Is the bottom end of the numismatic market still viable?
291fifth
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After visiting a local show yesterday, I have my doubts. The bottom end of the market seems to have become a "one-way" market (I want to sell this to you at "retail" and I don't ever want to see it again.)
All glory is fleeting.
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I agree.
RMR: 'Wer, wenn ich schriee, hörte mich denn aus der Engel Ordnungen?'
CJ: 'No one!' [Ain't no angels in the coin biz]
In your opinion what is the bottom end of the market?
My mentor told me :::
"You never know the top of the market, or the bottom of the market,
till it reaches those points, and then goes either down or up. You try
to get a CLOSE TO each side as you think, buying or selling."
i.e.; the top isn't revealed till it goes down, and the bottom isn't known
until it goes up. Only then can you say the market topped, or the market
bottomed, with any sense of accuracy.
There is a lot of optimistic pricing at shows.
There are very few coins that would find no buyers at any price.
Low grade and problem coins that sit in inventories for months are just coins waiting to be priced fairly.
We here on this forum do not represent the largest part of the market. I know 20 or 30 people who collect coins who have probably never owned one in a slab.
I completely agree with this.
Edit because I posted to the wrong thread, apologies.
The lower end of stuff lingers around here. I've seen both the quick selling dealers around here, well they cherry pick they won't go through a pile of nickels or pennies, They don't want. They can't sell it even in semi key dates even real cheap.
There were buckets and totes and tons of lower end stuff at the coin show this past weekend and some were buying that but it was pretty cheap.
Some one once said "price fixes everything".
Successful transactions with : MICHAELDIXON, Manorcourtman, Bochiman, bolivarshagnasty, AUandAG, onlyroosies, chumley, Weiss, jdimmick, BAJJERFAN, gene1978, TJM965, Smittys, GRANDAM, JTHawaii, mainejoe, softparade, derryb, Ricko
Bad transactions with : nobody to date
The bottom, middle, and top is active on eBay.
Just about any numismatic item is viable on ebay, just start it at 99c
From my online store and my table at shows there is a very strong demand for quality coins. Key dates go quickly, buyers are looking for CC coins, coins wellstruck with super luster high in demand, US and World Currency highly sought after. There are high end buyers who spend a lot and low end buyers. I have had shows where Junk box material was in higher demand.
I agree with this and the others who mention "price".
IMO, everything is liquid at the right number.
The problem for many is, they ask too much for their trash, and too little for their treasures.
Liberty: Parent of Science & Industry
As with anything, if you buy at the right price then you are ahead of the game.
From what I have noticed, margins are much, much higher on the low end stuff, but it does take at lot more work.
My point is that margins have now reached the point on low end merchandise that there is no longer a viable two-way market. It seems similar to what I see in today's stamp market. The low end refers to the kind of coins you find a a typical Sunday bourse, not a major show. Most of the dealers are only part-timers and have other sources of income.
Oh I am talking ebay where you buy coins from TopographicOceans and sell at 100% profit
Cannot think of any collectible that has a low end and has ever done well.
I know dealers who never want to see a coin again after selling it; if they were selling quality, they should realize that it is in their interest to offer to buy back what they sell at reasonable prices. Of course if they are selling substandard or problem material they may just want to be rid of it, then they need to disclose the problems and price it accordingly. CAC doesn't have a problem with buying their sold material at reasonable levels.
Things like AG-VG type coins, like seated and trader dollars, capped bust and seated halves, are near the bottom of their markets. Yet, the prices for those have always slowly increased in value over the past 40 yrs. They are low risk, "semi blue chips" that don't lose their value. There are many similarities. Low end coins have generally done well for what they are.
Problem coins are a different thing altogether. The price for cull 19th century type coins has been steady and increasing over 40 yrs as well. In some respects the high end market is full of risk and far more dependent on market cycles.....in some cases dropping up to 75% over 2-6 years.
Low end coins in slabs can be turned into "desirable" high end coins by dropping them down a grade. Grading is transitory. In a way, it's sort of a comical that a coin is considered "dreck" because it's low end for the grade or even 1 pt too high. Crack out the coin, toss it on a table among 5 dealers for bidding....and it's instantly desirable.
The type of material I am talking about does not get sent to CAC. Low end material is low end material. Most participants in the forum probably wouldn't want it but average Joe collectors in the past used to be able to trade in it. Today, it seems nobody wants it.
There are far more buyers at the low end> @291fifth said:
There are certainly some "one-way" coin dealers out there, but that doesn't make the coin market "one-way". There are competitive buyers and sellers for everything.
Doggedly collecting coins of the Central American Republic.
Visit the Society of US Pattern Collectors at USPatterns.com.
I agree with Mr Eureka.
Crap still sells.
I know several dealers who have made a very successful living from selling nothing but junky crap.
They wouldn't know a MS67 if it bit them in the shorts, but are still very successful and have a strong following.
I never could figure it out.
But they did become useful buyers of crap, and would pay me more and then in turn make even more from it....a win-win.
I got rid of schtuff for more than I could have sold it for, and they made money on top of it.
Every environment, whether it be business, social, or natural, needs its catfish equivalent.
I am not putting down numismatic catfish---they can be helpful and desirable, when their expertise and contacts are needed.
The general market we see here on the forum is not the market out in the collector world.... Many, many collectors do not care about slabs or stickers (some are barely aware of them)... and those collectors buy coins.. coins THEY like...and often pay more than what most forum members would pay...if even considered.
Cheers, RickO
high and low........................
most dealers in the Hobby are not anywhere near Legend but they are very close to the OP's description, part-timers with another source of income. it has been my experience from many years that those guys have a business model that buys really low and sells really high. the end result is a lot of lower end material that lingers for a long time. they have been caught right now by a trap that has the overall market sinking --- it's currently a buyers market. that means there are lots of small "hobby dealers" with low end stuff competing against a shrinking number of buyers who want a bargain. when they don't get it they walk away.
I have said for several years that there are too many dealers, too many shows and too many auction. slacking prices should solve that problem over the next five years.
to the point of knowing the top or bottom, I think it's like when you pack up to do a Coin Shop ---- it is almost a "given" that something will get left behind. the twist is that you never know till you get to the show and set-up.
Keets has nailed it. Finally someone seems to have actually understood what is meant by "low end market".
I was just sitting by on the sidelines, but I quite agree about bottom or low end coins not finding much attention, and certainly not much money on wholesale level OVERALL. What I hate is when a poster pulls out an "outlier" or unusual case to support their counterpoint. The simple fact is that there is phenomenally low interest at this level. And this does not include lower graded Trade Dollars & the like...
I kind of see this end as being a swamp, that borderline coins are gradually being sucked into the morass; say, who wants to buy a nice VF 1951 D penny(cent)? A 1948 S quarter in F+? Believe it or not, we used to care about even coins such as this, though maybe never an ordinary mishandled 1981 proof Jefferson.
Well, just Love coins, period.
I'm the odd duck, I like MS66 and G, probably my favorite grade for normal Federal coins is VF30, I don't like trash/damaged culls being sold as G with VG prices. This activity occurs at all levels of the market. To dust off an old theory of mine, I believe that eBay has facilitated pushing a lot of "stuff" to people who didn't know about all the problems and how to net-grade, yes dealers did that too, but never on the scale that eBay has. Eventually people get tired of dealing with it and the market slows. I have some old lowball partial sets, things like Seated Dimes in G/VG, every so often I dust them off and try to add a few pieces. The garbage that is sold today as G, VG or F is scary.
The bottom end of the market is alive and well. The people who buy coins in that area are not very likely to frequent the boards here. The reason for that could be twofold. One they are intimidated by most of the high level collectors here. Despite trying to be accessible to all, people get intimidated. Another reason could be that coins are one of many hobbies for them or they don't have time or desire to talk about the hobby.
We have people walk in to the store all the time buying coins for a few dollars each. Some buy cheap moderns, others buy low end 19th century stuff. For many collectors, their collection is their escape from the stress and craziness of work but some collectors can only afford to spend $5, $10, $20 but want something "cool" or want to finish a set. That market is likely to remain present because even in a bad economy they will spend those $10.
But when a collector walks into the shop and tries to SELL such material to you, what percentage of retail do you offer? If your offer is very low or no offer is made I would not be critical as I wouldn't want to buy any of this type material myself.
I think Greeniejr nailed it. I have observed some of the same things. The vast majority of the coin collecting community falls into this level of collecting. And as Greeniejr says, "some collectors can only afford to spend $5, $10, $20 but want something 'cool'". Such as a coin with a story. A coin from the 1850's is neat but a coin from 1862 that circulated during the civil war is "cool".
When I read the title of this thread, I didn't immediately think of fair to good condition or impaired coins as some have suggested. I thought of the bottom end of the market as being determined by price. Collectors of lower priced coins will likely appreciate nice original coins or modern coins that grade 69 or 70 as much as everyone else but it is more a matter of what they are willing to spend for them.
My experience from smaller regional coin shows is that coins priced below $50, if they are nice or have a cool factor are very saleable. $50 to $100 there is more resistance. And from $100 to $500 it will take something very nice or a lower grade key date coin and still only about 25% of potential buyers are willing to buy at that level. Above $500 are difficult to sell.
Just my observation.
291fifth, we buy everything in that is offered to us. You are right that the offer tends to be low, 30-50% of retail. But that is the trade-off of collecting in that area of the market. Most of the people who are in that space understand. Just as most people on the boards understand that for top tier material you can net 80-95% of retail. The cost to sell a $5 coin is not that different than the cost to sell a $500 coin. Also your out on a cheap coin is often very low. The spreads are much bigger even on the wholesale level. Take a coin that might retail regularly for $20, a wholesaler might make a market at a $8 bid and $12 ask. These are not sheet prices, these are real prices. If you only have 1, you may not discount it. If suddenly you have 10 come into the store, you can really only pay 6-7 because you need to be able to sell them. Those type of coins add up and if you are not careful you end up with 20-30-50-100 of certain things. So, even if you discount the piece to $12 retail, they are still getting a 50% hit. Its the nature of those type of coins. As the values get higher, spreads get smaller.
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Amen!
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I think it still is viable. I make most of my purchases at local coin shops/shows and often see casual collectors searching through the junk bins or purchasing an inexpensive type coin or two. A lot of people in small town rural America can't afford much these days in this economy but from what I've seen many regulars that come in once every few weeks and spend under $50 on an assortment of coins and supplies. Probably not going to pay a coin dealer's overhead but they can be the cherry on top of other revenue streams. A few weeks ago at an estate auction with tons of low end coins (nothing over $50) but there were tons of interested buyers and bidders and all the stuff, even the junk sold for considerably more than I thought it would. Almost retail prices for proof sets, wheat cents, and other low end stuff that most dealers usually have accumulate in their stores.