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A growing problem with buying coins....

Something I have noticed in buying coins is there is a growing problem in the exit strategy.

It seems auction houses want more of the proceeds on the sales of auctions than ever before. Sure you can sell many coins on ebay for far less in fees but for any major collection this represents an issue.

The auction houses are getting very aggressive. I wonder if perhaps the lack of competition is very bad for collectors both as buyers and seller.

In an investment of ANY nature where the exit costs are this great one has to really ask if this is good space to place money for future benefit? This realization comes at a time when a flood of quality material is coming to market. Is this a place to put investment money where even if you get an increase in value the future costs of sale may be more than increase in valuation.
I seldom check PM's but do check emails often jason@seated.org

Buying top quality Seated Dimes in Gem BU and Proof.

Buying great coins - monster eye appeal only.
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Comments

  • AnkurJAnkurJ Posts: 11,370 ✭✭✭✭
    Many high value coins sell in very small networks unknown to us and unseen to auction houses. I would not judge what you see in auctions to be the majority of major coin transactions.
    In regards to great material coming out, just like everything else, the coin market moves in cycles. For a long time you see very little decent coins, and all of a sudden many old time collectors have decided its time to sell.
    All coins kept in bank vaults.
    PCGS Registries
    Box of 20
    SeaEagleCoins: 11/14/54-4/5/12. Miss you Larry!
  • BaronVonBaughBaronVonBaugh Posts: 1,837 ✭✭✭✭


    << <i>Something I have noticed in buying coins is there is a growing problem in the exit strategy.

    It seems auction houses want more of the proceeds on the sales of auctions than ever before. Sure you can sell many coins on ebay for far less in fees but for any major collection this represents an issue.

    The auction houses are getting very aggressive. I wonder if perhaps the lack of competition is very bad for collectors both as buyers and seller.

    In an investment of ANY nature where the exit costs are this great one has to really ask if this is good space to place money for future benefit? This realization comes at a time when a flood of quality material is coming to market. Is this a place to put investment money where even if you get an increase in value the future costs of sale may be more than increase in valuation. >>



    Coin collecting is a terrible place for investors! Please sell off all your investments. That way the real collectors may be able to afford a few things.
    image
  • CoinJunkieCoinJunkie Posts: 8,772 ✭✭✭✭✭


    << <i>Many high value coins sell in very small networks unknown to us and unseen to auction houses. I would not judge what you see in auctions to be the majority of major coin transactions. >>


    Nobody has hard data on this, but my gut says you are dead wrong with your second assertion.
    Regardless, the "very small networks unknown to us" don't do the average coin buyer a whit of good when it's time to sell.
  • In the future it might behoove us to create a collector network that allows people to trade or buy each others coins - not like the BST or eBay but rather a spread sheet listing coins by series, dates and mint marks - both from sellers and buyers. Collector's Universe comes close for the selling part but only from dealers. It would be interesting if anyone could post a want list or a sell/trade list that everyone could see. With auction costs going up the seller gets less of the buyer is willing to pay.
    Except for the cost of the website and maintenance the exchanges would be fee free. Obviously there would be the devil in the details but the network could be huge and draw in the entire range of collectors. Right now there is a lot of hunting that goes on looking at a lot of websites, not all navigated the same way. Just a thought
    In the land of the blind the one-eyed man is king.
  • rheddenrhedden Posts: 6,632 ✭✭✭✭✭
    I think it is fair to say that auction houses get the majority of business when a collector passes on, and his/her estate passes into the hands of heirs who have no idea where to start selling the coins. On the other hand, some advanced collectors such as myself are going to sell exactly zero of their unwanted coins in any venue that has a 17.5% buyer's fee on top of a consignor's fee. I wouldn't sell a mutual fund that way, nor a Seated half. With eBay fees at all-time highs, I stopped selling coins that way, too. Heck, I can consign to a dealer who is happy to do the work in exchange for a consignment fee that is still less than what ebay wants, with all its associated headaches.

    Overall, the OP makes a great point, though things are still not as bad as the 1980s. Back then, even your gold-stickered, PQ, DMPL, + graded, monster toners would have likely been offered "20% back of bluesheet" by the B&M store in your town, which was frequently the only option for selling.



  • jdimmickjdimmick Posts: 9,779 ✭✭✭✭✭
    Ive considered this the past year or so. I buy coins (for my personal collection) because I enjoy owning some of them, and even though its nice to make a profit on them down the road , I truly hope to just be able too break even. However, that has stopped me from buying a couple of bigger coins because I know the only way I can get rid of them is to place them with a big auction house.

    One example that comes to mind is a seated key I have looked at: cost too buy is 50k, which is a stretch IMO price wise just to aquire it, but then I know down the road even if it brings(total price) close to what I paid, the auction house pulls at least 15%, now more closer to 20% of that money which leaves me with a $7500 -$ 10000 loss.

    jim

  • TahoeDaleTahoeDale Posts: 1,785 ✭✭✭
    I join the large group( and getting larger) of collectors who are not consigning coins to auctions. While I was an avid fan of
    Heritage and ANR, even Stacks on a few occasions, today I do not consign.

    I deal with collectors of the same series, or memo to well known dealers. Any business I have with the auction firms is buying coins that
    fall through the crack. I have missed many nicer coins, but I refuse to pay well over market, plus 17 1/2 %. I agree it would be difficult to come out with any profit,
    and a loss might be more likely.

    The pendulum may be swinging back to the dealers, and away from the auction companies.
    TahoeDale
  • jdimmickjdimmick Posts: 9,779 ✭✭✭✭✭
    To add to Tahoe Dale commentary, I believe this may happen as well.

    On coins that are not too expensive, I have found that a few dealers who specialize in a specific series can often buy the coin outright for better price than going to auction. However , some of them may be a little reluctant to inventory higher dollar pieces, but may offer you some type of consignment option where they don't have their funds tied up in the process. And even though it may take a little time for this process from consignment to sale, its really not any longer than consigning coins to auction because of the coins having to be sent so far ahead in advance.
  • barberkeysbarberkeys Posts: 4,156 ✭✭✭✭✭
    I've found that it's much easier to sell a nice original coin, than it is to buy (find) one. But I'm not talking about any of the millions of common Morgans, Walkers, Mercs, Saints, etc out there, regardless of how high the grade on the slab is.

    Still, it's too bad there isn't a selling mechanism available like ebay used to be.
    Vern
    l
    It's not having what you want, it's wanting what you've got.
  • mrearlygoldmrearlygold Posts: 17,858 ✭✭✭
    what are we going to do when the vigorish is 30% ?
  • AnkurJAnkurJ Posts: 11,370 ✭✭✭✭


    << <i>what are we going to do when the vigorish is 30% ? >>



    Reduce our bids by 30% or stop buying from that auction completely. If collectors are patient and work with a few dealers, they should be able to obtain the coins they desire.
    All coins kept in bank vaults.
    PCGS Registries
    Box of 20
    SeaEagleCoins: 11/14/54-4/5/12. Miss you Larry!
  • BoosibriBoosibri Posts: 12,400 ✭✭✭✭✭
    I don't think that the effective "tax" at the auction houses is equal to to nominal rates in which are published.

    Regardless as fees and rates effectively rise this will create opportunities for private dealers and other business models. So long as the hobby is strong fundamentally, the market will adapt to seize opportunities caused by the major auction houses crossing key price points. The question is then: Will the rising auction house rates undermine the collector base?
  • Cougar1978Cougar1978 Posts: 8,770 ✭✭✭✭✭
    I believe if one has that sizeable an investment they have the means to take a table at a show.
    Investor
  • BAJJERFANBAJJERFAN Posts: 31,304 ✭✭✭✭✭


    << <i>In the future it might behoove us to create a collector network that allows people to trade or buy each others coins - not like the BST or eBay but rather a spread sheet listing coins by series, dates and mint marks - both from sellers and buyers. Collector's Universe comes close for the selling part but only from dealers. It would be interesting if anyone could post a want list or a sell/trade list that everyone could see. With auction costs going up the seller gets less of the buyer is willing to pay.
    Except for the cost of the website and maintenance the exchanges would be fee free. Obviously there would be the devil in the details but the network could be huge and draw in the entire range of collectors. Right now there is a lot of hunting that goes on looking at a lot of websites, not all navigated the same way. Just a thought >>



    THIS!

    I bemoaned the fact more than once that despite the internet, collectors really have no effective means of connecting with other collectors on a nationwide basis.
    theknowitalltroll;
  • SaorAlbaSaorAlba Posts: 7,593 ✭✭✭✭✭
    I bought a coin on GreatCollections and paid the buyers fee of 10% vs. the usual 20% at Heritage, Stacks etc.
    Tir nam beann, nan gleann, s'nan gaisgeach ~ Saorstat Albanaich a nis!
  • TwoSides2aCoinTwoSides2aCoin Posts: 44,591 ✭✭✭✭✭
    I see a growing problem with the collector's mindset when PROFIT is the basis of "collecting" in a hobby that was always known to cost more than face value. Where is there a good investment in paying more for something less ? Only when the eye is sharper than the pencil.
  • TomBTomB Posts: 22,077 ✭✭✭✭✭
    Interestingly, I view the current climate somewhat differently in that I think today's collectors have it in many ways easier to sell coins and/or to sell coins for a higher percentage of retained price or value due to the internet. Today one may sit at a computer and in an afternoon look at hundreds, if not more, of dealer inventories. Many of these have written descriptions and/or quality photography associated with the coins. These listings reach nearly every corner of the coin marketplace, which is something that would not have been possible in the past. The use of email or phone listings makes communication nearly instantaneous and with so many venues (ebay, traditional auction houses, BST, a plethora of dealers) the options for both buying and selling are limited largely by the imagination and commitment of the seller.
    Thomas Bush Numismatics & Numismatic Photography

    In honor of the memory of Cpl. Michael E. Thompson

    image
  • BoosibriBoosibri Posts: 12,400 ✭✭✭✭✭


    << <i>I bought a coin on GreatCollections and paid the buyers fee of 10% vs. the usual 20% at Heritage, Stacks etc. >>



    Don't you mean the seller paid 10%?
  • BAJJERFANBAJJERFAN Posts: 31,304 ✭✭✭✭✭


    << <i>

    << <i>I bought a coin on GreatCollections and paid the buyers fee of 10% vs. the usual 20% at Heritage, Stacks etc. >>



    Don't you mean the seller paid 10%? >>



    Only if, in fact, the buyer got the coin for some standard price guide amount. If there is a coin with a PG of $400 and the consignor nets that amount then the buyer has in effect paid the seller's fees. If the seller nets $350 then he/she has absorbed the fees. In order for the seller to net $400, the buyer would have to have paid somewhere around $450. The big snag for sellers/collectors is being able to connect directly with the person willing to pay the $450 without going thru auctions or dealers.
    theknowitalltroll;
  • This content has been removed.
  • BoosibriBoosibri Posts: 12,400 ✭✭✭✭✭


    << <i>

    << <i>

    << <i>I bought a coin on GreatCollections and paid the buyers fee of 10% vs. the usual 20% at Heritage, Stacks etc. >>



    Don't you mean the seller paid 10%? >>



    Only if, in fact, the buyer got the coin for some standard price guide amount. If there is a coin with a PG of $400 and the consignor nets that amount then the buyer has in effect paid the seller's fees. If the seller nets $350 then he/she has absorbed the fees. In order for the seller to net $400, the buyer would have to have paid somewhere around $450. The big snag for sellers/collectors is being able to connect directly with the person willing to pay the $450 without going thru auctions or dealers. >>



    I disagree. I do not care as a buyer what the seller nets. I care about what I am willing to pay for the coin. 90% BP, 0% BP, my bid doesn't change. The buyer is agnostic to the BP until he becomes the seller at which point it becomes relevant.
  • BoosibriBoosibri Posts: 12,400 ✭✭✭✭✭


    << <i>17.5% apparently seems to be justified since most are willing to pay the new inflated auction price that includes it. And 15% worked before just as a lower % worked before that. when we all stop buying at auctions then Auction houses will have to adjust downward and only then....yah think lower interest rates and the fact that despite the gov't denial of any real inflation might have something to do with this willingness to pay 17.5% ? I mean do you really think Auction houses are doing anything remotely worth such a high percentage other than giving an outlet for buyers to seek out sellers. Real estate agents charge 6% makes and it has been that way for 50 years or so and they do much much more in relation to enabling a willing buyer and a willing seller to get together. >>



    I doubt that the effective price increase was 2.5%, more like 0.5% - 1.0% after deal backs.
  • TwoSides2aCoinTwoSides2aCoin Posts: 44,591 ✭✭✭✭✭
    I see growth opportunities when there's meat on a bone, panic at home, and blood in the streets.
  • BAJJERFANBAJJERFAN Posts: 31,304 ✭✭✭✭✭


    << <i>

    << <i>

    << <i>

    << <i>I bought a coin on GreatCollections and paid the buyers fee of 10% vs. the usual 20% at Heritage, Stacks etc. >>



    Don't you mean the seller paid 10%? >>



    Only if, in fact, the buyer got the coin for some standard price guide amount. If there is a coin with a PG of $400 and the consignor nets that amount then the buyer has in effect paid the seller's fees. If the seller nets $350 then he/she has absorbed the fees. In order for the seller to net $400, the buyer would have to have paid somewhere around $450. The big snag for sellers/collectors is being able to connect directly with the person willing to pay the $450 without going thru auctions or dealers. >>



    I disagree. I do not care as a buyer what the seller nets. I care about what I am willing to pay for the coin. 90% BP, 0% BP, my bid doesn't change. The buyer is agnostic to the BP until he becomes the seller at which point it becomes relevant. >>



    It's a semantic thing really. Of course the seller pays the fees. The real issue as I pointed out is that many sellers are sorta forced to use some sort of fee/commish based venue to get their stuff sold. In my earlier example, I'd have been happier than a pig in a new mudhole if I could have sold it direct to you for $425 and we both could have come out a little more ahead.
    theknowitalltroll;
  • dbcoindbcoin Posts: 2,200 ✭✭
    CLCT has experimented on the card side of the house with letting collectors list cards on CollectorsCorner, the same way dealers do now. The fees are even lower than Ebay and you are dealing with known sellers. I think they may have plans to bring that to the coin side of the house as well at some point.
  • mustangmanbobmustangmanbob Posts: 1,890 ✭✭✭✭✭
    It is not just coins.

    My mom has moved to senior living, and is trying to sell all the stuff she can't take with her. Several estate sale type groups have reviewed the stuff, and they take 40% of sales, and then try to tack on fees at the end. For example, Anything that does not sell, will be take away for consignment, but there is a $500 packing and moving charge.
  • MGLICKERMGLICKER Posts: 7,995 ✭✭✭


    << <i> The big snag for sellers/collectors is being able to connect directly with the person willing to pay the $450 without going thru auctions or dealers. >>



    Ebay served that purpose quite well as collector to collector transactions were the norm.

    As fees jumped from 2% to 10%* the efficiency of that marketplace has been lost.


    *fees are of course all over the place when discounts and stores are included. Frankly just more clutter to conducting commerce.
  • mercurydimeguymercurydimeguy Posts: 4,625 ✭✭✭✭
    The system doesn't work exactly as you have described it.

    While there is 17.5% vigorish, sellers negotiate to get more than hammer. For example, depending on the deal you get and terms, you can get more than 100% hammer price...so they don't get 17.5%, that's just a facade. You can also bid on/buy your own coins back and you get a different deal for that.

    The latter is one reason why I remain cautious in using auction prices to establish value. I know for a fact some people auction coins that no one really wins so they drive up value, amd then they sell it for a higher price based on "previous hammer" LOL image

    Anyhow, it's not totally like they get 17.5% ... Often it's less.

    And shill bidding is even more rampid than eBay...you just have no visibility to it. At least on eBay it's easy to spot.
  • LindeDadLindeDad Posts: 18,766 ✭✭✭✭✭
    Since Heritage went to 17.5% I only bid on eBay.image
  • I've stopped buying coins, and I love them, because I don't know about their "investment" potential. I have bought and sold antiques all my life and generally make some money when I sell them. With coins however I don't find the good buys that I can find in other fields, when I bought a top quality coin, I usually had to pay top price for it. I have sold quite a few the last three years and have lost on many of them, on a few I took big hits, but for the most part the loss was small, offset by a few money makers. I was more active here on the boards then, and a good many I just listed here at a price near what I paid, most of them sold immediately.
    Buy coins because you enjoy them and maybe because they help you diversify your assets. If you buy right and hold them long enough you may make some money, but don't count on it.
  • alefzeroalefzero Posts: 1,071 ✭✭✭✭✭
    Mowgli - I have been doing just that, setting up a fee-free exchange. Initially, it will be principally for Morgan and Peace dollars (by VAMs), but might evolve. There indeed are devils in the details. Buyers and sellers will need to be classified according to reliability. Another nice side benefit for VAMs, if used extensively for them, is maintaining a dynamic price reference guice.
  • FredWeinbergFredWeinberg Posts: 5,925 ✭✭✭✭✭
    OK
    Retired Collector & Dealer in Major Mint Error Coins & Currency since the 1960's.Co-Author of Whitman's "100 Greatest U.S. Mint Error Coins", and the Error Coin Encyclopedia, Vols., III & IV. Retired Authenticator for Major Mint Errors for PCGS. A 50+ Year PNG Member.A full-time numismatist since 1972, retired in 2022.
  • gsa1fangsa1fan Posts: 5,566 ✭✭✭
    I may have missed something. I thought the auction house only was paid the juice? You get 100% of bid for your coin? Do I have to give auction house a percent of bid total too?
    Avid collector of GSA's.
  • alefzeroalefzero Posts: 1,071 ✭✭✭✭✭
    Every auction house and consignment itself can be different. Some will charge a seller's fee and even a buyback fee for unsold lots with reserves. If you have an consignment that will anchor a major sale, certain accommodations can be made, from splitting the buyer's fees on your lots to just about anything that can be bargained. Regardless, if there is a buyer's fee, the 100% of the bid is generally reduced by the bidders to account for the auction house tax.
  • DennisHDennisH Posts: 14,010 ✭✭✭✭✭
    Standard seller's fee at Heritage is 10% of hammer price. Some large sellers, however, are able to negotiate less or none, and I've heard of many instances where they receive part of the 17.5% buyer's fee.

    Like everything else in free enterprise, things are fluid.
    When in doubt, don't.
  • OverdateOverdate Posts: 7,157 ✭✭✭✭✭
    How long would a supermarket stay in business if it began charging its customers a fee for the privilege of purchasing food there?

    I think a "buyer's fee" is just a gimmick to make the price appear lower than what you actually pay. It would disappear overnight if clients began refusing to put up with it. I won't deal with any business that levies a buyer's fee, even if that fee is only 0.0000001%.

    Gimme my discount! image

    My Adolph A. Weinman signature :)

  • illini420illini420 Posts: 11,466 ✭✭✭✭✭
    I don't mind if the big auction companies keep getting greedy by raising their fees more and more, just makes it a much easier decision for collectors to skip the major auction houses altogether and either sell directly to collectors themselves or consign with dealers they know. Very few coins out there need the marketing that comes with the big auction; pretty much only the six and seven figure coins seem to really benefit from that sort of exposure.

    Edited to add some numbers to the discussion. If I were to sell a $25k or so coin through eBay for a client... the total cost to the client (eBay fees + my fees) would be approximately 6% (would be around 8% if buyer uses PayPal instead of a wire transfer).
  • BAJJERFANBAJJERFAN Posts: 31,304 ✭✭✭✭✭


    << <i>I may have missed something. I thought the auction house only was paid the juice? You get 100% of bid for your coin? Do I have to give auction house a percent of bid total too? >>




    There is a consignment commission fee also. So you pay a commish fee and the juice. How much depends on your clout and consignment size.
    theknowitalltroll;
  • BAJJERFANBAJJERFAN Posts: 31,304 ✭✭✭✭✭


    << <i>I don't mind if the big auction companies keep getting greedy by raising their fees more and more, just makes it a much easier decision for collectors to skip the major auction houses altogether and either sell directly to collectors themselves or consign with dealers they know. Very few coins out there need the marketing that comes with the big auction; pretty much only the six and seven figure coins seem to really benefit from that sort of exposure.

    Edited to add some numbers to the discussion. If I were to sell a $25k or so coin through eBay for a client... the total cost to the client (eBay fees + my fees) would be approximately 6% (would be around 8% if buyer uses PayPal instead of a wire transfer). >>



    Are eBay sellers still not allowed to let buyers now that they can pay by means other than PP?
    theknowitalltroll;
  • DollarAfterDollarDollarAfterDollar Posts: 3,215 ✭✭✭✭✭
    Simply a matter of Supply and Demand. You supply the auction houses with higher quality coins, and they demand 17 1/2% to sell them. Now on the other hand if folks refused to send the coins for a 17 1/2 % rake and starved the auction houses out for a year or 2, the worm turns and lower juice is demanded or they can sell Necco candies instead.
    If you do what you always did, you get what you always got.
  • HandHHandH Posts: 438 ✭✭✭


    << <i>How long would a supermarket stay in business if it began charging its customers a fee for the privilege of purchasing food there?

    They do and will for the foreseeable future. It's called markup.

    US Civil War coinage
    Historical Medals

  • OverdateOverdate Posts: 7,157 ✭✭✭✭✭


    << <i>How long would a supermarket stay in business if it began charging its customers a fee for the privilege of purchasing food there?

    They do and will for the foreseeable future. It's called markup. >>


    Okay, to be more precise: How long would a supermarket stay in business if it began tacking on a "buyer's fee" to the stated prices of the items they sell?

    (Sales taxes don't count - they are collected by businesses for the state, are legally unavoidable, and everybody already knows about them.)

    My Adolph A. Weinman signature :)



  • << <i>

    << <i>How long would a supermarket stay in business if it began charging its customers a fee for the privilege of purchasing food there?

    They do and will for the foreseeable future. It's called markup. >>


    Okay, to be more precise: How long would a supermarket stay in business if it began tacking on a "buyer's fee" to the stated prices of the items they sell?

    (Sales taxes don't count - they are collected by businesses for the state, are legally unavoidable, and everybody already knows about them.) >>



    As long as now one else is selling for less then forever.
  • CoinJunkieCoinJunkie Posts: 8,772 ✭✭✭✭✭


    << <i>(Sales taxes don't count - they are collected by businesses for the state, are legally unavoidable, and everybody already knows about them.) >>


    Everyone knows about buyer's fees, as well. FYI, in Europe the marked price of a grocery item
    includes the tax. When Europeans move here, they are usually annoyed to find out that the
    marked price is not what they end up paying. But they don't stop buying groceries.

    I'm not sure I see your point.
  • ARCOARCO Posts: 4,431 ✭✭✭✭✭


    << <i>Something I have noticed in buying coins is there is a growing problem in the exit strategy.

    It seems auction houses want more of the proceeds on the sales of auctions than ever before. Sure you can sell many coins on ebay for far less in fees but for any major collection this represents an issue.

    The auction houses are getting very aggressive. I wonder if perhaps the lack of competition is very bad for collectors both as buyers and seller.

    In an investment of ANY nature where the exit costs are this great one has to really ask if this is good space to place money for future benefit? This realization comes at a time when a flood of quality material is coming to market. Is this a place to put investment money where even if you get an increase in value the future costs of sale may be more than increase in valuation. >>

    Yes, The exit strategy is becoming very costly for short term transactions. Buying/flipping is a losing proposition financially for most buyers IMO.

    I have personally discovered that I lose on almost every sale I have made given the seller's fees charged by auction houses / ebay and the now almost totally constant fixed price sales (no true auctions) by sellers. Such wasn't the case five years back, but it is so today.

    The absolute biggest detriment to continue collecting for me personally is the lack of a feasible economic platform to sell my coins. There are no true auction houses now except for Heritage...none. But with a 18% buyers fee, that equates to about 3-5 years of pre-paying future gains (you gotta hold 3-5 years just to break even.

    Tyler

  • bestdaybestday Posts: 4,242 ✭✭✭✭


    << <i>what are we going to do when the vigorish is 30% ? >>



    if you selling to a B%M .. you are already getting 20-30 % less of bid..


  • << <i>

    << <i>How long would a supermarket stay in business if it began charging its customers a fee for the privilege of purchasing food there?

    They do and will for the foreseeable future. It's called markup. >>


    Okay, to be more precise: How long would a supermarket stay in business if it began tacking on a "buyer's fee" to the stated prices of the items they sell?

    (Sales taxes don't count - they are collected by businesses for the state, are legally unavoidable, and everybody already knows about them.) >>



    Of course the supermarkets are'nt scratching around for other peoples goods to sell, they buy a product, and markup what they think the market will bear for a product the consumer needs. Very different business model at an auction house.
  • The most important thing for auction houses is to get the good consignments. In order to do this, they started offering the consignors lower seller's fees, until it got to zero (i.e. seller gets 100% of hammer). When the buyer's fees were 10%, this immediately squeezed their margins, so they raised the buyer's fee to 15% to compensate. Once it was at 15%, that competition for the best consignments began to lead some of them to offer sellers MORE than 100% of hammer. E.g. 102%, 105%, 106% etc. Once the consignors sensed they could get more than 100%, they would shop it around between auction houses. So then it became an expectation for the biggest/best consignments, and the auction houses couldn't backtrack on that, in order to stay competitive and get the consignments. At the same time, more and more expensive technology has come into the auction process, with live internet bidding etc. So with the margins getting squeezed once again, and new costs associated with new technologies, they pushed to 17.5%.

    That is an explanation of what happened, but it doesn't mean I support it. I was annoyed to death when I came back to coins this year (after a 5 year absence), only to discover the 17.5% fees being charged by the major auction houses. If I ran an auction house today, I think I would cut it back to 10%, and cut the seller's share back to 100% or less, in order to differentiate myself. Well, that's what Great Collections is doing, but they of course don't have all the same catalog and physical venue costs associated with traditional auctions. Nonetheless, if there were free-market competition, one would think this trend would break, and they wouldn't ALL end up at 17.5%.

    I remember the 10% fees of the 1990's and before, and I was very annoyed when it went to 15%. I do however appreciate the greatly improved printed and internet-based catalogs of today, which are vastly superior to what we had for decades before the 1990's.

    One question to contemplate - what would happen to auction rates if we entered a serious bear market in coins again, such as 1990-1998? Another thought: the top dealers know the market as well as anyone, and you won't be getting any "bargains" as vs. auction. And even at today's elevated auction prices, savvy intermediaries (I won't name names) go to these auctions, buy coins at high prices (outbidding the collectors), mark them up, and STILL manage to sell them. Lately a trend I see is NGC coins bought at auction by pros, then DOWNGRADED to PCGS holders, and then sold for MORE to collectors. (That doesn't speak too well for NGC in some areas of the market.)

    One of my rules: ***if you outbid me on the auction floor, I will NOT buy the coin from you later for more money.***

    Best,
    Sunnywood
  • seateddimeseateddime Posts: 6,180 ✭✭✭
    I always will collect coin for the love of the hobby but where I see a problem is as any rational financial investment.

    That means I see good deals but now I pass on them. I factor a loss into what I buy and keep. I buy planning to lose money.

    I have already began to sell of chunks of what is not my core collection and leave the profit side to those who are better positioned that I to sell them.

    This thinking actually hurts auction results because as a bidder, even if I lose I was pushing up prices for years. Now I don't bid. This means the sellers get less. The auction houses get less and the coins seller cheaper. The sellers lose, the auction houses lose and the new buyers pay less.

    If others feel the same way then at time when there are some many great coins coming to market money that would have flowed from other investments to coins will stay in those other investments. In some thin markets this could be the difference between strong results and upward movements in price guides to weaker results and downward prices in price guides.

    This worries me to where some collecting objectives have taken a noticeable detour.
    I seldom check PM's but do check emails often jason@seated.org

    Buying top quality Seated Dimes in Gem BU and Proof.

    Buying great coins - monster eye appeal only.
  • AMRCAMRC Posts: 4,280 ✭✭✭✭✭
    It is all relative. When you compare coins to other collectibles, I believe we are all better off in this hobby than most others in terms of markets and liquidation options.
    MLAeBayNumismatics: "The greatest hobby in the world!"

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