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Does cost really matter in re-sale ?

SmallTownCoinsSmallTownCoins Posts: 688 ✭✭
in U.S. Coin Forum
Does cost really matter ?
There is an auction for a 1916 standing liberty quarter in vg08 with no minimum bid.
I (a full time coin dealer) enter a proxy bid of $5,500.00 because I really like the coin,
and I think I can re-sell it for close to $6,000...
I end up getting the coin at $4,500.
Now it is for sale here at the store for $5,900.00
Customer comes in and offers me $4,750. telling me, Thats a great offer
because he knows what I paid for it...
He knows full well that I like to make 5% to 10% on nice coins...
Now, If I were willing to pay $5,500 for it, does it really matter what my cost was ?
The above story is total fiction, just curious of the question...
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Comments

  • commoncents05commoncents05 Posts: 10,096 ✭✭✭
    No, it doesn't matter to me if you paid $1,000,000 or found it on the sidewalk.

    -Paul
    Many Quality coins for sale at http://www.CommonCentsRareCoins.com
  • FlatwoodsFlatwoods Posts: 4,246 ✭✭✭✭✭
    It shouldn't but it will to some.
  • WhiteTornadoWhiteTornado Posts: 2,102 ✭✭✭


    << <i>It shouldn't but it will to some. >>



    image
  • stevebensteveben Posts: 4,634 ✭✭✭✭✭
    in a business, cost always matters.

    in your scenario...it's simply a negotiation tactic.
  • SenexSenex Posts: 483 ✭


    << <i>Does cost really matter ?
    There is an auction for a 1916 standing liberty quarter in vg08 with no minimum bid.
    I (a full time coin dealer) enter a proxy bid of $5,500.00 because I really like the coin,
    and I think I can re-sell it for close to $6,000...
    I end up getting the coin at $4,500.
    Now it is for sale here at the store for $5,900.00
    Customer comes in and offers me $4,750. telling me, Thats a great offer
    because he knows what I paid for it...
    He knows full well that I like to make 5% to 10% on nice coins...
    Now, If I were willing to pay $5,500 for it, does it really matter what my cost was ?
    The above story is total fiction, just curious of the question... >>


    Funny that a complaint I hear from some dealers is that they must get X (ridiculously high price) because they have Y in it.
    I'm not suggesting you don't have the right to make a profit.
    I'd dicker with him to see if I could get more.
    BTW 10% profit would be $450 - $4950 for the coin.
    The coin is making 0% sitting in your display cabinet.
    Just my 2¢
  • LanceNewmanOCCLanceNewmanOCC Posts: 19,999 ✭✭✭✭✭


    << <i>No, it doesn't matter to me if you paid $1,000,000 or found it on the sidewalk.
    -Paul >>


    i concur 100%. only price that matters to me is "how much do I pay"

    but to try and better answer the inquiry and this is my answer. just like virtually everything else, answers are multi-faceted.

    "sometimes cost matters and sometimes it doesn't" depends on the rationale, reason and choice
    .

    <--- look what's behind the mask! - cool link 1/NO ~ 2/NNP ~ 3/NNC ~ 4/CF ~ 5/PG ~ 6/Cert ~ 7/NGC 7a/NGC pop~ 8/NGCF ~ 9/HA archives ~ 10/PM ~ 11/NM ~ 12/ANACS cert ~ 13/ANACS pop - report fakes 1/ACEF ~ report fakes/thefts 1/NCIS - Numi-Classes SS ~ Bass ~ Transcribed Docs NNP - clashed coins - error training - V V mm styles -

  • nagsnags Posts: 821 ✭✭✭✭
    What you have in something doesn't define its value so it shouldn't matter one bit in that regard. It certainly matters as a tax consequence and whether you are able to keep the doors open.
  • derrybderryb Posts: 37,610 ✭✭✭✭✭
    cost, for a business, includes the many facets of overhead from rent to health insurance.

    No Way Out: Stimulus and Money Printing Are the Only Path Left

  • mrpotatoheaddmrpotatoheadd Posts: 7,576 ✭✭✭


    << <i>Customer comes in and offers me $4,750. telling me, Thats a great offer
    because he knows what I paid for it... >>

    Offer him 5% over what he paid 20 years ago for a nice coin in his collection instead of basing the price on the current market and you'll see how much he really believes in his concept of a "great offer". image
  • mozinmozin Posts: 8,755 ✭✭✭
    Dealers need to price their stock at numbers they believe are true value at the time of sale. Cost should not matter.
    I collect Capped Bust series by variety in PCGS AU/MS grades.
  • s4nys4ny Posts: 1,573 ✭✭✭
    Cost should not matter, but it does. It is human nature to want a quick profit, like 5% on the SLQ.

    It also becomes a factor when the owner has a loss, the owner wants to get even.
  • CoinZipCoinZip Posts: 3,253 ✭✭✭
    If your happy making 200 bucks on the coin sell it.


    If your not happy making 200 bucks on the coin don't sell it.


    Cost does not matter to me.

    Coin Club Benefit auctions ..... View the Lots

  • BillJonesBillJones Posts: 34,757 ✭✭✭✭✭
    The cost only matters to the tax man and your ego. No one likes to lose money on a coin, especially a dealer. As a dealer if you lose money enough times you are out of business. It also is an indicator that you messed up, which is not an easy thing to accept for many people.

    From the economic theory perspective, price is determined by supply and demand. A past or historic price paid as nothing to do with the present value of an item.
    Retired dealer and avid collector of U.S. type coins, 19th century presidential campaign medalets and selected medals. In recent years I have been working on a set of British coins - at least one coin from each king or queen who issued pieces that are collectible. I am also collecting at least one coin for each Roman emperor from Julius Caesar to ... ?
  • rickoricko Posts: 98,724 ✭✭✭✭✭
    Cost matters to both buyer and seller, but in different ways. That being said, the seller is entitled to price his/her coin at any level he/she feels is justified. The buyer has the choice of buying, negotiating or walking away. Simple business....Life is not complex, it is the living that try to make it so. Cheers, RickO
  • hchcoinhchcoin Posts: 4,836 ✭✭✭✭✭


    << <i>

    << <i>Customer comes in and offers me $4,750. telling me, Thats a great offer
    because he knows what I paid for it... >>

    Offer him 5% over what he paid 20 years ago for a nice coin in his collection instead of basing the price on the current market and you'll see how much he really believes in his concept of a "great offer". image >>



    That is a great post!
  • yellowkidyellowkid Posts: 5,486 ✭
    In a word, no.
  • 2ltdjorn2ltdjorn Posts: 2,329 ✭✭✭✭
    Post a pic of the coin on the BST, I bet you get closer to your ask price! Sometimes in numismatics if you snooze you lose... as a buyer and as a seller... this might be an important teaching point for your customer!
    WTB... errors, New Orleans gold, and circulated 20th key date coins!
  • RichieURichRichieURich Posts: 8,552 ✭✭✭✭✭
    So if you had paid $5,500 for the coin, would the customer then pay $5,750 for it?

    If so, your customer is inconsistent. If the coin is really worth $5,750 to him, why is he unwilling to pay more than $4,750 for it?

    And, if you had overpaid and paid $6,500 for the coin, would your customer be anxious to pay $6,750 for it?

    I think not.

    If your customer found this coin on the ground, would he be willing to take your offer of $250 for it, on the basis that you know what it cost him, and a $250 profit is "acceptable"?

    I would say definitely not.

    If you are running a retail shop, you have a lot of expenses. If you are a dealer and don't have a shop, you probably still have significant expenses. The fact that you bought a coin for less than you were willing to pay is a good thing for you. And if you wish to share part of this success with your customer, that is your prerogative. I do that sometimes too. But giving the customer the entire amount of the savings strikes me as giving away too much. Just my opinion.

    An authorized PCGS dealer, and a contributor to the Red Book.

  • roadrunnerroadrunner Posts: 28,313 ✭✭✭✭✭
    Don't tell TDN that historical prices on great rarities have no bearing on today's prices.
    Barbarous Relic No More, LSCC -GoldSeek--shadow stats--SafeHaven--321gold
  • savoyspecialsavoyspecial Posts: 7,309 ✭✭✭✭
    Senex: The coin is making 0% sitting in your display cabinet


    Me, as shopkeeper: "That's okay it doesnt eat much and it takes up very little space"


    www.brunkauctions.com

  • jacktheknifejacktheknife Posts: 1,547 ✭



    Well, here is another viewpoint. Cost does matter only in the sense that it establishes value. By purchasing the coin at a public auction, a benchmark value has been established. Since the coin was only able to garner $4500 at auction, which is now known by all, making the case that it is now worth $6000 is more difficult to make.

    Just a different take.

    Jack


  • SenexSenex Posts: 483 ✭


    << <i>Senex: The coin is making 0% sitting in your display cabinet


    Me, as shopkeeper: "That's okay it doesnt eat much and it takes up very little space" >>


    And when enough coins are taking up space instead of being sold you'll be out of business! image
  • savoyspecialsavoyspecial Posts: 7,309 ✭✭✭✭
    The argument 'The coin is making 0% sitting in your display cabinet' is a most ridiculous one because any of us here could go into our local WalMart or any other store in the world and make the same case:

    'Oh my God, see that stuff on your shelves; why it's not doing you any good right at this second.....Therefore, you should sell it to me at a great discount'

    I just wanted to point out that many dealers have paid-for (non-financed) inventory and can exercise a little patience and get much closer to their price......Feel free to keep trying your technique however, as it may work on a few dealers who finance inventory.....Hit them up near the end of the month

    www.brunkauctions.com

  • SenexSenex Posts: 483 ✭


    << <i>The argument 'The coin is making 0% sitting in your display cabinet' is a most ridiculous one because any of us here could go into our local WalMart or any other store in the world and make the same case:

    'Oh my God, see that stuff on your shelves; why it's not doing you any good right at this second.....Therefore, you should sell it to me at a great discount'

    I just wanted to point out that many dealers have paid-for (non-financed) inventory and can exercise a little patience and get much closer to their price......Feel free to keep trying your technique however, as it may work on a few dealers who finance inventory.....Hit them up near the end of the month >>


    Nobody said to sell it at a "great discount".
    The OP had a $4500 coin he thinks is worth $6000 - it could be asked if it was worth $6K why didn't it fetch that at auction - at any rate he could make a quick $250 and turn around and buy more coins for resale.
    The Walmart analogy is absurd - they constantly turn over their stock - they don't buy it and hold it waiting to make a 33% profit!
  • coindeucecoindeuce Posts: 13,496 ✭✭✭✭✭
    Tell the customer that since you bought the coin at auction, you're going to give the coin the same opportunity to multiple potential buyers. Tell him to come back in 30 or 60 days, and if it is still around, you'll give his offer serious consideration. And then promote the heck out of it during your possession of it.

    "Everything is on its way to somewhere. Everything." - George Malley, Phenomenon
    http://www.american-legacy-coins.com

  • coolestcoolest Posts: 2,281 ✭✭✭
    If the best offer you could get was $3000, I bet you now would be screaming about how much you had to pay for the coin and it thus cannot ever sell for less than what I (you) paid + X%.
  • savoyspecialsavoyspecial Posts: 7,309 ✭✭✭✭
    Senex, many (non-numismatic) retail operations work a little closer to keystone mark-up....Your generous offer for the seller to make 5% would, in most cases, be turned down.....If for no other reason on principle when the reason for such a low offer is 'I know what you have in it' (If this customer were interested in the coin, AND was aware of the orginal auction, why didnt he place a strong bid?? It does beg the question)

    At any rate, mrpotatoeheadd has the best post in this thread so far....How would you react if the offer were reversed??

    www.brunkauctions.com

  • RichieURichRichieURich Posts: 8,552 ✭✭✭✭✭
    And another thought. When I get a great new coin in stock, guess which customer I WON'T call.

    An authorized PCGS dealer, and a contributor to the Red Book.

  • savoyspecialsavoyspecial Posts: 7,309 ✭✭✭✭
    oh yeah, you also state: The Walmart analogy is absurd - they constantly turn over their stock


    Who says this fictional (or maybe not fictional) shop the OP is referring to doesnt turn their stock just as quickly -- especially on key date coins like 1916 SLQs

    www.brunkauctions.com

  • savoyspecialsavoyspecial Posts: 7,309 ✭✭✭✭
    Great point Rich! While I would not say it to a customer's face, those who make lowball offers are known as 'time wasters'

    www.brunkauctions.com

  • mrpotatoheaddmrpotatoheadd Posts: 7,576 ✭✭✭


    << <i>By purchasing the coin at a public auction, a benchmark value has been established. Since the coin was only able to garner $4500 at auction, which is now known by all, making the case that it is now worth $6000 is more difficult to make. >>

    One auction does not define a benchmark. All it does is define what the highest bidder in attendance at that particular auction was willing to pay. I would suggest that there just might be buyers for the coin that would have bid higher had they had the opportunity.
  • SenexSenex Posts: 483 ✭


    << <i>...Your generous offer for the seller to make 5% would, in most cases, be turned down.... >>


    I made NO offer on the coin, so you can practice your snarky rejoinders on someone else.
  • rheddenrhedden Posts: 6,632 ✭✭✭✭✭
    Customer is a touch of a smartass to call you out on the purchase price. I can see using this tactic gingerly without mentioning to the dealer that you know how much he paid, but it's not likely to elicit a nice response if you throw his buy price back in his face.

  • ColonelJessupColonelJessup Posts: 6,442 ✭✭✭✭✭
    Heritage archives show only one (image shows an undergraded old ANACS cache) bringing over $4500 in the past several years. You bought your piece at market.

    Price histories DO matter on a generic.

    Your proposed purchase price, based on what you hoped. not knew, you could sell it for, seems unjustified. Having this easily available information before purchasing, or even after, and using it as part of your presentation would have made it easier to make a realistic deal.

    Your pain-in-the-butt customer may have walked out of your store or away from your table gritting his teeth and muttering "$5000 would have been fair. I can't believe he took a $1000 shot at meimageimageimage". You're the professional. He's assuming that you acted like one, did your homework, know the market and then, with malice aforethought, chose to jerk him around.

    Turns out he was right for the wrong reason, quoting your cost, rather than market, as his basis. If either of you had really done your homework this situation would not exist.

    Nice hypotheticalimage
    "People sleep peaceably in their beds at night only because rough men stand ready to do violence on their behalf." - Geo. Orwell
  • johnny9434johnny9434 Posts: 29,160 ✭✭✭✭✭


    << <i>It shouldn't but it will to some. >>

    image to each our own image
  • mrpotatoheaddmrpotatoheadd Posts: 7,576 ✭✭✭
    I found a few similarly graded coins listed for sale from $5650 to $5940. I'm not seeing where a retail price of $5900 is necessarily unreasonable, especially if a dealer might be offering his customer a discount.
  • SmallTownCoinsSmallTownCoins Posts: 688 ✭✭
    I guess my real question was, That IF I were willing to pay $5,500 for the coin,
    Why would I sell it for less than that ?
    I don't need to sell it, Inventory is a good thing for a brick store...
    Especially scarce key date coins, Many collectors have never even seen a 1916 SLQ...
    I just don't like customers dictating policy im MY Store...

    p.s, there are 4 similar coins in Collectors Corner ranging from 5200 to 6475..
    and the cheaper ones "have no date"... Yeah, VG08's with NO date !!! :-)


    Thanks for all the comments, very interesting reading...
    Support your local Coin Shop
    LM-ANA3242-CSNS308-MSNS226-ICTA
  • Type2Type2 Posts: 13,985 ✭✭✭✭✭
    No,You can ask the world for it but i dont think you will get it. I have seen crazer things happen. It's your coin do what you want with it even if you bought it for melt. Thats the golden rule he who has the gold makes the rule......image and if you can float the cash till the right buyer comes along to buy it that helps.


    Hoard the keys.
  • 2ltdjorn2ltdjorn Posts: 2,329 ✭✭✭✭


    << <i>I guess my real question was, That IF I were willing to pay $5,500 for the coin,
    Why would I sell it for less than that ?
    I don't need to sell it, Inventory is a good thing for a brick store...
    Especially scarce key date coins, Many collectors have never even seen a 1916 SLQ...
    I just don't like customers dictating policy im MY Store...

    p.s, there are 4 similar coins in Collectors Corner ranging from 5200 to 6475..
    and the cheaper ones "have no date"... Yeah, VG08's with NO date !!! :-)


    Thanks for all the comments, very interesting reading... >>



    And they are still for sale!

    Post a pic of the coin in question... I imagine everyone is curious.
    WTB... errors, New Orleans gold, and circulated 20th key date coins!
  • SmallTownCoinsSmallTownCoins Posts: 688 ✭✭

    "The above story is total fiction, just curious of the question... "

    SERIOUS !!

    A Similar occurance promped the question....
    Support your local Coin Shop
    LM-ANA3242-CSNS308-MSNS226-ICTA
  • Bayard1908Bayard1908 Posts: 4,091 ✭✭✭✭


    << <i>Don't tell TDN that historical prices on great rarities have no bearing on today's prices. >>



    I keep wondering when the music will stop on the ultra rarities game of musical chairs.
  • ColonelJessupColonelJessup Posts: 6,442 ✭✭✭✭✭


    << <i>I guess my real question was, That IF I were willing to pay $5,500 for the coin,
    Why would I sell it for less than that ?
    I don't need to sell it, Inventory is a good thing for a brick store...
    Especially scarce key date coins, Many collectors have never even seen a 1916 SLQ...
    I just don't like customers dictating policy im MY Store...

    p.s, there are 4 similar coins in Collectors Corner ranging from 5200 to 6475..
    and the cheaper ones "have no date"... Yeah, VG08's with NO date !!! :-)


    Thanks for all the comments, very interesting reading... >>



    If I understand correctly, making a counter-offer in YOUR store is "dictatiing policy". image With that attitude you wonder why your customer had one too?

    All your price justifications are after the fact. You didn't do your homework before or even after the purchase. So you blew your sales pitch. Got a lot of customers for $5000 coins?

    Change your hypothetical to a $5500 purchase price. Ask your question again.

    image
    "People sleep peaceably in their beds at night only because rough men stand ready to do violence on their behalf." - Geo. Orwell
  • SmallTownCoinsSmallTownCoins Posts: 688 ✭✭
    You can critique my business decisions all you want to,
    I have done very well for over 30 years now,
    But your not getting the question...

    If you we're willing to pay 5500 for a coin based on what you thought you cold resell it for,
    Would you sell it for less that what you were willing to pay..
    The question isn't all that difficult...

    I'm not arguing with anyone, I'm asking a simple question....
    Support your local Coin Shop
    LM-ANA3242-CSNS308-MSNS226-ICTA
  • BAJJERFANBAJJERFAN Posts: 31,255 ✭✭✭✭✭


    << <i>You can critique my business decisions all you want to,
    I have done very well for over 30 years now,
    But your not getting the question...

    If you we're willing to pay 5500 for a coin based on what you thought you cold resell it for,
    Would you sell it for less that what you were willing to pay..
    The question isn't all that difficult...

    I'm not arguing with anyone, I'm asking a simple question.... >>



    Had you paid $5500 and been fortunate enough to resell at $6000, that's a $500 gain tops. If you sold at $5400 your gain would be $900 which is a lot better than $500. If you believe that a fast nickel beats a slow dime, selling at less than $5500 would work for me.
    theknowitalltroll;
  • SmallTownCoinsSmallTownCoins Posts: 688 ✭✭
    Hey bajj, I like that fast nickel, slow dime thing,
    It's kinda like buying a ten oz silver bar for 325 and selling it for 330...
    Which I do everyday. :-)
    Support your local Coin Shop
    LM-ANA3242-CSNS308-MSNS226-ICTA
  • CoinRaritiesOnlineCoinRaritiesOnline Posts: 3,681 ✭✭✭✭


    << <i>If you we're willing to pay 5500 for a coin based on what you thought you cold resell it for,
    Would you sell it for less that what you were willing to pay.. >>



    Depends on the coin, and the situation.

    Rare and obscure coin that seldom appears on the market? I'd hold onto it.

    Readily replaceable coin for which there are similar coins on the market? I'd answer as follows:

    If it was a good customer, and I stood a good chance to see the coin again one day, I would probably sell it.

    If it was someone who is hard to deal with or who busts my chops on every deal, I wouldn't.

    John Agre

    Coin Rarities Online
  • BAJJERFANBAJJERFAN Posts: 31,255 ✭✭✭✭✭


    << <i>Hey bajj, I like that fast nickel, slow dime thing,
    It's kinda like buying a ten oz silver bar for 325 and selling it for 330...
    Which I do everyday. :-) >>



    Presumably both the nickel and the dime will net you a profit most of the time.
    theknowitalltroll;

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