Local coin shops not interested in retail customers anymore?
JoeC23
Posts: 16 ✭
Was in one of the local coin shops a few months ago and saw a nice PCGS graded Capped Bust Half Dollar in their inventory. Now this coin shop owner is a friendly/personable enough but prices his items at retail+++. They had it priced at $600 which I though was high so I offered $500 which I thought was fairly generous for the grade. My offer was declined and I went on my way.
A few weeks later I was back in the shop browsing for some supplies and was idly chatting with the owner's assistant. I asked about the coin and he said that they recently had to wholesale it out to a big dealer who swings by the shop every few months since it wasn't getting any interest. The assistant said that a lot of their better stuff is wholesaled to these folks since they don't have any market here locally. Curious I asked what they got from the wholesaler for the Capped Bust Half and the assistant checked their records and said $375.
Could someone explain why the coin shop owner would reject my reasonable offer only to wholesale it out for much less shortly after. Do dealers generally like to avoid dealing with retail customers and only want to deal with other coin dealers? For reference I believe that I'm a customer in good standing with this dealer and have spent a good amount of money at his shop in the past 5 years.
Comments
That is indeed a strange situation. I would have left my bid on a business card with contact information...although, the wholesaler who purchased it may have influenced the seller with a volume buy..which could be hard to compete with. Nonetheless, I find it amazing that your offer was turned down only to sell at a major discount a short while later. Cheers, RickO
Sometimes I can understand that its easier to sell even a discount to a guy(vest pockteer) who will buy a large quantity of coins at once, than to piece meal it out a coin at a time. Also, by discounting it some to another dealer, they usually reciprocate the deal when you need something they have. But, I will never understand why certain dealers will not budge at all on a price to a interested retail customer, yet wholesale it considerably less to another.
A local shop here (now closed) was like this, he would put exhorbit prices on stuff, and not sell it , yet have customers who were interested in paying a fair retail price, but he wouldn't budge, only to call me 2-3 months later and wholesale the crap out of it at huge discounts.
Unless they are moving a bunch of low value, stagnant inventory as well, I do not understand it... even then, I am not sure the ROI is worth the customer base.. Cheers, RickO
I'm speculating, as someone who has spent very little on coins in a coin shop. If he remembered your offer, as he was including that coin with the (probably very many) other coins that he sold that dealer, would he have been able to contact you to see if you were still interested?
Ditto to all of the above. I have struck out at a lot of B&Ms due to the large volume, wholesale buyer effect. Bottom line -- Big deals talk, small deals often walk.
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The owner of the coin shop that I used to frequent passed a way a few years ago. The shop is still there, along with a major remodel, but has turned into a "gold & silver" exchange. There are some coins in the display case, but the place has lost it's flavor. The guy behind the counter was sorting through a pile of 90% silver and asked if I needed something. I replied that I was looking for a 1917 Type I for my collection. He replied without looking up that he only deals with silver coins, not nickel (presumably referring to a Type I Buffalo Nickel). I made my way out of there fast and have not returned.
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Sadly, as a newbie, found a local coin shop, that went into hoping to not only buy some coins, some books and learn some things and make a client for a long time. The shop owner only cared how much I wanted to spend, was of no help in teaching me anything and if anything, was put off that I actually asked questions and was trying to learn about the hobby. Really left a bad taste in mouth, and have learned a lot on these forums- much more than the Shop. Which is a shame, he lost what would have been a valuable client
It makes sense, though as you pointed out it is not the most efficient use of time and money when picking out a particular datapoint. I will explain-
Many (most) brick & mortar coin shops take in an enormous amount of numismatic detritus (modern US mint and proof sets with cracked lenses and/or missing and damaged paperwork, thousands upon thousands of late date, average circulated Wheat cents; harshly cleaned type; esoteric foreign coinage) and the best or most efficient way to get out from under this material is oftentimes to work with a vest pocket dealer or wholesaler. Such a person might swing by the shop once each month or once every three months or whatever their schedule might be and they might buy from the shop all of this slow moving (or completely illiquid) material at lower, sometimes far lower, than retail value. This helps the shop owner because if no one is buying it locally then it has to disappear and turn into cash somewhere else and not everyone wants to set up a second business selling on ebay. However, in order to maintain this relationship the vest pocket dealer or wholesaler has to have the transaction work in their favor, too. This is where a coin like the one you attempted to buy might come into the picture in that the shop owner targeted a realistic price (in his/her mind) for the retail value of the coin and below that price they already chalked the coin up as going to their vest pocket dealer or wholesaler contact. Your offer did not meet what they wanted while they were actively marketing the coin to the retail public and then your offer disappeared only to leave the contingency plan in place.
It's not perfect and the shop owner might have wished that the coin were sold to you instead, but it is also not a head-scratcher when you take circumstances into consideration, either.
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Coin deals are a point in time and subject to current market conditions. He wanted $600 for his coin you were not a buyer at that. I think he might have been ticked you were looking for such a huge discount. I might discount something 5 pct in a negotion but beyond that they can get lost. If your not gonna pay the money you don't get the coin.
He doesn't care what you think about it nor did he make a counter offer like at $575 which is something I may have done depending on how much I had in it.
It's none of your business how they run things. But if he later gave it away for $375 does not make sense bc that material is first team retail material, not something I would give away. I am also surprised somebody would tell you what they later on sold it for. We're it an assistant of mine they would be reprimanded or possibly fired.
As far as bias I don't believe anybody is going to chase away a good retail customer, prospect. But if they are looking for some huge discount it's not unusual for me to simply tell them to go find one.
His shop has probably become only a buying point. He is not interested in "small" retail sales unless they are at a very big markup. His probable business plan is to buy low and sell in quantity to the wholesale dealers who stop by. Having some nice coins available makes unloading some of the junk easier when putting together lots for sale to the wholesale dealers. If all he had to offer was junk the wholesale dealers wouldn't bother stopping to see him anymore.
I would be puzzled too. Owner probably forgot your offer. Maybe in future you could write down your offer with name and address included. Just tell him, "In case you change your mind later." Couldn't hurt.
I had a coin dealer friend tell me that he sells his better coins to his regular customers who are serious collectors for the same or a little less that what he would sell them to other coin dealers. He explained that when he sells to a regular customer there is always a good chance that he will be offered back the coin again in the future should the collector need money or his collector interests change. This sounded logical and it made good business sense to me. As far as JoeC23's experience, refusing an offer of $500 for a coin and later wholesaling it to someone else for $375 makes no sense at all to me.
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You are assuming the $375 was the correct selling price also. Not sure why someone would even share that?
Maybe he does not want retail customers negotiating about every price before they buy something. Have you purchased much from them before?
It makes perfect sense since you mention it was a nice coin. In sale, we consider it a fish-bait. Why would wholesaler come to you if you offer the same price and selection with the guy next door? A smart seller would offer something that would catch buyer's eye and then sell the rest of add-on.
In other words, shop owner rather lost one time deal of $500 in sale from you than $375 and potentially thousands more with other coins from wholesaler.
Could be the dealer forget about your offer of $500. I know a lot of coin dealers with bad memories. They can't remember every deal on every coin. I doubt this coin was sold off in a bulk dealer to a cleaner. The fact that you were told there was no interest in this coin was just bs. They obviously forget your offer or don't think much of you as a customer, regardless of what you've bought in the past. If they know you are a good grade, price evaluator, even more reason for not "allowing" you get one over on them.
To refuse $500 only to wholesale at $375 seems quite stupid!
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assuming everything is above board, I would say that if the dealer could have done it all over again he'd sell it for the higher price, but how could he know that???
all things considered, it isn't really easy or logical to make a comparison between wholesale and retail in terms of what is done, prices paid and how it takes place. my boss has told me on more than a few occasions that if he had the choice, he would do nothing but wholesale, retail can be troublesome and time consuming at times. that's why he has me!!!
if you have a retail location it is hard to get around doing retail business.
I'm sure there are pleanty local B&M shops interested in your, or anyone's, business.
Try the following;
Check to see if they have a library and sell books and supplies.
See if they are involved with their local coin club.
Try having a real conversation with them about both numismatics and other topics. If they converse they will likely be interested in not only your opinions but your business also.
Have a coin or two for show and tell. If you show them what you collect they will likely be interested.
See if they are involved with the hobby beyond their own counter. Memberships in national and regional coin organizations show more interest.
So, if any of you are ever in Cincinnati, Ohio please look me up at Coins Plus. I will be happy to talk coins with you and maybe even sell you one or two!
I hope you all have a happier time with your hobby. I'm having a blast!
Sincerely,
Brad Karoleff
A: The year they spend more on their library than their coin collection.
A numismatist is judged more on the content of their library than the content of their cabinet.
Sometimes dealers will sell groups of coins to other dealers and getting a bit less on one coin (as per the OP), in order to move other coins as part of a larger group.
Dealers are like women. Trying to understand them is futile.
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I think that if the offer was reasonable I would have sold it to the retail customer. Getting a good retail customer can get you more business just simply by word of mouth advertising. If he had one really nice coin, I am fairly certain that he had more nice examples. I do not think that one coin going to a retail customer instead of a wholesaler would really hurt the relationship with the wholesaler unless the wholesaler was expecting to get said coin.
Thanks for the explanation folks! Just a bit frustrated. In the past few years I've had a few of my favorite coin shops change hands, drastically decrease collector coin inventories, and become venues for buying collections/jewelry from the uninformed.
Going to a coin show this weekend so perhaps I'll have better luck there.
Thanks Again
Look at it this way.
You lost out on a coin you may have liked.
They lost out on a paying customer by the way they did things. It's their right to do it that way, but, to very very few people, does the way they did it make sense.
My guess on it would be that they wanted what they wanted and turned you down. When someone else came in, the wholesale buyer, he likely had more items out and then saw that, or asked about other items, and gave them a bulk price...they likely attributed out the price a bit and put it as $375.
If the owner had any brains, they likely realized they gave up $125 of "profit" by being stiff and stubborn and then could have felt roped into selling it with the wholesaler and just figured to do it.
Unless I see something I REALLY need (and in coins, that is rare as there are always more coins around the corner) and can't get elsewhere AND it is a super great price in my favor, I prefer to ignore and avoid dealers like that. They are just as likely to think of you as a problem, because you offered less than they wanted and then THEY sold it for even less than you offered, as they are to just forget about you until the next time you come in. It isn't a situation you will win at unless you and they hit it off on a personal level, or they think you are a sheep to be fleeced.
Heck, look at a response above....that dealer would look at you negatively because you offered $100 less (~18% discount) rather than the 5% that that dealer thinks is reasonable, to him.
On this thread, YOU are the only one who saw the coin and YOU deemed it worth $500...not anyone else here. So going by what you said, dealer screwed up their own profits.
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
This sums it up nicely.
This. It would simply have been a bulk deal minus one coin.
In my travels, I've seen times where dealers or folks holding anything you may show interest in, either priced for sale or not, may withhold for who knows why. Even with solid offers. Sometimes it comes off as an ego trip. I guess some folks might just clam up if you have a rep for knowing what your talking about too. Afraid you might make out on the deal a bit too much. Also, gotta remember your not the only one with money, and even I might not sell something or lover the price a cent to a person that rubs me wrong and turn still around and just hand it to someone I dig or believe is the right placement for something.
The cool thing is that when this happens, I still gave my money, and heck, FOR SURE something will come along cool enough and the right buy as soon as I turn 5 degrees.
For the record, I don't think a 500 offer on a 600 coin is unfair, countered to 550 done deal usually. The 25% mark is usually rejected out if hand but less than that usually get some sort of working response.
I have some well known dealers who will not budge on price to a retail customer. I liked a low five figure coin, asked the dealer for a 9% discount and had a check ready for him. The guy was incredibly rude to me. He never got his asking price for the coin. Six months later, it was at a Signature Sale and I know for a fact that he got less for it from Heritage, even at 107% of hammer, than he would have received from me.
I have seen coins sit in inventory for over a year before they are quietly wholesaled. And these are not small time dealers, either.
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