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Does High Overhead Retailing Create a Legitimate Value?
Coinosaurus
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Another thread asks about the coin business on TV, and we are all familiar with the Littleton business model.
These are retailers are spend a lot to market to the masses and in return have to charge higher prices.
Because we all have some level of inside knowledge here, it is easy to perceive this business model as a consumer ripoff. But is it really?
Think about it like this - suppose you have a gallon of gas to sell. Should you sell it in Hawaii or in Louisiana? You can get more money in Hawaii but it will cost more to put it there. Is it therefore unethical to sell gas in Hawaii?
Same thing with a coin - you can sell to a buyer at a coin show - said buyer has invested time and money to be at the coin show and expects a lower price. Or you can sell to masses - but it will cost you more to find a buyer. Why is that wrong? Should coins only be accessible to those who have spent time to understand the market? Should ethical dealers demand that a buyer demonstrate some knowledge of the market before buying anything?
These are retailers are spend a lot to market to the masses and in return have to charge higher prices.
Because we all have some level of inside knowledge here, it is easy to perceive this business model as a consumer ripoff. But is it really?
Think about it like this - suppose you have a gallon of gas to sell. Should you sell it in Hawaii or in Louisiana? You can get more money in Hawaii but it will cost more to put it there. Is it therefore unethical to sell gas in Hawaii?
Same thing with a coin - you can sell to a buyer at a coin show - said buyer has invested time and money to be at the coin show and expects a lower price. Or you can sell to masses - but it will cost you more to find a buyer. Why is that wrong? Should coins only be accessible to those who have spent time to understand the market? Should ethical dealers demand that a buyer demonstrate some knowledge of the market before buying anything?
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I still view the things you mention as rip offs because of one important reason. Those people that buy
the coins will either sell them or their heirs will sell them. When it is found out that the prices paid
are so outlandish that they can only get a fraction of that back, if that, then they clearly paid way too
much and were ripped off. Even if the people had some perceived level of joy from ownership
over the years, that quickly disappears when they realized what an idiot they were and how bad they
were ripped off at the time they try to sell.
Looking for Top Pop Mercury Dime Varieties & High Grade Mercury Dime Toners.
<< <i>Another thread asks about the coin business on TV, and we are all familiar with the Littleton business model.
These are retailers are spend a lot to market to the masses and in return have to charge higher prices.
Because we all have some level of inside knowledge here, it is easy to perceive this business model as a consumer ripoff. But is it really?
Think about it like this - suppose you have a gallon of gas to sell. Should you sell it in Hawaii or in Louisiana? You can get more money in Hawaii but it will cost more to put it there. Is it therefore unethical to sell gas in Hawaii?
Same thing with a coin - you can sell to a buyer at a coin show - said buyer has invested time and money to be at the coin show and expects a lower price. Or you can sell to masses - but it will cost you more to find a buyer. Why is that wrong? Should coins only be accessible to those who have spent time to understand the market? Should ethical dealers demand that a buyer demonstrate some knowledge of the market before buying anything? >>
Should it be required that all drivers know how a car operates in order to buy that gallon of gas? Gas is universal and is needed everywhere. You charge what the market will bear. Coins are optional, but are easier to sell in some places than others.
RMR: 'Wer, wenn ich schriee, hörte mich denn aus der Engel Ordnungen?'
CJ: 'No one!' [Ain't no angels in the coin biz]
For example, whenever there is an auction advertised, I'm sure the ads here connect with interested buyers who help drive up prices providing value for buyers (they can find what they want) and value for sellers (more buyers).
Oh I forgot to mention it's PCGS graded as AU58.
Now what sets it's value.
If you don't like the comparison of coins to gasoline, let's use jewelry instead.
You can buy jewelry from Tiffany's or a big department store or a local jewelry store or a goldsmith/silversmith or you can go to 47th Street in NYC.
You can pay a significantly different price for what is pretty much the same thing - all depending on what kind of shopping experience you want to have.
I'd bet that someone who is "in the trade" will shop for jewelry in a very different manner from how I do it. (And, I'm OK with that. I like to look at gems, but I don't want to spend hours and hours shopping for a necklace - I'd rather spend hours and hours shopping for a coin!)
Check out the Southern Gold Society
What kind of coin collector are you?
I know - one who's still married!
Check out the Southern Gold Society
It's not that simple.
For example, if a neophyte walks into a gift shop and buy a dateless buffalo nickel for $5, no problem.
If your brother tells you he wants to invest $5000 in coins and you sell him 1000 dateless buffalos at $5 a pop, big problem.
As for the OP, of course the retailer is providing a service, and of course he's entitled to try to make a profit. He's just not entitled to misrepresent the coin, its resale value or anything else.
Doggedly collecting coins of the Central American Republic.
Visit the Society of US Pattern Collectors at USPatterns.com.
For buyer's it has always been Cavet Emptor.
For those who don't get it, P. T. Barnum observed there is a sucker born every minute.
If one were the sort of person who would do that to a brother, I'd say that the problem (and its source) are way, way outside the bounds of numismatics!
Check out the Southern Gold Society
Most people know that retailers have to cover their overhead and make a profit.
Most people know that the Internet exists and can be used for price comparisons.
Most people know that competition exists, and that soliciting multiple offers can lead to receiving a higher price for their coins, or paying a lower price to obtain coins for their collections.
Most people are aware that the more they know about an item, coin or otherwise, the less likely they are to be ripped off.
Anyone who is willing to invest a little time and effort can obtain at least a rough idea of what grandpa’s coin collection is worth, or what the going price is for a coin he or she wishes to acquire.
Compared to 20 years ago, consumers have way more resources at their disposal to learn about items they are interested in buying or selling, and avoid getting ripped off. The marketplace is still far from being fair, but the playing field is much more level than it used to be.
My Adolph A. Weinman signature
It's a good idea to test those high overhead retailers with a buy back within the first year or so of using them. That's when you'll find out if the high overhead works both ways.
The high price is adding nothing to the true value of the coin....only some sort of value to the buying "experience" or saving of time for the customer. Each one has to evaluate what that is worth to them. When the buyers don't know the market disposition value of what they're buying, they really can't make an informed decision when buying or selling. The better dealers will give the customer fair value in any event. The others will go by what their conscience can bear.
Fast talk, big ads in Coin World, etc., won't cut it. This sort of thing puts money in the pockets of dealers and auction houses, but this does not equate to added value where the coin itself is concerned.
RMR: 'Wer, wenn ich schriee, hörte mich denn aus der Engel Ordnungen?'
CJ: 'No one!' [Ain't no angels in the coin biz]
``https://ebay.us/m/KxolR5
1. It's eliminated the coin dealer as the middleman and allows buyers and sellers to directly do business.
2. It provides competition to the coin dealer who wants to control the pricing and sell at retail plus.
3. It makes realized prices for coins transparent.
The Littleton model is very outdated because of Ebay. Littleton with its large overhead can't compete long-term with Ebay.
<< <i>I still view the things you mention as rip offs because of one important reason. Those people that buy
the coins will either sell them or their heirs will sell them. When it is found out that the prices paid
are so outlandish that they can only get a fraction of that back, if that, then they clearly paid way too
much and were ripped off. Even if the people had some perceived level of joy from ownership
over the years, that quickly disappears when they realized what an idiot they were and how bad they
were ripped off at the time they try to sell. >>
I agree. And that is why I view the coin shows on the tv shopping networks as bad for coin collecting. Eventually the people who bought the coins realize they've been oversold, causing many of them to believe that all coin dealers are ripping people off. The tv shopping networks benefit only the person misrepresenting and selling the overpriced product. In a hobby that has fewer collectors now than 1 or 2 generations ago, they're hurting the future of the hobby by turning people off.
<< <i>I think most people who buy from TV don't have computers !no way to get around and they are buying to give to there grand kids ! so when gift is given price is not discussed >>
For the HSNs, etc. their business model adds nothing but cost to what they sell; yet they seem to sell stuff pretty easily. They make money in spite of themselves.
<< <i>For the HSNs, etc. their business model adds nothing but cost to what they sell; yet they seem to sell stuff pretty easily. They make money in spite of themselves. >>
If you go to HSN's website where they also sell their overpriced coins, they allow customers to rate and leave comments on what they bought. Many are quite brutal and address receiving the coin then taking it to a coin store to find out it's only worth a fraction of what they paid. It's like a train wreck and hard to stop reading.
``https://ebay.us/m/KxolR5
I put them in the same category as thieves who contact the elderly and bilk them out of money because of a made up computer problem.
Yes, you can say this is just capitalism, but I see it as pure evil. No legitimate value is created, only illegitimate profits.
<< <i>
<< <i>For the HSNs, etc. their business model adds nothing but cost to what they sell; yet they seem to sell stuff pretty easily. They make money in spite of themselves. >>
If you go to HSN's website where they also sell their overpriced coins, they allow customers to rate and leave comments on what they bought. Many are quite brutal and address receiving the coin then taking it to a coin store to find out it's only worth a fraction of what they paid. It's like a train wreck and hard to stop reading. >>
Maybe they ought to visit the shop before they buy the crap from HSN!
If I set up a retail spot in Hollywood, or Honolulu, or San Francisco, or NYC (etc), I have every right to set the price I want/need (to cover expenses, etc).
However, imho, doing so DOES NOT create a legitimate value for the same item across the board.
Why should it? If I am selling a PCGS MS70 SAE and wanted $500 because of my expense location, but most others, of more moderate means/needs/etc, are asking $100, then why should $500 be considered more "legitimate"? To me, it shouldn't.
It's "fair game", but the other prices, if there are more of them in that range, and they are not largely different in their appearance/rarities/etc, are just as, or moreso, legitimate, imho.
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>Does High Overhead Retailing Create a Legitimate Value? >>
For "collectors", the answer is no.
For "flippers" or "investment clowns", yes.
But then, neither the flipper nor the investor deals much with high overhead businesses.
The name is LEE!
Personal story, (that I've told before):
I got interested in coins by watching a late-night coin show. I watched, saw things I'd never seen before, and spent maybe $150 on "Good or better" lots of type coins.
Yes, I spent too much. Now, 15 years later, I STILL couldn't get back what I paid.
But where did I see 3-cent pieces, or Buffalo nickels, or even Franklin halves in my "normal" life? Fact is, I didn't. The collectable coin market is, in many ways, a hidden market to most.
I took that first step, and followed it up with a few more steps. Bought a book, checked values, realized that not all "good or better" coins are the same....(and "good or better" is a pretty low target to begin with)...went to local shops, found online buying, found the coin show schedule, etc. Not all people take those next steps, and probably feed the TV sellers much more than they deserve.
But they aren't a TOTAL waste to the hobby.
<< <i>In my humble opinion, as long as you are not misrepresenting the item, you can ask whatever you want for the item. It is the buyer's choice to decide if it is a good price for them. >>
<< <i>I'm going to "defend" the TV sellers for one reason: They provide a gateway into a hobby that isn't easy to see in most people's everyday lives.
Personal story, (that I've told before):
I got interested in coins by watching a late-night coin show. I watched, saw things I'd never seen before, and spent maybe $150 on "Good or better" lots of type coins.
Yes, I spent too much. Now, 15 years later, I STILL couldn't get back what I paid.
But where did I see 3-cent pieces, or Buffalo nickels, or even Franklin halves in my "normal" life? Fact is, I didn't. The collectable coin market is, in many ways, a hidden market to most.
I took that first step, and followed it up with a few more steps. Bought a book, checked values, realized that not all "good or better" coins are the same....(and "good or better" is a pretty low target to begin with)...went to local shops, found online buying, found the coin show schedule, etc. Not all people take those next steps, and probably feed the TV sellers much more than they deserve.
But they aren't a TOTAL waste to the hobby. >>
I think you were likely the exception to the rule. Learning you were ripped off by the tv hucksters will turn off and piss off more people than will get them interested. I believe the tv hucksters do more harm than good to the hobby. Misrepresentation, dishonesty, poor ethics and overhype isn't a good face for the hobby.