Options
Anyone with experience selling a collection?
stevepk
Posts: 239 ✭✭✭
I've read numerous times that more often than not, collectors are unable to recoup the money they put into a collection when the time comes to sell. I would like to think this is an inaccurate statement and that a collector can be expected to break even or perhaps make a small profit when selling a collection considering he had quality material and was not too impatient to sell.
Does anyone have experience or heard of stories of collectors who have sold an entire collection? Suppose a collector builds a quality collection from coin shows over a span of several years and holds the collection for ten years or longer before selling. Assume there are no unusual variables that would easily explain a loss (buying counterfeits or problem coins, loading up on gold and silver at all-time peaks, paying extreme amounts for modern MS70 coins, and so on).
If a collector is patient enough to find the right buyer for his material or sells to an interested dealer, how much of a loss should he expect at the time of sale? Should the collector expect to break even or make a small profit? I know this is a difficult question without a specific answer, but a range would be appreciated. I know the method of sale makes a big difference also. If left to a non-collector, the coin collection would be brought into the nearest pawn shop for 40% of melt regardless of numismatic value. Conversely, if the seller is lucky enough to live close to a coin club with an eager number of buyers, the collection will sell for much more.
I'm just curious if the money I put into my collection is money I'll never see again. I have limited experience selling coins and have definitely done more buying than selling since I've begun. I am also aware that Ebay absorbs a big chunk of ever sale and that those fees seem to increase every year.
I am not looking for stories of coins that were 'flipped' quickly after initial purchase, but rather held in a personal collection for a number of years before being sold.
Does anyone have experience or heard of stories of collectors who have sold an entire collection? Suppose a collector builds a quality collection from coin shows over a span of several years and holds the collection for ten years or longer before selling. Assume there are no unusual variables that would easily explain a loss (buying counterfeits or problem coins, loading up on gold and silver at all-time peaks, paying extreme amounts for modern MS70 coins, and so on).
If a collector is patient enough to find the right buyer for his material or sells to an interested dealer, how much of a loss should he expect at the time of sale? Should the collector expect to break even or make a small profit? I know this is a difficult question without a specific answer, but a range would be appreciated. I know the method of sale makes a big difference also. If left to a non-collector, the coin collection would be brought into the nearest pawn shop for 40% of melt regardless of numismatic value. Conversely, if the seller is lucky enough to live close to a coin club with an eager number of buyers, the collection will sell for much more.
I'm just curious if the money I put into my collection is money I'll never see again. I have limited experience selling coins and have definitely done more buying than selling since I've begun. I am also aware that Ebay absorbs a big chunk of ever sale and that those fees seem to increase every year.
I am not looking for stories of coins that were 'flipped' quickly after initial purchase, but rather held in a personal collection for a number of years before being sold.
0
Comments
-Paul
Experience the World through Numismatics...it's more than you can imagine.
There is also a transaction cost that has to be overcome. Even if a coin is bought right and resold on Ebay for example, expect to forfiet as much as 15% in selling fees.
A wise coin collector did not consider his passion to be an investment, but rather a hobby like fishing or golfing, where you spend money each year for the sheer enjoyment of participating.
Having said all that, many collectors have done extremely well at the time of sale. Likewise many have done poorly.
Sure, with enough effort and time each piece might be sold separately through channels like ebay. This might lessen the over all loss. With some luck there might even be a small gain.
Lance.
<< <i>Eric Newman is currently in the process of selling his collection. Ask him how much money he's losing.
-Paul >>
Considering the fact that all money from the sale is being donated to his charity the answer to your comment is actually 100% of purchase price
After a few years of golfing, a golfer is left with broken tees, dirty golf balls, worn out spiked golf shoes, used clubs, a golf buggy with a couple of hundred miles, and an expired resort membership. None of these are valued after being enjoyed like they were when they were brand new. Suppose I purchase a PCGS certified 1795 flowing hair half dollar with original surfaces and great eye appeal. I don't mind the fact that someone else owned the coin before I did. This 1795 half dollar in twenty years will be the exact same 1795 half dollar it was on the day I bought it. Details will not wear from the coin while in my possession and the coin will not be anything less than a 1795 half dollar within 5, 10, or even 20 years. It is physically a non-depreciating asset, unlike golf clubs and plastic golf tees.
As a golfer, I would expect my used golf clubs to be less desirable to others over time on the premise they are used and have incurred wear. However, I do not expect my 1795 half dollar to be any less desirable to someone twenty years from now on the premise it has been already owned by me.
Onto the subject of buying retail and selling wholesale.........
How do you make the differentiation between buying wholesale versus retail? If I go to a coin show and do my homework to buy the best coin at the best price from a large number of dealers, am I still buying at full 100% retail? If so, shouldn't 10 to 15 years be enough to absorb the difference between wholesale and retail? I am ignoring the time value of money in consideration of the fact my CD in the bank earns less than 1% interest.
WS
<< <i>Coin collecting is almost always compared to golfing when this subject arises. However, I do not feel the two can be compared. >>
Both are non necessity activities and often cost money to enjoy.
You can expect a better return on your 1795 Half than the worn out cart, but you may well lose money when you sell.
If you are investing in coins rather than collecting, that is a different matter. I would suggest buying the best coins available for the money rather than pieces that fit neatly into a set. Also do not fall in love with a coin and think about how you will liquidate the holdings before you lay out real money.
BTW I have never bought a retail coin at a coin show or a retail B&M .......
If you have collected large quantities of generic, common-date, common-grade material (low, mint-state Walkers, Morgans, Buff Nickels, and Lincoln cents) don't expect to do to well no matter how long you hold them.
If you picked coins with attributes that go beyond their grade (really nice toning, exceptional detail, rare varieties) you might do a little better.
If you collected truly rare coins, key dates, or coins which are currently extremely popular, you might do just fine.
If your collection consists of a few finest-known examples in popular series, you'll certainly do fine.
All of this assumes, of course, that you sell them in the proper venue, at the proper time, and that your coins are represented to their full potential. If you've held them for 10 years it will almost certainly be to your benefit to evaluate them for potential upgrade/plus grade/sticker potential. The need for a recent appraisal (third-party, fourth party grade in the case of coins) is common for most valuables that have been off the market for a decade. A really, REALLY great relationship with a well-connected dealer can yield enormous returns in this regard.
<< <i>What IF you bought almost every coin off of ebay with great eye appeal at a fantastic price price (using market pricing knowledge) as opposed to buying at a coin show or a B&M?
BTW I have never bought a retail coin at a coin show or a retail B&M ....... >>
Yeah yeah...we get it. You tout ebay every chance you get.
The thing is, some of us have bought off ebay, some still do, and some have, or still do, sold off ebay as well. It is ONE (1) venue, the end all, for coins. To not take the opportunity to buy at a coin show, or retail B&M, is shortsighted for some. For specialty coins, which errors are, it may not be as big of a deal, but most on here don't confine themselves to just errors. Therefore, many WILL be able to find nice coins for their collections at B&Ms and coin shows and not so much off ebay anymore as it has turned into a hassle for many. I am one of those. I don't badmouth ebay, as it has its uses, but I am not going to be a tout for it either.
That said, for the OP, it really depends on too many factors.
* Were the coins bought recently or held for awhile?
* Were the coins "bought right" at the right price?
* Were they bought at the height of the market (for that series/coin)?
* Are they "average" or are they a coin that is hard to find (toning/grade rarity/etc)?
* Are they "in the right plastic"?
* What direction is the current market going (not just coin market, but economy) when it is time to sell? Discretionary funds are key for many.
* Is the collection full of more "affordable" coins or coins that are much higher $$$?
* Are they "keys" or semi-keys?
* Are you looking to take your time to sell or do you just want to be out of it as soon as possible?
* Selling them yourself (ebay/coin show/internet (BST)) or going to use someone who wants a cut (GreatCollections/Heritage/dealer on consignment/etc)?
* Sell to a dealer? In this case, if you have a specialty collection, you really need to find a dealer specializing in the same thing...else, is the dealer a B&M, vest pocket, internet dealer, etc?
Way too many questions that everyone is going to have different answers for.
There are coins I have purchased, and I think I "bought right" when I got them, that, due to a changing market, would likely mean a loss if I sold them today. I like them, though, and have no desire to sell right now. Would hope to be able to leave them to my son when I am gone (a long, long, time away....I hope
Some other coins, I paid well for, but the market in them has continued to go up. I, or my son, would make a nice amount today and maybe more in the future. Case in point is our 55/55DDO Lincoln. Paid a very fair price, at the time, imho (I paid the dealer ask for it and didn't negotiate...but I worked with a super good/fair dealer), and I think it has increased somewhere around 50% in that time. Others have increased 100x or more, but not usually the more expensive coins
I, like most everyone, would love to see a profit, but I am in this as a collector and not a dealer, so I am using discretionary funds....I HOPE that, when sold, they sell for more than when purchased, especially considering any inflation and time value of money...lost opportunity. But, as a realist, I know that may not happen.
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>What IF you bought almost every coin off of ebay with great eye appeal at a fantastic price price (using market pricing knowledge) as opposed to buying at a coin show or a B&M?
BTW I have never bought a retail coin at a coin show or a retail B&M ....... >>
Then it probably wouldn't take very long to sell off your whole collection
<< <i>I'm just curious if the money I put into my collection is money I'll never see again. >>
Money you may see, money you may not see. KNOWLEDGE, acquired from your collecting experience, will be yours for life.
- Marcus Tullius Cicero, 106-43 BC
It's accurate. Collectors can take hits when buying or selling, and the latter is actually more difficult that buying coins in the first place (unless you're willing to leave a chunk of change on the table).
From a purely financial point of view, simply buying and holding for a decade or more is not necessarily the best way to go, for the simple reason that price escalation is not linear in time---prices for sub-sectors of the coin market tend to rise and fall. Ten years down the road, prices for what you want to sell could be in retreat. As a modest example, look at the prices of MPLs---they rose in the run-up to the centennial of the Lincoln cent, and prices have since come down from their highs. An investor holding such coins would have sold them before now (unlike me).
What you get (in terms of a percentage of 'FMV') depends very much on what you have to sell. Items that are popular and scarce or in seldom-seen MS grades tend to do better than generics or modern proof sets, for example. Whom your coins are sold to matters too. Take them to a mom and pop local coin shop, and you are not likely to get a strong offer. Such dealers tend to make most of their money (aside from bullion-related trading) by buying, not selling. They will look to buy at low wholesale and flip items to specialty dealers. Learning how to intelligently sell is very important, and collectors should 'practice' every now and then to get a feeling for what the best routes will be for the sales of their collections.
The assumption that one's collection is a 'quality' one is a part of the problem. In many cases, it is false. Too many collectors try to buy on the cheap, and end up with collections that reflect this acquisition philosophy. I have personally seen dozens of collections where the quality simply was not there, and the owners took big financial hits when they sold their coins. I have seen a number of instances where dealers simply refused to make any offer because the coins were overgraded (and I saw the coins myself, and agreed with the dealers). One very important reason for collectors to put up items for sale every now and then is to obtain independent assessments of one's view of eye appeal, grade, etc. I would not leave this to TPGs and assorted stickers.
As pointed out earlier, there are simply too many variables to answer the OP's question in a succinct and compelling manner.
RMR: 'Wer, wenn ich schriee, hörte mich denn aus der Engel Ordnungen?'
CJ: 'No one!' [Ain't no angels in the coin biz]
<< <i>[ To not take the opportunity to buy at a coin show, or retail B&M, is shortsighted for some. For specialty coins, which errors are, it may not be as big of a deal, but most on here don't confine themselves to just errors. Therefore, many WILL be able to find nice coins for their collections at B&Ms and coin shows and not so much off ebay anymore as it has turned into a hassle for many. I am one of those. I don't badmouth ebay, as it has its uses, but I am not going to be a tout for it either.
. >>
You are correct that I now only collect error coins. Specializing has huge advantages. Specialists know market pricing so we can recognize a great deal.
My field is so narrow that I will never find the error coins I need for my inventory or collection from a B&M.
I can't even go near the retail price of error coins at coins shows as I know what I can get a similar coin for off the bay.