Definition of a dealer, spurred by another thread
SurfinxHI
Posts: 2,426 ✭✭✭✭✭
What is the definition of a dealer, and why is there so much acrimony ascribed to it? In a previous thread, I think I saw 5 different definitions, and there were noses turned up at various ones. Why is there such elitism associated with the term? Why are so many disgusted with the idea of a “dealer?”
Let’s break it down a bit.
One poster provided a definition based on IRS filings, simplified. Thus, if the person is filing business taxes, and is consistently trying to make a profit, then they are a dealer.
Another said that folks sucking up table space at weekend shows with stale inventory are not dealers, and implied that these are just hobbyists out on the weekend with nothing better to do.
Another insisted that to be a dealer, one had to derive most or all income from that pursuit.
Yet another said that a dealer likely has employees and a storefront or on line presence.
Why are there sooooo many definitions, and why are “dealers” that don’t fit definition #3 so maligned? I find it funny that so many folks look down on the “vest pocket” or “weekend warrior” dealer. I know many of these folks, and frequently, they are some of the sharpest folks on the floor or in the auction house.
I personally subscribe to a notion of a multi-focal dealer definition, but in order to qualify as a dealer, to me, the person has to fit one primary rule. They must have a tax license (ID number) for a qualified business. Then I’d break it down into different types of dealers.
A. The Big boys/Girls. You know who these are. Established names/businesses in the market that handle impressive amounts of stuff.
B. The B&M. Again, you know them as they are a tangible presence somewhere. But frequently, these guys are local to just a 20-50 mile area.
C. The Internet Specialist. No store, but has a big on line presence. Or maybe just a presence on an App like Instagram or Facebook Marketplace.
D. The Show Walker/Auction Specialist. You might not know this person. But other Dealers do. And this person might make deals in the millions per quarter. But on the outside, they just look like a random Joe. Or a well-dressed man (think zztop).
E. The Show Dealer. You see them at the big and little shows. They travel a ton. Often, these are specialists in certain varieties of coins. Often, quick to share knowledge, free advice, and are pretty awesome folks.
F. The Bullion Guy. We all know one or 6 of them. He’s got Darth Vader rounds to 1000 ounce bars in stock at all times.
G. The Wholesaler. Man, if you don’t know this person, and you think you are a dealer…then you still have some education coming. These folks can be, and often are, lifesavers, if you are buying right. Look around the bourse and find the busiest table that has limited showcases. That’s your wholesaler.
H. The Intermediate. This guy is just past definition I, and is making a go of it. It might not be full time, might not have 15 employees, but this person has taken the lumps, bumps, and losses, and decided it’s ok to keep going. Often, they can work hard for you. Likely is a mix of D, E, F, and C.
I. The Nubie. Looks a lot like D or E and is trying to figure out their niche in the market. Maybe setting up for the first or seventh time, just trying to make it through. Learning curve….
J. The Shyster. That guy. The jerk that rips everyone and brags loudly of it to all who will listen. He’s always right. And he’ll let you know it too. I’m pretty sure he’d buy his own mother’s wedding ring for 25% of melt. And laugh.
Now, there is no reason some of these categories can’t be combined, and frequently they are (Think APMEX, Heritage, or someone like Don Rinkor or Witter Coins).
Where I personally think some of the angst coming out (against dealers) is due to the well-loved and frequently used category that loosely put, is a hobbyist that doesn’t file taxes as a business and doesn’t have a tax ID number. This person frequently falls into these sub-categories.
A. Local Show Weekend Warrior. Maybe this is the guy referenced above with the “stale” inventory and lacks a golf game? The club member that just wants to be part of the fun once or twice a year and make a buck or two.
B. The Flipper. You see him everywhere. Low-balling to buys, high-balling the sells. Often, these are the noisiest ones around, at shows or internet chat-rooms.
C. I’m a Dealer, Dammit. This guy just wants the privileges to buy and sell, but doesn’t want the hassle of the nasty bits of taxes and stuff. And he craves your respect. Kinda oily at best. Overpriced and looking for a fish to catch.
Ok, enough of my thoughts. What are yours? (And I’ll likely edit this as we go, for clarity).
Surf
Comments
Coin dealers are held in very high esteem in society so when someone who isn't a real coin dealer claims to be a coin dealer, it becomes a blatant case of "stolen valor" which is obscene and disgraceful.
Worry is the interest you pay on a debt you may not owe.
"Paper money eventually returns to its intrinsic value---zero."----Voltaire
"Everything you say should be true, but not everything true should be said."----Voltaire
Yikes, I know some great coin dealers that I hold in high regard, but I also know some shysters. I wouldn't throw terms like "stolen valor" around when referring to coin dealers.
Philippians 4:4-7
I don't think codifying "Fake dealers" is productive. Gatekeeping coins seems bizarre to me and there is no amount of safeguarding that is going to protect an uneducated consumer from being separated from their money.
I do not see much villainous mustache twirling from dealers, the consequences would just be too great for anyone with a business.
Like with all things use common sense especially when on a sales floor like a convention.
The substantial truth doctrine is an important defense in defamation law that allows individuals to avoid liability if the gist of their statement was true.
well myself im always looking for a deal...BUT when i buy i buy to keep not resell. im trying to leave something nice for my grandson .
I was being facetious.
Worry is the interest you pay on a debt you may not owe.
"Paper money eventually returns to its intrinsic value---zero."----Voltaire
"Everything you say should be true, but not everything true should be said."----Voltaire
My bad, I should have known. We need a sarcasm font.
Philippians 4:4-7
Wow that is a lot of sub categories.
I am a simpler fellow, if you are selling coins as the only way you put food on the table you are a coin dealer period. If you deal as a side hustle or for the fun of it then I would consider you a vest pocket dealer. Everything else falls into the flipper/hobbyist category for me.
I have met people from each group that are total slimeball carpetbaggers. And I have met people from each category that are good honest people. It's your morals and values that define you not what you do for a living or hobby.
My Collection of Old Holders
Never a slave to one plastic brand will I ever be.
Do you care? Yes go up to some guy who has paid a table fee to setup at a show spending his weekend there driving hundreds of miles with his inventory at risk or has an eBay store with hundreds of items paying fees keep it open and question (argue) if he is a dealer. Don’t be surprised if he gives you the 3 fingered salute.
A dealer is a person who makes (or tries to make) a living by dealing in coins. I believe that any of the other qualifiers are superfluous.
Mark Feld* of Heritage Auctions*Unless otherwise noted, my posts here represent my personal opinions.
What about the folks that do that, but can’t make ends meet, so they have day jobs? The “(or tries to make)” above, factors in many of the categories, doesn’t it? Doesn’t seem so superfluous to me.
Y’all were arguing about it in the other thread pretty good. So it seems like folks care, yes.
I personally care if they don’t have a licensed business. For many reasons.
Tldr
I figured folks would add to it as well.
No worries.
The IRS makes the distinction between hobbyist and "dealer". Personally, call yourself whatever you want. But there is a distinction between someone who sells dupes occasionally and someone who runs a business.
If you were selling Grandma's hoard, would you want a "professional dealer" or a Morgan dollar enthusiast who occasionally sells dupes? [Yes, those are your only 2 choices. ]
You see the market ignorance all the time in this forum when someone posts something and a bunch of people say "melt".
Not every hobbyist knows"the market" or needs to know. They have their niche and they know it. But they don't necessarily know other niches or how to effectively dispose of a collection.
What you described are part-time dealers.
Mark Feld* of Heritage Auctions*Unless otherwise noted, my posts here represent my personal opinions.
I think this. More or less. People resent the idea that just because someone pays $75 for a table he's entitled to buy from you at wholesale, or, rather, the same price you'd give to a dealer you've worked with for years.
To paraphrase Supreme Court Justice Potter Stewart - I can't define a dealer, but I know one when I see one.
By the way, what is "Tldr"?
You can usually identify them by the mustard stains on their shirts.
TL/DR is Too long. Didn't read.
Worry is the interest you pay on a debt you may not owe.
"Paper money eventually returns to its intrinsic value---zero."----Voltaire
"Everything you say should be true, but not everything true should be said."----Voltaire
SurfinxHI summarized much. Good post.
Some needs to learn that this post is not a laughing matter. Many stay up at night, thinking about this very subject.
Stolen valor seems to be a better topic than stolen coins.
Protect uneducated customers/buyers? A fool and his money?
Grandson .. nice sentiment. Your love is the most important gift.
Sarcasm classes being given at 10:00
Last time I put food on the table I spilled a bit on some coins. What does that make me? Don't say it.
I sell on E-Bay since I won't drive hundreds of miles and besides many of my shirts have mustard stains.
I try to make a living as a dealer, but due to my lack of connections, time devoted, and full time work and did I say lack of expertise?), I have failed. I don't even have a vest pocket.
Filing out my sales tax forms makes me wonder if I should become a collector / seller?
TLDR= I have vast amounts of time to read. However, I didn't do well on the English SAT's.
Selling my collection? I'm taking it with me. I might need to buy my way out.
I can't make a living as a real dealer but I can still be a part time dealer? A pro? No. They need to know something.
Since I have never been able to buy wholesale, I must be one of the "good guys"?
Some people spend their whole life trying to figure out who they are? In one post, I have finally discovered the secret.
You can call me Ray or you can call me J, just don't call me late for dinner.
Anyone who has a table at a coin show can claim to be a coin dealer. There are no qualifications. There are no requirements. No degrees are needed. No special education is required. No licenses are needed in most states. No B & M place of business is needed. In fact there are many vest pocket dealers that don't even rent a table at the show. They just go around to other dealers and buy and sell coins.
I get it. I feel similarly in my day job as a mechanic. Customers come in and say, I'm a mechanic too, I just need you to tell me what's wrong so I can fix it myself. I've spent several decades honing my skills. But I also consider the oil change guys/gals mechanics. Not on my level, but they are mechanics.
Just because I know how to plunge my toilet, doesn't make me a plumber.
Here is my take on it and some of the differences.
Yes being a dealer, or a collector for that matter takes some skills and training. Knowledge that has been earned over time and hard lessons learned. But.
Many dealers are self employed. They have to start somewhere and many small businesses start from home based businesses. We all can't go out and use our inherited money or take on millions of dollars in debt to start a coin business.
Some have to start small and slowly build inventory and connections and a customer base before diving in 100%.
Breaking into the coin business is tough. It takes connections, skills and lots of money. But IMO anyone who is trying to make a living, or is only/mostly buying coins to resell is a dealer. Part time, full time, wannabe whatever. Lot's of professional dealers like to look down on the wannabes or show dealers or vest pockets, but they all play a part in this.
My Ebay Store
All it takes is strong money, a display case or cases, enough inventory fill up the cases (currency can help fill the gaps if you don’t have many slabbed coins), electrical for lighting , a good cart to roll it all in from the car in one trip. Some numismatic knowledge does help. It’s exciting being a dealer. But after a slow show you will realize the value of your day job. Once set up with it all in display cases have some show free coffee and doughnuts. Or go visit the wholesaler at the show Pickup some nice slabs spruce up your case. I relish the thrill of the chase, the fantastic retail sale with all the bens flowing in. Or the super buying deal picked up. Dave Bowers book on how be a successful dealer along with some swanky biz cards, a plus. Remember to pad your initial ask price - they will try talk you down. Raw collector coins and banknotes marked up keystone can help pay expenses. Be ready to handle tire kickers, low ballers, or some know it all dunce. Don’t let their BS bug you. For the most part they don’t have any money anyway.
Being able to buy low / sell high a required skill. Sales savvy a plus. My strong background in accounting and analytical skills has come in handy in the coin biz. Work your angle. With my copy of the latest CDN Market report (retail based on CDN bid) can easily make my offer (pct of CPG) from my table. Guy set up next to me says it’s exciting like when he goes to his deer blind. Keep a straight face try not laugh at some of them, be professional, have some good RCI stories. As far as whether your a real coin dealer (based on some zero message board poster) do you care? I don’t.
Anyone can be a "dealer". That doesn't mean one has to be good at it. I would say that longevity is one key. How many try, find out the pitfalls / work required and shortly thereafter close up shop?
I remember back in 1985, I was trading options on the ASE, and a "newbie" came down to the floor whistling the song, "You have to know when to hold them, when to fold them" etc, on his first day. He folded quickly and disappeared.
In the late 80's I was telling our roofer that I'll get a ladder and clean the leaves off the roof. He told me not to get the ladder and he'll take care of it. Then, he politely told me that a man has to know his limitations.
If you had gotten on the roof and cleaned the leaves would you then have started calling yourself a roofer? Doubt it. Nor IMO should you.
If you had gotten on the roof and cleaned the leaves realizedand then decided "hey, I like it up here. I think I'll buy a truck, get a license and some business cards and advertise my services. But kept working your regular job until you could do it full time, Should you then call yourself a roofer. Yes, you should and all the other roofers in town would likely agree that you are a roofer. Maybe not a good or great or experienced roofer, but a roofer none the less.
With coins it seems that some "dealers" think that if you don't do it full time or have a million dollar inventory, you are not a dealer. I disagree. And I don't really care if they think I'm a dealer or not.
My Ebay Store
Actually, that isn’t true. Nearly every large show, and most regional shows require tax ID numbers and proof of business incorporation before you can get a table. Small local shows, well, that’s different. Vest pockets have no requirements on them, true, as they aren’t at a table.
"incorporation"? I don't think that's true, is it? You need to have a valid resale certificate in most states. There are a LOT of full-time coin dealers who aren't incorporated.
Resale license, record keeping, reporting of income and paying taxes, separate bank account for the business, being profitable.
You wouldn't call yourself a roofer, but you might call yourself a gutter cleaner...
But vest pockets do have to have
Or
And usually they will pay for early bird access to get in before the public.
My Ebay Store
This.
RIP Mom- 1932-2012
Personally, I dislike vest pocket dealers at shows if they are doing business with people walking the bourse.
So someone who cleans silver bullion? Haha.
My Ebay Store
I agree they should not be dealing with the public if they don’t have a table and most shows I attend don’t allow them to. But many know each other and deal with each other in show outside show online. As long as they aren’t breaking the promoters rules and or poaching customers from other dealers.
That being said, when I used to set up at Long Beach a very well known and loved dealer that posts here frequently used to poach customers from in front of other dealers tables pretty regularly. Call them out here and likely get shunned from the elites for good
My Ebay Store
You are what you eat. Check for mustard stains.
Vest pocket—reminds me of my uncle walking the trade lot in Marion, NC with a coat full of watches, gemstones, silver dollars, native artifacts, or pints of whiskey. He hustled the guns from the boot in the parking lot.
That was an autocorrect for the word inception. Proof of business existence, etc.
No show that I know of requires "proof of business existence". Small shows do not require anything. Anyone can display or sell or buy coins if they rent a table. I am on the east coast-maybe things in California are different. I have never been to California. Coin shows are usually run by local coin clubs and they want to rent tables, they do not care if you have a business or not. I do not have a coin business and I used to rent tables. The only requirement is that I pay rent for the table space.
I've has to show my tax ID and articles of incorporation for large and regional shows. But non have been east of the Mississippi River. The one time I did FUN, I shared a table. Your experiences might be different, or perhaps your show organizers are not worried about their liability.
I have had to give my state sales tax number at times.
Sometimes after setting up may put up my green sign if coming loaded “cash paid for certified coins.” Generally paying 10 pct behind CDN Bid. A line formed shortly after one show opened and after about a couple hr or so had to take it down as spent all my buying cash lol. But did get some nice pickups.
I never attended a coin show. If I did and rented a table, I would imagine I would need a ...
Cash for clunkers sign?
When I read the thread title I initially thought of someone passing out cards to players at a table.
Example below.
But then, not to be.
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https://youtube.com/watch?v=_KWVk0XeB9o - Ruby Starr (from 'Go Jim Dandy') Piece Of My Heart
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https://youtube.com/watch?v=D0FPxuQv2ns - Ruby Starr (from 'Go Jim Dandy') Maybe I'm Amazed
RLJ 1958 - 2023
I think it is going to far to specify that the profits (if any) are contributing to making a living. Perhaps there are some doing it as a second job or retirees doing it for extra income. I wouldn't exclude either just because they don't need the income to pay their bills.
I live in Pa. Coins and bullion sales are no longer taxable here (they were at one time), so you don't need a tax ID anymore for coin or bullion sales. Show organizers are not responsible for what dealers do. Liability for what?
I also believe in the mustard stain test
Collectors who rent tables at small local coin shows to buy and sell coins can be considered to be coin dealers in my opinion. They are part time coin dealers rather than full time coin dealers but they are still coin dealers. I even consider vest pocket coin dealers to be coin dealers if they are going from table to table at coin shows to buy and sell coins for a profit. The bottom line is if you buy and sell coins for a profit, you are by definition a coin dealer.
Worry is the interest you pay on a debt you may not owe.
"Paper money eventually returns to its intrinsic value---zero."----Voltaire
"Everything you say should be true, but not everything true should be said."----Voltaire
I think for the PNG day ,,,,8/7/2023 ( before the WFOM) a tax license is required to set up a table and/or attend.
Dealers only at this show!
Not so at the actual WFOM 8/8-8/12...
I give away money. I collect money.
I don’t love money . I do love the Lord God.
Show organizers could be civilly liable. That's for a court to decide. That's why the better run shows have contracts and require documentation.