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A collector's expectations when ready to sell
stevepk
Posts: 238 ✭✭✭
As a collector who is not entitled to dealer buying prices, is it realistic to expect to break even on a coin collection held for ten years or longer? This assumes quality coins are purchased at reasonable levels, typically higher than Greysheet but significantly lower than absurd Ebay 'Buy It Now' prices.
I've read time after time on this forum that coins are a horrible investment because collectors typically pay retail and sell at wholesale, typically do not hold onto their coins for long enough, or unknowingly buy uncertified problem coins.
A collector who decides to sell has the following options:
1. Sell through an online auction and pay fees
2. Sell through the PCGS BST forum and avoid fees
3. Sell through the local coin club and avoid fees
4. Sell through Heritage and pay fees
5. Sell to a dealer at a show for an amount less than a collector would pay
6. Acquire a resale license and rent a table at a small local coin show as a dealer
Which of these do you find are the best strategy for a collector looking for the most rewarding sale of a collection? Should a collector expect to break even, or should a loss be expected? Is it best to view any personal collection as a sunk cost and never consider potential resale value?
I know timing is everything. I bought most of my current collection between 2006 and 2014 if this carries any weight.
I've read time after time on this forum that coins are a horrible investment because collectors typically pay retail and sell at wholesale, typically do not hold onto their coins for long enough, or unknowingly buy uncertified problem coins.
A collector who decides to sell has the following options:
1. Sell through an online auction and pay fees
2. Sell through the PCGS BST forum and avoid fees
3. Sell through the local coin club and avoid fees
4. Sell through Heritage and pay fees
5. Sell to a dealer at a show for an amount less than a collector would pay
6. Acquire a resale license and rent a table at a small local coin show as a dealer
Which of these do you find are the best strategy for a collector looking for the most rewarding sale of a collection? Should a collector expect to break even, or should a loss be expected? Is it best to view any personal collection as a sunk cost and never consider potential resale value?
I know timing is everything. I bought most of my current collection between 2006 and 2014 if this carries any weight.
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NGC registry V-Nickel proof #6!!!!
working on proof shield nickels # 8 with a bullet!!!!
RIP "BEAR"
Hoard the keys.
My best advice is to list a representative sample of your collection to this thread, and listen closely to what people have to say.
Doggedly collecting coins of the Central American Republic.
Visit the Society of US Pattern Collectors at USPatterns.com.
Selling options: some people say "send everything to Heritage (or your favorite auction house)". If I believed every coin would do better at auction, I would take my entire inventory and put it in an auction. If you have generic gold, proof sets, BU rolls, etc., all of those coins will most likely net you more money in another venue. Why would you pay a 17.5% commission on generic gold when just about any dealer will go with 5% or less?
The best strategy IMO is to analyze what kinds of coins you have, then determine where they will go. If you need advice to do that, find a dealer or mentor you trust.
Will you break even, or lose money, or make money? It all depends on what coins you bought at what prices and what those coins are worth now. Your mileage may vary.
Although there is not just one answer to each of your questions, I hope this helps.
An authorized PCGS dealer, and a contributor to the Red Book.
<< <i>none of the above. Consignment to a specialist dealer who will sell via a combination of a small, specialist-focused auction and fixed prices would work best for me >>
Agreed. I have tried many different ways of selling, and a specialist dealer that travels well, and has a well established customer base has worked the best. YMMV.
I am still young enough that I can wait another twenty years before I decide to sell, so if I am theoretically in the red today, there is still a chance that someday I will break even. I don't care that I am ignoring the concept of 'time value of money' or unrealized interests. This is a hobby to me, not an investment with expectations of huge returns. I'll be happy enough to break even. Because of the amount of money involved, I am concerned about an eventual liquidation.
Unfortunately, the only perfect way to value a collection is to sell it, and once you have sold your collection, you obviously no longer have it.
1) BST - No fees low risk
2) Great Collections - very low fees and no risk but sales will depend on the material
3) A trusted dealer.
Depending on the speed with which you want to sell the order may vary.
My Collection of Old Holders
Never a slave to one plastic brand will I ever be.
Doggedly collecting coins of the Central American Republic.
Visit the Society of US Pattern Collectors at USPatterns.com.
<< <i>Sell at auction and get 105%.
I think you mean at -12.5%
If you have all the time in the world and willing to work hard you maximize your return. On the other hand, if you need cash today, selling to respected dealer outright can be a very viable option.
Keep a spreadsheet of what you have, what you have "invested" in them (include any grading fees, shipping, etc), and take periodic looks at it so you have an idea of trending. Use PCGS Price guide in one column, auctions realized for same coin/grade/holder in another (knowing that not all coins are equal regardless of grade), and ebay sales (I don't always include them as "auctions realized" just because I think of HA and others more that way and ebay in a separate column).
Once you do that, you will have somewhat of an idea of what to expect, price-wise...and possibly even time to sell ideas (ie...stagnant, didn't sell, too high of a reserve, etc).
Keep an eye open at any shows you attend, even locals, to see if your type of material is in the case and how it seems to be doing (ask the dealer if there is interest in what you have as well...if his are selling well, he may give you an offer for yours and you will have an idea of the liquidity/value at that time, to that dealer at least).
From the above, and seeing how/where things sold, you may be able to see if one place, or another, is really a better deal (ie....if HA sells for 25% more than ebay/show, then their fee is possibly worth it.....if a similar sells on the BST for a price around HA, then the fee probably isn't worth it for that type of coin).
I play with most of the above scenarios with some of my main items....just in case, so I do understand some of what you are thinking. However, as others have said, no hard and fast rules on this. Things can change from moment to moment. Keys are liquid, yes, but not always at the prices we paid for them.
I've been told I tolerate fools poorly...that may explain things if I have a problem with you. Current ebay items - Nothing at the moment
I'm a type collector of sorts, but I've accumulated too many coins. I'll probably take a couple more years to get my collection to where I want.
I do have a PCGS pedigreed set, which I'll keep, but my plan is really to convert my other coins to AU to F (depending on the coin) and crack out any slabs and store in an album.
These grades have nice details and have circulated so I think that gives them extra history.
Raw coins go to eBay, I do about 50% of 99c opening and 50% BIN. I don't really like having to deal with the nice people on eBay, but there are buyers there. I don't want to give them away cheap though.
With slabs I research past auctions on eBay and Heritage and try and figure out where the best place is. I've tried selling some coins to dealers at coin shows, but really haven't had much success. Dealers are in business and need to make a profit.
I sent about $15,000 to Heritage this year and had a net loss of $850.
On eBay I made about $2500, but it is very expensive and 70% of the profit goes towards fees. I figure it takes me about 12 minutes per coin, with pictures, listing, shipping, etc. so it is very time consuming.
This report for my 2014 sales on eBay can help give you an idea of what is involved.
And on eBay I get nervous selling something more than a couple of thousand, so those will always go an auction house.
And for me, coins are a hobby not an investment. My personal opinion is until you have your mortgage paid, your kids educated and your retirement planned, you shouldn't really own more than a few thousand dollars of coins.
<< <i>I find this interesting because I have the same situation, only some years ahead of you.
I'm a type collector of sorts, but I've accumulated too many coins. I'll probably take a couple more years to get my collection to where I want.
I do have a PCGS pedigreed set, which I'll keep, but my plan is really to convert my other coins to AU to F (depending on the coin) and crack out any slabs and store in an album.
These grades have nice details and have circulated so I think that gives them extra history.
Raw coins go to eBay, I do about 50% of 99c opening and 50% BIN. I don't really like having to deal with the nice people on eBay, but there are buyers there. I don't want to give them away cheap though.
With slabs I research past auctions on eBay and Heritage and try and figure out where the best place is. I've tried selling some coins to dealers at coin shows, but really haven't had much success. Dealers are in business and need to make a profit.
I sent about $15,000 to Heritage this year and had a net loss of $850.
On eBay I made about $2500, but it is very expensive and 70% of the profit goes towards fees. I figure it takes me about 12 minutes per coin, with pictures, listing, shipping, etc. so it is very time consuming.
This report for my 2014 sales on eBay can help give you an idea of what is involved.
And on eBay I get nervous selling something more than a couple of thousand, so those will always go an auction house.
And for me, coins are a hobby not an investment. My personal opinion is until you have your mortgage paid, your kids educated and your retirement planned, you shouldn't really own more than a few thousand dollars of coins.
Very nice.
Hoard the keys.
<< <i>I find this interesting because I have the same situation, only some years ahead of you.
I'm a type collector of sorts, but I've accumulated too many coins. I'll probably take a couple more years to get my collection to where I want. >>
Any collectors "of sorts" can expect to be better off just reminding themselves why they got the things in the first place and just putting them away for the heirs to get screwed on.
<< <i>Has anyone every compared prices realized between Heritage and Great Collections, and which is a better deal for a collector to sell? >>
"TIMING" is about 56 times more important than WHO sells the coins.
<< <i>Has anyone every compared prices realized between Heritage and Great Collections, and which is a better deal for a collector to sell? >>
For common coins like Morgan Dollars under say $5000 I would go with GC just for the quicker turnarounds. Rarer, high dollar coins would go to Heritage.
Return on investment is more dependent on the cost of acquisition than which auctioneer that you use.
Based on the last ten years of acquisition, a net break even after selling fees is probably a good outcome, of course depending on the particular coins.
Liberty: Parent of Science & Industry
There are many ways to sell a coin, and, for certain, there is no one-size-fits-all solution. Often, you learn the best venue to sell a coin after you have already sold it via the second best..or third best...or...
Like Baley, I have always found buying to be far more fun than selling, unless the coin was not liked that much and sold for an Obscene Profit(TM).
Due diligence usually ensures "avid" collectors and fellow numismatists that their risks are low in numismatics when they're in the know. Going in blindly will not secure any profits for anyone. It is an exact science if you want to see them as investment vehicles. And TIMING is everything ,in this regard.
``https://ebay.us/m/KxolR5
Coins can be a fabulous investment if you show up during the final throes of a market crash when liquidity is very poor (1969-1970, 1975-1976, 1982, 1995-1997, 2009-2010). On top of that you must also have a discerning eye and buying something other collectors and investors will want in the following years. If you aren't capable of doing that then enlist the help of other collectors and dealers who can help guide you.
Investing on coins is the same as you invest on your 401K, you buy every month regardless mutual fund market is high or it is low and wish in the long run you can come out ahead. How much you can make (or how much you would lose), it depends on when do you sell. For coins, if you sell them at down market, don't expect too much. This is my honest opinion.
Why?
1. Margins
2. Selling costs such as auction fees and commissions.
3. A slowly shrinking and ever more selective market.
4. Changing tastes in collecting.
5. Irrational exuberance when buying (you see a lot of evidence of that on this forum).
6. Lack of knowledge of the real state of the market. This is a problem for collectors who seldom or never sell coins while actively collecting.
<< <i> A collector's expectations when ready to sell >>
I believe I will never have any expectations, since I do not intend to sell......Cheers, RickO
100% Positive BST transactions
Leo
The more qualities observed in a coin, the more desirable that coin becomes!
My Jefferson Nickel Collection
Buy highly attractive, problem-free coins in the first place. They may or may not sell for more money outright, but they will always sell more easily.
Selling a $20 coin can be just as much work as selling a $2,000 coin. Some discipline is in order in regard to acquiring cheap items, or you need to be willing to part with them in batches and groups at below-wholesale prices.
The more work you're willing to do to fit the right coin to the right market, the better you'll do. Practice helps -- selling your main core collection probably shouldn't be your first experience with selling coins.
Some options that have been left out include maintaining relationships with dealers who actually want the sort of things you collect, maintaining contact with collectors who like the same sorts of things as you, and going dabbling-dealer and setting up at a few shows yourself. Many of my easiest and best sales in the last few years have been situations where I thought, "Hmm, so-and-so might like this," and privately offered that individual the item(s) in question.
I have no idea how the "average" collector fares. I am aware that some people make crazy profits, and some people lose their shirts. Personally, over the years I've found I turn a small profit -- the money isn't much in light of the hours spent, but it's nice that the hobby can pay you a little for participating. None of my other hobbies do that.