Options
What would you recommend for dealers with tired/stale inventory?
logger7
Posts: 8,248 ✭✭✭✭✭
I get frustrated when I see dealers with the same stale inventory for long periods of time. Either coins/currency are listed at high retail or they're unrealistically graded or both. What would you advise such dealers to do to move their material? Maybe I'm unrealistic thinking most want to do the rational thing or I tend to be a meddler. And is the maxim to only give advice when requested the best position?
1
Comments
I would recommend that they lower their prices.
Worry is the interest you pay on a debt you may not owe.
They are numismatic hoarders. Just move on.
I would let the dealer run their business as s/he sees fit. I’m sure there is a reason for their action, even if it’s as simple as not being able to replace inventory and needing something to do to keep busy.
This. I would not weigh in on a dealer's stale inventory unless:
a) they asked me for advice
b) I was negotiating for a specific coin
I view stale inventory as opportunity. The Large Cent I purchased last night had been on my watchlist for a year. I made an offer of 25% off the asking price...the dealer accepted my offer 5 minutes after I made it. I think it was a win for both parties.
I have another one I am watching...it has only been 3 months. When it gets to 6 months I will probably make an offer.
There was a dealer here in DFW who had the same coins in the same sequence for a couple of years in a row. If he sold something, the whole case arrangement would move by one slot. But otherwise, the same coins sitting next to each other every show.
About four or five months ago, I was sitting at his table chewing the fat. I looked at the same coin I've looked at five times. And he finally says "I paid X, throw me a number". I threw him a number that was a little above what he paid and half what he was asking for it for three years. And he took it.
(Now in his defense, /a/ he did a metric ton of gold sales, and /b/ he's totally changed in the last five months and almost everything old is sold and everything for sale is new)
ANA 50 year/Life Member (now "Emeritus")
I applaud your patience
Successful BST Transactions: erwindoc, VTchaser, moursund, robkool, RelicKING, Herb_T, Meltdown, ElmerFusterpuck
Give advice only when it's solicited from you, and even then you might be best served not giving it.
Keeper of the VAM Catalog • Professional Coin Imaging • Prime Number Set • World Coins in Early America • British Trade Dollars • Variety Attribution
Agree - win-win. Collectors shouldn’t hesitate to make a fair (market value) offer. If the dealer is offended or out of touch, just move on.
Dealers are well advised to move this material and plow the cash into the next opportunity. Inventory turns are critical.
Tied up cash doesn’t generate returns.
Yes, only give a dealer advice if it is requested.
Free advice is worth what it costs.
I only give advice to my dog. After I shut up, he still likes me.
Buy him out so he can get fresh inventory.
Having distributed other products I can appreciate the inevitable stale product scenario.
There are reasons why it sits, and sometimes those are hard to swallow. It's not an easy thing to blow out inventory you know is valuable, but not moving.
As a dealer, I don’t really need advice on how to sell my stale inventory. I need reasonable offers. Just keep in mind that unreasonable offers can be counterproductive, so do your homework before making offers.
Doggedly collecting coins of the Central American Republic.
Visit the Society of US Pattern Collectors at USPatterns.com.
Send the stale coins to cac grading and get them auctioned off right away. Should provide an “interest” in the current market, and finally move the inventory.
It sounds like he needs change up his display, diversify. At local shows notice guy with same half dozen PCGS CAC $20 DE for ages. Nice display - Are they overpriced or is it an affordability issue with people coming in bourse room?
It could be many of the people coming in bourse room broke, cheapos, tirekickers, won’t pay the money. Or just looking in one area. Furthermore at any show one is competing with sellers that have everything under the sun. Make him a reasonable offer about 5-10 pct off. Is his stuff nothing but expensive stuff over $300?
I really do well at shows (keystone) on stuff under $100. The more expensive it is the more it narrows the pool of good retail buyers. A lot of times put red (sale) price sticker on a dozen or so slabs coins - just 5-10 pct over cost. If those not moving - people coming in show broke / won’t pay the money, Players just looking for rip. A couple regular good retail buyers can make your show helping one clear the table fee hurdle. Diversify / Change up your display - I run a balanced offense doing both coins and currency both US and world. One case just slabs (many stacked) the other mixed - A binder of collector coins in pages 2x2’’s good profit material. Maybe some cheap slabs under $35 (slab cost). Plus Stacks of both raw and graded currency (many top pop). One big spender buys nothing but currency. Try have stuff your big competitors (low margin big gun rich dealers) don’t have.
>
You would think he would at least move them around so as to not be obvious that nothing moves. People will stop looking at all if the inventory rarely changes and/or is unrealistically priced.
I don’t really consider “above $300” expensive. I also think that dealing in lower priced material is going to be a whole different world. At that level you have fierce competition as you can literally find the same coin easily almost anywhere. Some cut out the middle man and buy from eBay or can find wholesalers online.
This.
We're very small sellers on E-Bay. We usually have 10-20 coins up at any one time.
We had a great 6 weeks from mid April to mid June. The last month nothing. We have a number coins listed that have been on for months. I consider it stale inventory.
As was said, if I wanted to move the coins, I lower the price until they sell.
Here is my thinking. The store costs $20/ month. That's our overhead. Let's say I list a coin for $3000 and it sits. I could in theory lower the price to $2700 and it probably will move. I pay E-Bay $250 and would net $2450. I scour the marketplace and I decide that I would love to buy the coin I'm offering at $2450. Does lowering the price make sense? In fact, if the same grade came available at $2450, I would buy another.
Reasons for us to sell:
1)Bought too much inventory and need to move dollars.
2)Unhappy with the coin we bought,
3)We upgraded, and now wish to move the lower grade.
Otherwise, stale inventory is ok since we aren't offering coins to meet living expenses.
With that said, we will delist coins when we sense no one is interested in them and fill in with new coins.
Lately, we haven't found much new interesting inventory that meets our price point so we go with stale.
If stickered and it won’t move, try offering for 10% or so over CAC published bid level if you need to move it. Obviously I’m referring largely to “average” coins and not those with unusually strong eye appeal or other superlative trait.
There were many dealers of that type at the Sunday bourse shows I attended on decades past. I would simply ignore them and quickly walk past their cases. Their credo was "If I can't sell for a good profit I won't sell it at all."
If most of the people coming in the bourse room don’t have even $300 imo it is expensive lol.
Additionally there are other hobby / entertainment venues coins in competition with. I do realize a lot of well off gung ho collectors here but many well off people spend money on cars, boating, entertainment vs pieces of metal that tarnish as time goes on. Everybody knows - It’s easier make 25 pct on a $100 coin than a $1000 coin.
If I do have an offer on an a big ticket coin had awhile that works (like 5-10 pct over cost) I take it and move the coin. Cash flow is important for the business.
My "stale" inventory is impossible to replace.
Dealers must think of replacement costs and inflation. Plus overhead.
I am extremely happy holding my "stale" inventory.
I do take reasonable offers.
When I lived in the PNW and went to many coin shows, there were a couple of dealers with inventory that never seemed to change and was noticeably - no, obviously - overpriced. Never offered any advice. Just passed their tables by. Cheers, RickO
Many of them are just trying to get out of the house for the day and don't golf.
Keeper of the VAM Catalog • Professional Coin Imaging • Prime Number Set • World Coins in Early America • British Trade Dollars • Variety Attribution
This thread reminds me of antique store consignment booths for some selling coins. I use to go into one shop from time to time for years. Some of the booths had coins. I use to see the same coins with the same prices all the time. Some had little signs next to them saying "Prices Firm". Never understood why they would just let them sit. Btw, all were extremely over-priced.
My Original Song Written to my late wife-"Plus other original music by me"
https://youtube.com/playlist?list=PL8A11CC8CC6093D80
https://n1m.com/bobbysmith1
Good stuff.
I think it depends on the dealer, but I've seen a few on ebay that will do BIN pricing first (priced "optimistically"), then use BIN with offers, then if it still doesn't sell will do auctions starting at 99 cents with no reserve. It depends on how badly the dealer wants to turn inventory over... I suppose if they're independently wealthy and don't need the revenue stream, they'll keep prices high and wait for the most profit because they can...
Successful BST transactions with: SilverEagles92; Ahrensdad; Smitty; GregHansen; Lablade; Mercury10c; copperflopper; whatsup; KISHU1; scrapman1077, crispy, canadanz, smallchange, robkool, Mission16, ranshdow, ibzman350, Fallguy, Collectorcoins, SurfinxHI, jwitten, Walkerguy21D, dsessom.
**
Why wait?**
If your actively looking to purchase, make the offer now.
If the dealer doesn't accept it let them know if something changes on their end your actively looking.
Blowout sale!!!!!!’
For some dealers in thin markets, there are times when there is absolutely nothing to buy for inventory.
I would rather sit on "stale" inventory than cash if I can not put that cash to use. I do keep some cash on reserve for quick opportunities as well as a line of credit.
So there is no incentive (if there is nothing to buy) to sell at a huge discount just to make a sale.
10c on the dollar doesn’t cut it in the coin biz.
I stand behind my inventory like a tough, experienced football coach stands behind his players / playbook.
Without good retail money / buyers one can’t make positive P&L. So would rather just sit on (not give away) the good stuff (not discount below 10 pct) vs sink more money in the biz. If they don’t pay the money no use for them. There are many of them that are cheapos - it’s simply the background radiation of the RCI cosmos. Having a couple strong regular good retail buyers (blue chip players) puts us in the win column. However I do keep good cash balance in case super deal walks up.
The Non certified collector material does well especially Paper Money. It’s not much but with its strong margins helps pay expenses. Like where the running game opens up where they shut down the passing game. Some shows good / some bad.
I know of more than one dealer with landmark coins in inventory and for considerable periods of time. While it might take time to sell some pieces, they might not be correctly characterized as stale.
But there are a lot of other dealers with stale inventory. My take on that is that retail participation in spaces that decades ago were not commonly where retail went (auctions, for instance) has increased dramatically, as well as information (auction archives, sales histories, what used to be dealer price guides, ...). Competing with your target customers in acquiring means very low margins and often losses. It gets really bad if inventory gets stale and goes to auction. There the kitty gets cut by the auction companies in their fees. SO what do you tell that large fraction of the dealer community? Get out of the business?
Blow them out at cost or send them to auction…they aren’t putting any cash in his pocket otherwise and the table cost is slowly bleeding him dry…
They need to learn the market better so they can buy future coins at more appropriate prices. Once they take the loss on the first batch of coins, hopefully they won’t make the same mistake again.
Sitting and dwelling on a few hundred to few thousand dollar loss on coins is wasting time and future buying opportunities. Cut the losses and move on to better deals.
Why do I let stale inventory sit?
Because, those are the coins I wish to keep.
I have said to buyers in the middle of a negotiation, that some deals are not meant to get done, and it's the fault of neither party.
I have 3 hats at home.
One says seller.
Another says buyer
Another says closed for vacation.
Which hat I choose depends on the mood I'm in.
And there is absolutely nothing wrong with that. Especially if it took a lot of work to buy the coin(s) in the first place.
Not everyone works by the “turn inventory fast” credo.
The problem is that many of these dealers never sold their coins. They just died with them. (This literally true in several cases I know of.)
There are a lot of amateur dealers at local shows that just do it for fun.
You are thinking too much about "dealers" as actual businesses. The collectibles markets, including coins, are full of amateurs and part timers that aren't really trying to make money. They like the coins and would rather keep them than sell them cheaply.
I've often thought that the best dealers are the people that care least about what they are dealing. It is easier to make business decisions and not collector decisions.
I’m not doubting your experience, but mine has been the polar opposite. Many don’t care about cheaper coins, but coins above $1,000 with excellent eye appeal usually have more profit potential. Bought right, I think I could make more both percentage wise and nominally with a really nicely toned Morgan (or other type coin) or a rare PL type than a generic MS65-MS66 Morgan Dollar. And (for me at least), it would be less work.
In many cases, I’d agree it makes sense. Cash flow as well as opportunity cost are underrated by many.
OK. Fine. But when I hear "dealer", I think of someone running a business, not trying to generate a little cash out of a hobby.
If you're trying to make a living paying $2450 for coins that you could only net $2450 on, then I'd call you, at the very best, a bad businessman, If you're instead offering the $2450 coin at a higher price with no real expectation that you'll get that price but would rather keep the coin for what you could get for it, then I won't say you're doing it wrong, but would question you calling yourself a dealer.
IMO, a dealer would, after paying $2450 for a coin and not being able to get a gross sale of $3000, instead take a net of $2450, or even $2300 or $2200, learn his lesson, and move on to another coin or coins that could earn back the difference and then some.
Anyone who does otherwise, and on purpose, is a collector who pretends to be a dealer because he thinks it enables him to buy at wholesale. There is nothing wrong with showing off your coins with prices that no one or only the seriously uninformed would pay, but don't pretend you're running a business.
Small dealer / eBay sellers are definitely players in the business imo especially if filling schedule C.
As far a stale inventory that’s a subjective term. I have had shows where did not make enough GM even meet the table fee so loss along with the Opex mileage and meals. Other shows a whale or 2 got us over the goal line in the green.
Nobody really knows what the sales of the op dealer example in the thread really is. Perhaps setting up at shows supplements his income / sch c deduction. We have no idea what material he has or pricing. As we are in the summer doldrums things aren’t exactly booming. Big ticket $2500 items can be tough to move and force lower margins. Not necessarily my cup of tea unless some slabbed gold coin got close to melt.
If he as 10-20 big tickets coins up about as much as somebody who has 250 items in their Bay Store in $50-$300 range at 50-100 pct markup. eBay store fixed cost $27.95 their seller fees about 10 pct. If he moves just 1 piece at $2500 say 25 pct markup it makes his month. I don’t understand delisting stuff my opinion the more the merrier you never know what really will sell. I would price stuff there at least cost plus 25 pct. Or more - If can’t get that pivot to material that can. If he can’t get decent cost plus markup on his material he needs to move to something that can.
As far as coins he’s unhappy with lower the price to sell it and get cash flow. If loss can be netted against one’s that sold at profit at tax time plus Opex.for sch c.
If your not some big gun mega dealer not to worry - just work your angle and get a nice business card printed up with nice big ticket coin pic. Who knows you might get a cool estate deal.
I would not want look like had stale inventory - perhaps a make over of how I displayed material in show display cases.
Many coins take a long time to sell. Even if they are in the "right" holder, right price or in the ballpark. Modern coins in MS/PR69/70 holders in the $20-$100 or so range can take a long time to sell. A collector is trying to find a specific coin, or fill a gap. Problem coins generally need to be sold at discount, some should get certified by one of the ebay acceptable companies so at least you'll have a better idea of marketplace assessments. Often a prospective buyer sees a coin that reminds them of something they missed out of or believe that they'd like or make money on. They make a reasonable offer. Even a 10% profit beats many investments, so what's the issue except for time/trouble?
I guess we're having a definitional conversation? We haven't been in the hobby long enough and have no expertise in coins so you probably are correct? We're collectors. We buy coins, offer coins and hopefully eek out some return which doesn't affect our lifestyle. I thought dealers buy and sell coins but at our size We're probably collector sellers? We usually sell between 50-70 Double eagles per year. In April-May we sold about 16. If the inventory becomes stale, we review the inventory, decide on whether to discount the coins, and decide whether we wish to continue to own the coin at the price we could net? We close the E-Bay store fairly offer for vacation so we're really collectors? We do sell coins at a loss if it no longer fits our needs. We cannot buy wholesale, thus our margins are constrained. A vast majority All our sales are through E-Bay.
WE do pretend we're running a business. We do keep detailed records, file taxes based on the net, and run our inventory as a business for reporting purposes. Everything will be for sale at some point. We have had 7 fairly profitable years in a row, but I still work full time at another biz, in retirement, so I accept the definition that I'm a pretend dealer.
Mods can be tough sell / a skilled vest pocket trader friend told me onetime - “they simply are not a deal for us in the biz if paying above 40pct MV (mod silverCommems).”
Understand but I don’t let other players “define” me.
It’s your playcall how you work your angle / define yourself. . I think that volume DE per year impressive. I bet some really nice coins.
I believe the poster to whom you are replying has estimated in the past that about 80% of all collectors don't ever pay more than $300 for a single coin. I infer this is "ballpark" accurate. It's also consistent with the "budget" section I have attended at national shows (the majority). That's all they can afford.
Since I don't collect US coinage and many world coins have limited marketability, I now tend to mostly buy coins above $250, but I still do buy some below that but only for my primary collection. As a collector, I find it really tedious to get rid of cheaper coins I no longer want which is why I don't actively buy for any "side collections".
For example, I bought a bunch of Kennedy half dollars, largely PR69/70 issues, common dates, some second tier service holders too. Paid $3 each from a dealer I do a lot of business with, he just wanted to move his tired inventory out, and those take a long time to sell. Or Anacs, ICG product that may not have much of a following. Put online and you may have to wait a while. I was talking to a local major dealer about modern proof sets and mint sets and he gets tired of processing them as they tie up too much space in his shop and the profits are small.
I have no issues with how anyone defines me.
People can think whatever they want. I knew of a CEO in a Fortune 500 company who rushed out to get a copy of a book to see how another CEO described their biz relationship. It was important to him. I found it interesting. Maybe, I would have felt the same if I was "famous"? For me, it's about family and biz
successes.
This is a message board. No more, no less. Let them believe what they need to believe.