a coin he's had for sale for a couple of years: More than I can remember.

Number of posts I've read here by dealers who complain when collectors won't pay the listed price of a coin he's had for sale for a couple of years: I don't remember any.

Maybe there's a lesson here. Maybe not.

camlov2

Don't forget that $6oo today is cheaper then $600 a few years ago. A price of $600 in a few years will be even cheaper still. If we wait long enough that $600 price will be a good deal on that coin (or any coin).

RichR

Just to add an element to the discussion...that coin also had a "Make An Offer" option...until about 6 months ago when it became a strictly "Buy It Now".

So the seller must not have liked getting what he considered lowball offers...even if they were actually fair...or maybe even more than fair.