Thinking out loud
Justacommeman
Posts: 22,852 ✭✭✭✭✭
I wonder when more dealers will start be creative with their inventory. Meaning offering terms such as 90 day interest free payments or meaningful discounts or both. Or other creative incentives......I know Doug Winter just sent a recent email to that effect.
mark
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Fellas, leave the tight pants to the ladies. If I can count the coins in your pockets you better use them to call a tailor. Stay thirsty my friends......
Fellas, leave the tight pants to the ladies. If I can count the coins in your pockets you better use them to call a tailor. Stay thirsty my friends......
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they will need to do something if their cash-flow is interrupted for much longer. B&M's must be in trouble in many states and with no shows or auctions coupled with gathering restrictions it has to be getting pretty dry for many folks. are lower prices on the horizon??
I'd think that the larger margin you typically maintain on asking prices or the more urgent the need for liquidity might dictate additional actions by some dealers because they either can afford to (if they generally have larger margins) or they might need to (if there is an urgent need for liquidity). Other dealers have historically maintained friendly business guidelines for their clients.
In honor of the memory of Cpl. Michael E. Thompson
I have never and will never purchase coins on an installment plan. Meaningful price drops do get my attention!
This is true. I was wondering the same. Not only in the coin/bullion business, but in any other business'. Esp. the restaurant business! Customers would jump at the discounts, one would think. Imagine how a 50% off deal would create the stream flowing again?
"Jesus died for you and for me, Thank you,Jesus"!!!
--- If it should happen I die and leave this world and you want to remember me. Please only remember my opening Sig Line.Here was the DW email which is creative
“Given the current state of the economy, it is understandable that many collectors don’t want to write a check for coins. As someone who typically spends in excess of $1,000,000 per month on coins for inventory, I totally understand your position.
But you likely have some extra buying power in your collection that you haven’t even given any thought to: semi-numismatic or common (“generic”) US gold.
You probably aren’t aware of this but premiums for common US gold coins, especially eagles and double eagles, are at their highest levels in years. Coins which as recently as two months ago were being melted due to their overabundance are now worth extremely strong premiums.
As an example, let’s look at MS62 $20 Libs and Saints.
As of 4/5/2020 (with a spot basis of $1641.00) the sell price posted by Heritage for these (NGC graded) was as follows:
$20 Libs: $1,905
$20 Saints: $1,885
Assuming a hypothetical collector has a total of 15 of these (let’s say Saints), their wholesale value comes out to around $27,750 (figuring they can be sold at $1,850 each). Two months ago, you’d have been looking at around $24,375 for the same coins (figuring them at $1,625 each). You just made $3,375 and you didn’t even know it!
I would be happy to trade my rare coins for you semi-numismatic or even bullion gold. And I’ll give you a full 100% of what I net for it (less postage) when I sell it for you in trade for coins from my inventory.
I’ll either auction your coins in a special one-day sale to hundreds of dealers across the United States, or sell them to a dealer with whom I have a personal relationship, ensuring you get the most money and the check is good. Unlike most dealers, I’m not looking to profit on your bullion or generic gold trades; I just want you to use the proceeds on coins from my inventory.
And if I don’t have a coin in stock right now that you want, we can leave the money on deposit and use it when the right coin comes into my inventory.
Let’s see if we can maximize your bullion and add an interesting coin or two to your collection!”
Fellas, leave the tight pants to the ladies. If I can count the coins in your pockets you better use them to call a tailor. Stay thirsty my friends......
Give it a try? The best and most expensive coins I ever owned were purchased on time from a local dealer in VA.
no shows or auctions
??? - Heritage, StacksBowers, Legend, Great Collections, etc. are still up and running.
Member ANA, SPMC, SCNA, FUN, CONECA
I wish I had 15 spare Saints just laying around. Must be nice! I am def not in the target demographic.
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Agreed, I will do my best to never be in debt again for anything.
I liked Doug's email. If I was still not waiting on an open date I might have sent him some generic gold. Seems like a good plan
So true!
My Collection of Old Holders
Never a slave to one plastic brand will I ever be.
Hmmm... I have always done layaways interest free for as long as a year as long as I have a financial deposit to insure it is a deal!
Bullion IS money.
My general philosophy of personal finance is that if I can't write a check (or pay off the card entirely when due) for something, then I can't afford it. Pretty much all of my favorite coins did not require a financial stretch to acquire. I do this hobby for enjoyment, not to create financial stress for myself. IF I were to really stretch for a coin, it would most likely be for something I'd be looking to sell for a profit down the road, but I'd really rather speculate in the stock market. FAR easier to unwind a mistake. OTOH, I completely understand that a lot of pros make money buying and selling very expensive coins. More power to 'em.
Sounds like a reasonable and creative offer on the part of Mr. Winter. From my standpoint, I'm looking to hold my gold (particularly bullion) as insurance. The US is printing a hellacious amount of money to support the economy right now, and I suspect the price of gold may be heading higher in the coming months. If not, I'll still own the gold.
Selling bullion to finance a collector coin is mostly a lateral move, minus the acquisition fees and customary mark up. I feel a collector coin would likely take longer to sell than bullion if you needed out, just saying. I’ve done it in the past under different market conditions, but usually, that move cost you coming and going. If the market has risen on bullion to cover that and the collector coin is truly something special, then the play might still be tempting. That may even get more attractive if the dealer is willing to pay full pop for the bullion and/or possibly lowering a retail number of their coin to some degree.
Other things I would consider are my gut feeling as to where bullion is going from here and if it still has legs to grow/fall as well as questioning why a dealer would want to switch positions with me while I basically pay a fee for the privilege.
Walmart around Xmas used to or still does it, so why not!
I wish I could be like that! I couldn't afford most of the things I buy. You are lucky to be able to pay cash for your third car! The CSA Half dollar, Scott Restrike token, and BU 1861-O 50c (struck by CSA) Set was something I could never afford to pay for all at once as twenty-something student. Other coins bought on time were out of my price range for a single payment.
My philosophy is when I want something I try to get it and damn the debt! My gem cameo Proof 1894 $2 1/2 cost me two months rent. My dealer did not charge interest. Wish I could buy my house on time.
PS I no longer own any of those special coin and all were sold at a stupid silly profit after I had the pleasure of ownership w/o the worry of financial doom.
Soon.
A few thoughts:
Why on earth would you feel the need to convert me? Clearly we have different perspectives on just about everything. And from my vantage point, that's a good thing.
I've never owned more than a single car, currently a 2012 Camry Hybrid. My "man toy" indulgence is high-end audio equipment. Since I'm an (electrical) engineer by training, I know how to spot snake oil, and so I feel comfortable I'm getting value when I make an expensive purchase there.
A lot of people buy "special coins" and end up taking a bath on them. I don't care how good your eye is or how much you know, market cycles can negate those advantages. Given the overheads of buying/selling coins, I wouldn't try to be in the game strictly for profit unless I was much more knowledgeable and well-connected than I am or will ever be, for that matter. That said, I've done OK over the years in the hobby by just being highly selective, doing my research, and focusing primarily on eye appeal and originality.
@CoinJunkie …. @Insider2 - I like and respect both of you......so please stop this quarreling.
You're assuming pretty large margins. Restaurants offering 50% off are losing 30% or more on every meal. They would be better off declaring bankruptcy.
Worse with coins. A 50% off sale by me is a 40% loss. I would do it if I needed liquidity, but it wouldn't be to save the business. It would be a going out of business sale.
I think I would look at the Winter letter as more dire. What he's doing is offering to trade collector coins for a very liquid asset. If you ask me, that means he thinks the collectible coin prices are heading downward. It's creative, but I think it is suggestive of a lack of faith in the collectible coin market.
Edited to add: On rereading the letter, I'm not sure it is so dire. Winter is not guaranteeing a price on the swap. This is ultimately a potentially bad deal for the collector. If gold drops $100 or the premium evaporates during the days the coins are in the mail, you will only get credited for the lower number.
LOL, I was not aware we were. CJ
and I 
were exchanging opinions in a very respectable way. I agreed with everything he posted - to each their own. I was making a suggestion based on good experiences. Some folks like CJ don't like to be in debt. Who can argue w/that? Unfortunately, a very friendly "I might convert you" may have the effect of cutting a very tightly-wound and stretched-out cable. The result is often seen as catastrophic to onlookers - in this case you (?).
I have adjusted my model by focusing on cash flow (Classic Mustang parts). Ebay ponied up 50,000 free listings. No way I could EVER get even 1000 listed, but I am literally going 1 shelf at a time, organizing, finding stuff that has been hidden, etc. There are a lot of things that it was not worth putting on ebay, and not worth dragging to the swap meet, and seldom would a walk in want it.
So EVERYTHING from the shelf is listed to ebay. 40 or so a day. Weird stuff is selling, and since I really don't have any "cost" left in it, it is 100% profit, less ebay/paypal, plus it gets is off the shelf, never to be "put back" into inventory, and no others like it will ever be purchased for inventory / resale. A lot of this stuff was material that came in a lot / buy out purchase, where 25% of the lot was what I paid for, and the rest is just "free" in my estimation of what had value I would purchase.
So now the odd and end stuff is moving out. The price per item sold metric has plummeted, but the net sales are up.
The big ticket or items that sell well all the time, it is buckle down time. I get offers of $20 for a $400 item, so I just block that person, and move on. Some have sold at realistic prices, but a lot is just set back for sunnier days.
More efficient to just set auto-reject in the listing for offers under a certain amount. But whatever works for you...
One need not think that collectible prices are heading downward in order to want to trade them for more liquid assets.
Mark Feld* of Heritage Auctions*Unless otherwise noted, my posts here represent my personal opinions.
If a dealer takes Paypal, Paypal Credit will do this for you. The level varies (I think it's normally $300 min purchase), but it's 6 months no interest, I have used just for cash flow, even if I have the cash. I think it does mean I spend more than I normally would, but oh well. Every once in a while PP offers up to 24 mos, no interest, but that has only been on eBay.
Paypal Credit offers are all over the board for me. Some are interest free for 6 months...some 12 monthly payments interest free...and others 24 months interest free. The catch is you better look before you click! Sometimes they are not interest free and carry a high interest rate!
Good move by Mr. Winters. Who knows how much extra sales this will really translate to, but at least he is trying.
I was completely shocked to read about the premium over melt for generic gold. My impression was that these were available by the barrel-full from major wholesalers just a month ago. Either that entire supply just got wiped clean, or there's some savvy market making being done by those who hold the goods.
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Most coin dealers are always as flexible as they need to be to close any deal that makes economic sense. Sometimes, that can mean discounts, extended terms, taking undesirable coins in trade, etc. And other times, there's no room for any flexibility. It just depends on the deal.
As for collectors buying coins on credit, again, it depends on the deal. For the right coin, it can make perfect sense to go beyond one's comfort zone. I've done that many times, and rarely regretted it. The trick, of course, is finding the right coin.
Doggedly collecting coins of the Central American Republic.
Visit the Society of US Pattern Collectors at USPatterns.com.
Yea...I'm up about about $100 for all 18 .
2 out of 3 of my 66+ went up fifteen bucks each, the other is a big fat zero...Yippi
My biggest "green" jumper is a hole filler.
https://www.pcgs.com/prices/detail/st-gaudens-20/67/most-active
My Saint Set
@amwldcoin ...Yes you are correct, they got busted for misleading customers a couple of years ago, so hopefully they've cleaned it up. So far, I haven't paid a dime in interest.
No, not necessarily. I re-read the letter and it actually seems less like a good deal for the collector than it did when I first read it. He's not guaranteeing the Heritage ask price. In fact, if you trade the gold and he sells it for $400 back of ask, he's only crediting you the $400 back of ask.
You might want to look at market prices not price guide prices. 66 Saints went from $2000 to $2500. 63 and 64 Saints were barely above melt and now have $100 premium.
In theory, he'll get you as much for your gold as you're likely to get anywhere and will do the work for you. The caveat is you have to spend all the proceeds on his inventory. So it sounds like a good deal if you want something he has and can't afford it otherwise. If that's not the case, it makes no sense. It's good marketing because it might prompt you to review his inventory and decide you want something you hadn't known you wanted. Or you might have already had your eye on something of his but didn't have the cash to outlay.
Interesting times.... I can see some creativity developing... however, it is still early in this current business atmosphere. Things can change quickly and change could come from different places... i.e. dollar value, extended business restrictions, geopolitical tensions etc.. Fun to watch... and I think gold is due for a spike in value shortly... JMO....Cheers, RickO
Sight unseen trading of MS66 saints just blows my mind.
I can't begin to understand it.
You are correct though...There are presently no saints in MS66 that I would/could buy for that price.
(I went through all 40 pages of Collector's Corner last night because I was bored)
Two months ago you could get 66 dreck at 2K and now it's $2,500+
I have no idea what type of person would buy it.
I did just buy this one for $2160 four days ago but it was a MS65.
My Saint Set
How about foreign gold .....like Krugerrands ?
I give away money. I collect money.
I don’t love money . I do love the Lord God.
At our local Fred Meyer (Kroger brands for those in other parts of the U.S.) Easter Candy is 50% off across the board. I have never seen that almost a week before Easter.
If you need an installment plan to buy coins you need to forget about buying coins or match your spending with your budget. We are in really bad times no end in sight. Don’t spend today what you will regret tomorrow. Many depressed today especially from past financial decisions / Corona Virus has magnified this.
A dealer is not your bank. Your lack of money is not his problem. How you manage your finances is your responsibility. Spending beyond your budget no matter what it is equals addiction. Eventually you will go broke / bankrupt.
Speculation on Metals or coins is a gamble. Gambling like drinking, strip clubbing (sex) can be an addiction.
Thought this was an Ed Sheeran thread. Moving on...
10-4,
My Instagram picturesErik
My registry sets
I can stop anytime I want
Why not borrow now to buy a hard asset & pay back w/ cheap paper?
My Saint Set
Buying an expensive coin on installment 6 months ago made a lot of sense with the stock market going up. Now, at least with me, it doesn’t make much sense. With the stock market down 25% and my work income down and all of the uncertainty moving forward I’d rather abstain from buying coins unless a dream coin becomes available at a good price.
I think I am going to have to adopt this as I am trying to pay off my Pay Pal credit bills from coin purchases. I still have my job but with these uncertain times how much longer will I have this job I really don't know.
As I understand it 95 pct collectors will lose money nowadays. If coins bought on credit chances IMO 100 pct.
Blow out the coins to get rid of cc balances or the hole you dug will get deeper. It’s not worth it buy coins on credit. Your gambling with a weak hand - Addiction. Break it.
If your wealthy and your coins a very small pct your net worth or your dividends more than pay for them then that’s a different situation.
Friend in coin club suffering major depression plus fear of living nightmare corona virus now that he did not blow out all his coins when the 2015 Houston oil crash hit. Many nights he has to take zanex get to sleep. I have tried counsel him steer him towards help - you can’t change the past.
My dealer has been offering me this for over 20 years. For example: buy a coin for say 1k. Send him $100/mth for ten months. No problem
Yep, my dealer friend as well!
"Jesus died for you and for me, Thank you,Jesus"!!!
--- If it should happen I die and leave this world and you want to remember me. Please only remember my opening Sig Line.Give and take. It's the situation I find myself in with every trade I've been in. And I've been in a few.
Know your dealer too. You may pay your installments on time....and then find out they no longer have the coin.....sold it for cash flow due to harsh times. No dealer is immune. And you as a customer have no access to their financial strength. In tough times like this, this is an important issue. I would think a lot of dealers will be forced to leave the market on this one.....and some of them will be those who were considered impervious to such things.