Pricing strategies at coin shows

stevepk · October 11, 2012 3:16AM

I've been told there is typically a high volume of dealer-to-dealer transactions at most large coin shows. Typically, dealers sell to other dealers at lower profit margin so they can leave some profit for the next guy. Coin dealers do this because they all rely on each other for inventory. It's not like anyone can pump out more capped bust and seated liberty coinage like a manufacturer, and nice coins typically are not acquired from the general non-collecting public. Lots of nicer material is tightly held in the hands of advanced collectors who can afford to hang on to the coins they treasure the most.

Coins are typically sold at higher profit margins to collectors who are not active dealers at a show because the dealer knows the buyer is not looking to 'flip' the coin and may have a stronger emotional bond to the coin.

This raises two questions from the collector standpoint. How much more does a collector pay than a dealer for a quality coin at a coin show, and what can the collector do to acquire a coin at the best price at a coin show? As a collector, my strategy has been to locate as many comparable examples as I can at a large show and make a decision accordingly based on multiple factors, price being one. Is there anything I can do to minimize the 'collector' premium to the price I pay, and how much of a premium am I being charged as a collector?

Using the strategy described above, can I still expect to pay full retail for quality coins, or should I expect to aquire nice coins for prices a bit closer (but not quite) wholesale?

DIMEMAN · October 11, 2012 3:38AM

I would say it varies from 10-25% depending on type of coin and how easy it is to move and how long they have had it in inventory. And even these variables probably differ between dealers.

JMHO

WaterSport · October 11, 2012 3:49AM

I think we are all stuck with retail...I have never seen a George Washington Birthday Sale or a preowned sales event yet....I have had some price cuts with dealers which I am on a first name basis with. But I really do not look at coin dealers as being different than any other wholesale-retail business.

WS

TahoeDale · October 11, 2012 3:52AM

If you are knowledgeable in your series, I suggest you go to the other sources for coins, other than dealers on the bourse.

Especially if you are seeking nicer coins( 2500 to 10,000 and above)

Auctions, and other collectors.

Auctions are where dealers buy much of their inventory, and you can pay more, since you are not flipping to a retail buyer.
Collectors in your chosen series can price their coins lower than dealers, without the dealer mark-up on a consigned coin.

But, a dealer at a show, or with overhead at his/her office, has to charge more, if they want to stay in business.

Same holds true for selling.

Kove · October 11, 2012 3:53AM

Dealers often price coins lower to other dealers, but "leaving something for the next guy" isn't the main reason.

First, most dealers buy in volume. If someone is going to buy 10 coins from me at this show, and 10 at the next show, etc., I can make less on a per-coin basis to keep that volume relationship going.

Second, dealer transactions are generally fast and easy. Say a price, then play or pass. Maybe negotiate on a couple coins, but no chiseling on every coin.

Third, there is no return privilege among dealers. When I sell a coin to another dealer, I know it's sold and can immediately commit my capital elsewhere.

Fourth, I want the dealer to return the pricing favor to me when he/she has something I need. I also want to be thought of when they come across nicer coins.

Generally, this dealer wholesale business speeds up the velocity of my money. I make lower margins, but get more deals done.

Collectors don't get this same treatment, as the transactions are fewer, slower, with the possibility it might not work out. However, the markup isn't necessarily huge. Collectors probably only pay 5-10% more than dealers on most transactions.

illini420 · October 11, 2012 3:55AM

When I'm selling my coins, I'm not going to lower my price just because the person is a dealer. I see no benefit in giving up some of my potential profit to someone else when I'm sure that I can sell the coin for retail myself. If that costs me some better deals when I buy from other dealers that play this game, then so be it. If there has been something that I've been trying to sell for quite some time that isn't moving, sure I'll lower my price and sell wholesale, but I'd also sell at the same low price to any Joe off the street if they show me the money!

CoinRaritiesOnline · October 11, 2012 3:56AM

I probably do less wholesale sales than a lot of the other dealers who post here, but I would say that if you want to be treated more like a dealer and pay wholesale prices, you need to buy like a dealer:

1. Make your decisions quickly and efficiently.
2. Don't expect retail service.
3. Buy in quantity.
4. Pay immediately in good funds.
5. Do not expect a return privilege.

LindeDad · October 11, 2012 4:41AM

My pricing strategy at a show is only look for what I can't find anywhere else.
Show prices are usually full bore in most cases as the dealers have extra overhead to take care of.

RYK · October 11, 2012 4:52AM

I personally do not change my buying strategy at the coin show, compared to other venues, with respect to price. The price I am willing to pay is the same be it on ebay, Heritage, the bourse, or with my favorite dealer.

MrEureka · October 11, 2012 5:16AM

Most dealers at coin shows - myself included - do not offer secret bargain prices to other coin dealers. We're just happy to make a sale, and we'll take the cash wherever we can get it. Dealer, collector, whatever. Doesn't matter. Show me the money.

On the other hand, for those of us that do not differentiate our prices, other dealers that do differentiate (i.e., do serious retail business, with a serious retail presence) quickly relieve us of inventory, often while some collector is "thinking about it". So if you want something and you find it, it really helps to be prepared to make a decision on the spot.

That said, most dealers prefer to sell to collectors if it's fast, painless, appreciated and (just maybe) if there's the tiniest bit of extra profit.

MrEureka · October 11, 2012 5:28AM

Another thought that may be relevant. More than a few times, I've stopped doing business with someone - usually a collector/investor, but sometimes a retailer - because there was no price I was willing to charge that would justify the effort (or risk). In other words, any amount of aggravation (or risk) can be compensated by extra profit margin, but it's moot if you have a conscience.

WTCG · October 11, 2012 12:42PM

<< I probably do less wholesale sales than a lot of the other dealers who post here, but I would say that if you want to be treated more like a dealer and pay wholesale prices, you need to buy like a dealer:

1. Make your decisions quickly and efficiently.
2. Don't expect retail service.
3. Buy in quantity.
4. Pay immediately in good funds.
5. Do not expect a return privilege. >>

If you want to be treated like a dealer you have to either be a dealer or conduct business like a dealer. No returns, no retail service hand-holding, buy more than one coin at a time and all sales are final.

2ltdjorn · October 11, 2012 12:46PM

It can't hurt to be a genuinely nice guy or gal. I am more inclined to spend more when I enjoy the dealer or the conversation (and of course the material). I would expect that if a consumer is buying from me the same would be true.

savoyspecial · October 11, 2012 12:50PM

CRO and Wei make great points! It is a double-edged sword when you want the 'brother-in-law' discount.....Time to take the training wheels off

wayneherndon · October 11, 2012 1:42PM

<< I probably do less wholesale sales than a lot of the other dealers who post here, but I would say that if you want to be treated more like a dealer and pay wholesale prices, you need to buy like a dealer:

1. Make your decisions quickly and efficiently.
2. Don't expect retail service.
3. Buy in quantity.
4. Pay immediately in good funds.
5. Do not expect a return privilege. >>

6. No lay-a-ways.
7. No trade ins.
8. Don't ask to pay with a Credit card.
9. Don't complain if it doesn't sticker, cross, upgrade, etc.

mrpotatoheadd · October 11, 2012 2:33PM

<< As a collector, my strategy has been to locate as many comparable examples as I can at a large show and make a decision accordingly based on multiple factors, price being one. >>

This method ("What's the best you can do on this? OK- I'll get back to you later (after I check around some more)...") doesn't sound like the kind of thing that will get you treated like a dealer, I'm guessing.

TwoSides2aCoin · October 11, 2012 8:02PM

Remember how the teacher's pet got everything ?

PerryHall · October 11, 2012 9:42PM

<< 

<< I probably do less wholesale sales than a lot of the other dealers who post here, but I would say that if you want to be treated more like a dealer and pay wholesale prices, you need to buy like a dealer:

1. Make your decisions quickly and efficiently.
2. Don't expect retail service.
3. Buy in quantity.
4. Pay immediately in good funds.
5. Do not expect a return privilege. >>

If you want to be treated like a dealer you have to either be a dealer or conduct business like a dealer. No returns, no retail service hand-holding, buy more than one coin at a time and all sales are final. >>

I agree with all points here except the "buy more than one coin at a time" point. What if a single coin that's very expensive is being purchased by a repeat buyer that's well known to the seller? Shouldn't the buyer get the same consideration?

BAJJERFAN · October 11, 2012 11:14PM

<< When I'm selling my coins, I'm not going to lower my price just because the person is a dealer. I see no benefit in giving up some of my potential profit to someone else when I'm sure that I can sell the coin for retail myself. If that costs me some better deals when I buy from other dealers that play this game, then so be it. If there has been something that I've been trying to sell for quite some time that isn't moving, sure I'll lower my price and sell wholesale, but I'd also sell at the same low price to any Joe off the street if they show me the money! >>

Finding viable retail customers is still not an easy thing for the collector to do IMO.

CoinRaritiesOnline · October 11, 2012 11:48PM

<< I agree with all points here except the "buy more than one coin at a time" point. What if a single coin that's very expensive is being purchased by a repeat buyer that's well known to the seller? Shouldn't the buyer get the same consideration? >>

My comments were in response to the OP's question, and this is not the scenario he described.

abitofthisabitofthat · October 12, 2012 12:34AM

For a collector, sometimes trying to get the absolute best price on every coin can hurt. If you are trying to get as close as possible to wholesale, you will likely not be shown new purchases as often as a collector who does not haggle a lot. This may or may not matter to you. If the coins that you are buying are fairly common, it may not be an issue. If the coins you seek are scarce, paying up will get you access to better coins.

I have a few regulars at my local shows. Some hagglers, some not. I will not show certain new inventory to the hagglers, I will set aside nicer coins to show those who pay reasonable retail prices.

Pricing strategies at coin shows

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