Dealers: You know when a coin has been in inventory too long when...

MGLICKER · December 31, 2013 1:56PM

Just closed my year end inventory and saw a Platinum Eagle that I counted last year.

tightbudget · December 31, 2013 1:57PM

I once sold a coin to a dealer at a show. It languished on his website and in his case at shows for nearly 4 years IIRC. Don't know what happened to it in the end.

MGLICKER · December 31, 2013 1:57PM

A bunch of Morgans as well, but I have not been an active seller of those.

One is a nice PL in a Doiley.

magikbilly · December 31, 2013 2:06PM

When I go to my old B&M sometimes on the 2x2 or envelopes I see Mel's (not Mehl

) handwriting. Long gone. But nice to see. He was my old dealer 25 years ago or more.

Eric

Shamika · December 31, 2013 2:08PM

How long is too long?

TwoSides2aCoin · December 31, 2013 2:14PM

It can never be too long. Only so long.

lostincoins · December 31, 2013 2:44PM

the only time I can think of is when you set a coin for sale and it sits around for 6mo.

ElKevvo · December 31, 2013 10:57PM

You originally described it as a white blazer and now is described as crusty with BU details. I guess it depends on the dealer and how much they have into it....some hang onto coins way to long IMO but it is their stock...

K

jdimmick · December 31, 2013 11:11PM

You see it all the time here at local shows, I have seen several of the same coins in the same dealers case for going on 3 years +. I don't know how they do it, I have to keep stuff moving.

Flea market dealer (only one left now) here gets a little new In at times, but they have coins in their cases since opening, 4 years ago.

ricko · December 31, 2013 11:13PM

It seems the normal rules of business do not apply to coin dealers....I have watched coins languish in inventories for many years...Cheers, RickO

BillJones · December 31, 2013 11:38PM

Too long is when it sets in your case show after show and nobody even asks to look at it.

TwoSides2aCoin · December 31, 2013 11:40PM

<< Too long is when it sets in your case show after show and nobody even asks to look at it.

>>

Shucks…

… Here I thought that was "museum" quality.

EastonCollection · January 1, 2014 12:29AM

Based on several business studies, inventory turnover on a whole should turn over about 5 times a year. Which means, if your average monthly inventory levels are $100k then your yearly sales should be $500,000. Those businesses that can achieve that type of turnover, then your buying and selling right. I suspect that most dealers don't achieve inventory turnover 5xs. When we go to shows or a B&M shop, we tend to see inexpensive coins sitting for long periods of time. I really enjoy seeing a dealer that is able to turnover inventory frequently to see whats new. Those dealers probably are doing financially better than most. Other factors include gross margins and operating expenses as well. But focusing on inventory turnover is a very critical factor for all businesses that carry inventory.

tradedollarnut · January 1, 2014 12:45AM

<< Based on several business studies, inventory turnover on a whole should turn over about 5 times a year. Which means, if your average monthly inventory levels are $100k then your yearly sales should be $500,000. Those businesses that can achieve that type of turnover, then your buying and selling right. I suspect that most dealers don't achieve inventory turnover 5xs. When we go to shows or a B&M shop, we tend to see inexpensive coins sitting for long periods of time. I really enjoy seeing a dealer that is able to turnover inventory frequently to see whats new. Those dealers probably are doing financially better than most. Other factors include gross margins and operating expenses as well. But focusing on inventory turnover is a very critical factor for all businesses that carry inventory. >>

Rare coins in a rising market do not follow inventory turns models. Why sell something quickly if it's extremely popular and it costs you more to replace it? Stick your price on it and wait for the right buyer.

TwoSides2aCoin · January 1, 2014 12:52AM

That's a great point, Easton. Every year, I know when I didn't order enough from the Mint. For instance: 2012 Silver Proof Sets. They sold quick. Now dealers are calling me looking for them and they went from $65 to $190 in just a year. Who can know WHAT to buy ? Anyone want to sell ? And we are talking moderns. It usually sits around for years.

coin4sale · January 1, 2014 1:05AM

you move the 2x2 or coin holder and there is a dust shadow outline where the coin was laying!

who's been there?

Jcarney · January 1, 2014 1:10AM

<< It seems the normal rules of business do not apply to coin dealers....I have watched coins languish in inventories for many years...Cheers, RickO >>

The normal rules of business apply to everyone in business. Languishing coins are a problem whether recognized or not.

ColonelJessup · January 1, 2014 1:11AM

As sad as it may be to sing "Happy Birthday" to a coin, it's downright pathetic the next year, when it sings it back. .

CoinZip · January 1, 2014 3:33AM

I guess I just look at things differently..... to me there is no too long.

stman · January 1, 2014 3:36AM

<< As sad as it may be to sing "Happy Birthday" to a coin, it's downright pathetic the next year, when it sings it back. .

>>

OldEastside · January 1, 2014 3:39AM

Too long is when it leaves a faded shadow where it sat in your showcase

Steve

Unknown · January 1, 2014 3:40AM

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TwoSides2aCoin · January 1, 2014 3:41AM

Too long is when it starts toning in the album and a dealer has to take them out and dip them.

EastonCollection · January 1, 2014 5:24AM

TDN - assume that a dealers gross margin is 20% and that dealer can turn inventory 5 times in the year, then carrying a $100k inventory the gross margin is $100k based on $500k of sales. Thats true even in rising prices. If prices are rising and you hold on to inventory and make 30% margin, then you will need to have inventory turnover at least 3.6 times a year to make the same gross margin. I believe its much harder to sell a coin at a 30% margin than a 20% margin for the majority of coins. There are exceptions to the 5x rule, but those coins should be on an exception basis.

tahoe98 · January 1, 2014 5:33AM

<< you move the 2x2 or coin holder and there is a dust shadow outline where the coin was laying!

who's been there? >>

...

abitofthisabitofthat · January 1, 2014 5:37AM

<< TDN - assume that a dealers gross margin is 20% and that dealer can turn inventory 5 times in the year, then carrying a $100k inventory the gross margin is $100k based on $500k of sales. Thats true even in rising prices. If prices are rising and you hold on to inventory and make 30% margin, then you will need to have inventory turnover at least 3.6 times a year to make the same gross margin. I believe its much harder to sell a coin at a 30% margin than a 20% margin for the majority of coins. There are exceptions to the 5x rule, but those coins should be on an exception basis. >>

Applying a 'business rule' to all situations is not such a good idea. Some coins I already have sold before I buy them, and I know that they will be in inventory less than 1 day (more than half my business, BTW). Other coins are esoteric, and I know that they will probably sit around for a long time looking for the right buyer. I understand my business quite well. I have no need of a generic inventory turns 'rule of thumb' to manage by. Either a quick turnover, or a high margin. Either works fine for a profitable business. A healthy mix of both is fine, too. Margins range from 1% to over 100%. Yes - I do work on 1% margins on some generics. Yes - when I cherrypick a rare variety I expect to double up or better...eventually.

2ndCharter · January 1, 2014 5:39AM

Back in 2010, a well known dealer (PNG member) and I locked horns over a lot in a Stacks auction - I drove him well past full retail and he still outbid me. He then marked it up another 50% and it's been languishing in his case at every show since then.

MrEureka · January 1, 2014 5:56AM

If I buy a pattern, I know that I'm going to have to hold it, on average, for about six months. Yes, some will sell immediately, but others will take years. It's the nature of that particular market - highly illiquid - and my choice as to how I run my business.

On the other hand, if I buy a generic Saint Gaudens $20, it's going to be gone within two weeks, win lose or draw. Again, nature of the market - this time, highly liquid - and my choice as to how to run my business.

FWIW, I don't even think about my average turnover rate. I only think about individual coins, and what needs to be done with each one.