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How inappropriate is it to reveal a dealers markup on a coin?
CaptainRon
Posts: 1,189 ✭✭
After reading a couple of threads that briefly and or blatenly touch this subject, I was just curious on how others felt about it.
So how inappropriate is it to reveal a dealers markup on a coin?
I have seen some dealers and some ebay dealers brag after a coin has sold on what kind of a score it was for them.
For real high end coins it is pretty easy to do the research and figure out what a coin was bought for, then is being asked for. The 1913 that just sold for $4.15 million made headlines as to the profit that it made for the previous owner.
Why should a dealer be so upset that the public knows what he/she is making on a coin, for a lesser dollar amount coins. Does it really matter if it is a $900 coin, $15,000 coin, or a $4,150,000 dollar coin.
The bottom line is, would their greed or lack of greed of profit, hinder you from purchasing the coin.
Two examples are listed, for both examples, imagine any quality coin that would fit your collection, but use the same coin for both examples. Both coins cost the same price.
Example 1. If a coin was purchased for peanuts but being offered for as a premium quailty price, would that hamper you from making an offer on the coin.
Example 2. Just the opposite, if a dealer was known to pay a price for a coin, that is much closer to his asking price, would you be more apt to jump on it.
For me I would like to know what the coin was purchased for, regardless of which example it falls into, I think I really liked the coin I would purchase it. However, knowing what I can expect to get back for it, is mighty nice.
Thanks
Ron
So how inappropriate is it to reveal a dealers markup on a coin?
I have seen some dealers and some ebay dealers brag after a coin has sold on what kind of a score it was for them.
For real high end coins it is pretty easy to do the research and figure out what a coin was bought for, then is being asked for. The 1913 that just sold for $4.15 million made headlines as to the profit that it made for the previous owner.
Why should a dealer be so upset that the public knows what he/she is making on a coin, for a lesser dollar amount coins. Does it really matter if it is a $900 coin, $15,000 coin, or a $4,150,000 dollar coin.
The bottom line is, would their greed or lack of greed of profit, hinder you from purchasing the coin.
Two examples are listed, for both examples, imagine any quality coin that would fit your collection, but use the same coin for both examples. Both coins cost the same price.
Example 1. If a coin was purchased for peanuts but being offered for as a premium quailty price, would that hamper you from making an offer on the coin.
Example 2. Just the opposite, if a dealer was known to pay a price for a coin, that is much closer to his asking price, would you be more apt to jump on it.
For me I would like to know what the coin was purchased for, regardless of which example it falls into, I think I really liked the coin I would purchase it. However, knowing what I can expect to get back for it, is mighty nice.
Thanks
Ron
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Comments
42/92
Russ, NCNE
Do you mean , should you expect the dealer to tell you what they paid for a coin?? That's ludicrous. No one in any business should be asked to reveal what thier cost is. What business are you in where they do that??
Do you mean should someone reveal what some other dealer marks up thier coins? That's within thier right, even though they may be wrong on thier numbers.
<< <i>Personally, I don't care what a dealer paid for a coin. The only price I'm interested in is what he's asking for it. If I think it's worth the asking price, we do a deal. If not, we don't.
Russ, NCNE >>
Russ -
I like your buisness principles. "Either you buy it or you dont!"
TorinoCobra71
42/92
I paid the reasonalble markup while kicking myself for not bidding higher in the auction.
If the price is fair, I don't suppose it matters if he's taking a loss from his own mistake, or if he found it under the cushions of his couch is is making a killing.
If the potential buyer doesn't know what the coin is worth, and if he believes the seller knows what he is doing, the comfort of knowing the dealer's cost can enable an otherwise unlikely transaction.
Doggedly collecting coins of the Central American Republic.
Visit the Society of US Pattern Collectors at USPatterns.com.
Obviously, if the coin has been in one or more auctions, you can track the prices it has fetched, but you might want to be cautious about expecting to get a similar price when you sell it, because the same circumstances may not repeat themselves when you want to sell the coin.
Check out the Southern Gold Society
However, many times when I show coins that I want to sell, I have experienced dealers asking me how long I have owned the coins, where I got them and even how much I paid for them. All this before they ask how much I want for the coins. This both surprises me and does not surprise me. I assume that if I ask the same dealer how much he paid for a coin that I was interested in, he would not tell me and might just be offended that I asked.
Of course it would not be polite to loudly announce all of this information in front of a dealer's table. Certainly anyone who follows a speciality closely can look through somebody's inventory and know exactly where stuff came from and how much it cost. Such information should be used for one's personal use, or perhaps discretely shared with collector friends. That's as far as it should go.
That's a good point. When I was buying my first (what I would consider) expensive coin, the dealer showed me the Heritage auction from which he bought it (and what he would be willing to pay for it), which gave me an idea of my downside and made me more comfortable buying the coin.
I generally don't ask out of curtousy to the dealer I work with. However on my first big big coin purchase, boy I wanted to.
However instead of having to ask, they instead showed me what very few other examples of this coin that has come up to auction in the last few years, realized. There by easing my anguish of purchase.
Would I still like to know, hell ya....... Will I ask one day, probably not. If the person that sold them the coin told me before I purchased it, I'd like to think it wouldn't have mattered, and played against my decision.
Ron
"If the potential buyer doesn't know what the coin is worth..."
The very premise of your argument is flawed. If the potential buyer doesn't know what the coin is worth, he should return his wallet immediately to his pocket, go to a numismatic book dealer's table, buy the book, and learn what he is doing before potentially making a large and regrettable mistake.
MrHalfDime - It is your premise that is flawed. You assume that the buyer chooses to be as prudent as you choose to be. In fact, he may rationally choose to be less prudent.
Doggedly collecting coins of the Central American Republic.
Visit the Society of US Pattern Collectors at USPatterns.com.
MBT - To convince us that you're not overly cynical, please tell us what types of sales pitches you believe.
Doggedly collecting coins of the Central American Republic.
Visit the Society of US Pattern Collectors at USPatterns.com.
<< <i>Personally, I don't care what a dealer paid for a coin. The only price I'm interested in is what he's asking for it. If I think it's worth the asking price, we do a deal. If not, we don't.
Russ, NCNE >>
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
Dealers that know me well will either tell me exactly what they paid for the coin, or if not, will confirm or deny (usually the former) the range I mention about it. Usually, I'm familiar with what a particular coin should sell for.
If a dealer is asking PQ money for IMO a non PQ coin, that says he didn't buy it 'right,' or has an IMO an excessive markup.
As a practical matter, if an honest dealer buys a coin 'right' and / or wants to move a particular coin, he will pass a price break on to a good customer. The three coins I bought at Long Beach last week were acquired in this manner.
"Seu cabra da peste,
"Sou Mangueira......."
When you think about the fact that every coin on the market began at face value, your perspective might change. In the chain of ownership, whose markup/profit was proper/improper? What is the importance of revealing markup when all coins started at face value and are worth whatever the market will bare at the time of sale.
Oscar Wilde
Collect for the love of the hobby, the beauty of the coins, and enjoy the ride.
Clothes make the man. Naked people have little or no influence on society.
Many coins are overestimated all the time by dealers. I know I don't want to pay for a dealer's overestimation. While discussing a dealer's buy price may be taboo I see it as truth in advertising. The real issue is that across the board on average, the markups are on the high side of the so-called 10-20% "standard" markup. Lots of dealers venture into nether regions quite routinely. That's just the way the coin business works.
roadrunner
<< <i>Since I don't always have the time to track down what I want or need, a good dealer comes in mighty handy. I don't mind a person making a living off me if they provide a service that is needed. I didn't get to go to the big show in Baltimore, but my dealer did. He incurred costs while traveling for business and I benifitted from his trip. I paid what I thought was a fair price for the coins he got for me so where's the problem? The coins he picked up for me was a matched, sequentially numbered set of Columbia, SC Commems in MS 67. Henry Ford made a statement about a fair day's pay for a fair day's work. >>
This scenario makes me flinch. Dealers work for the sellers whoever they may be. I'm even skeptical if you had a written contract with the dealer specifically stating that he was the buyer's agent and would do all things consistent with the buyer's position. You can't ignore relationships between dealers, and the obvious fact that the larger the price, the bigger the commission.
For someone that specializes in a certain series, he/she will have far greater market knowledge that the typical dealer/wannabe.
Edit:I'm in the collector camp FYI.
~g
I'd give you the world, just because...
Speak to me of loved ones, favorite places and things, loves lost and gained, tears shed for joy and sorrow, of when I see the sparkle in your eye ...
and the blackness when the dream dies, of lovers, fools, adventurers and kings while I sip my wine and contemplate the Chi.
<< <i>Personally, I don't care what a dealer paid for a coin. The only price I'm interested in is what he's asking for it. If I think it's worth the asking price, we do a deal. If not, we don't.
Russ, NCNE >>
Agreed. It is as simple as that. What the dealer paid is irrelevant. Would you be willing to pay the dealer more (i.e. above fair market value) if he/she were taking a loss on the coin? I doubt it.
On an individual basis, No, the dealer is under absolutely no obligation to reveal what he paid for the coin.
To all of those who say that the only important issue is, "What am I willing to pay for the coin?" I would say, yes, that's true. But how do you arrive at that figure? For me, I want to know how much dealers are paying for that coin. I want to know the "margin" I'm paying because I work too hard for my money to overpay. And how do you learn that figure? Greysheets, talking to dealers. Often the dealer will volunteer the information about what he paid when I'm looking at a coin. It's also reasonable to ask if the dealer is comfortable revealing that information. I think more transparency in this hobby is a good thing. I also think it's a good idea to sell some of the coins you're collecting to get a real idea of what dealers are paying.
And I have absolutely no problem with dealers earning a reasonable margin. On an individual basis, it doesn't matter if a dealer paid $450 for that coin priced at $600, or if somebody give it to him for free.
<< <i>There's too much black-and-white thinking so far, so please allow me to muck things up a bit.
On an individual basis, No, the dealer is under absolutely no obligation to reveal what he paid for the coin.
To all of those who say that the only important issue is, "What am I willing to pay for the coin?" I would say, yes, that's true. But how do you arrive at that figure? For me, I want to know how much dealers are paying for that coin. I want to know the "margin" I'm paying because I work too hard for my money to overpay. And how do you learn that figure? Greysheets, talking to dealers. Often the dealer will volunteer the information about what he paid when I'm looking at a coin. It's also reasonable to ask if the dealer is comfortable revealing that information. I think more transparency in this hobby is a good thing. I also think it's a good idea to sell some of the coins you're collecting to get a real idea of what dealers are paying.
And I have absolutely no problem with dealers earning a reasonable margin. On an individual basis, it doesn't matter if a dealer paid $450 for that coin priced at $600, or if somebody give it to him for free. >>
Hello,
Oh, pricing; I'm probably in the minority, but since I'm a "conditional rarity" & eye appeal collector (simple I like the best looking coin in the bunch), I very loosely consider greysheet and what similar coins are getting. Since I'm very particular on what I'll buy, I realize I'm going to have to pay more than typical dealer-dealer pricing, but since I buy regularly, I should get below retail; I still really don't care how much he/she paid for it, my question is "did I get a good deal?"
In the last series I was collecting, there was a coin I bought at this one coin shop. The dealer bought it that morning & was walking through the front door (saw me and said) "I bought these". There were two coins (same yr & MM) I wanted, the dealer added 10% to his cost and sold me one (my friend said pick first & I'll get the other one)... not a bad return for this dealer, 10% ~in 30 minutes or so, except the coin retails for 10x (more or less) than what I bought it for (the dealer doesn't specialize in that series).
He was happy & I was happy with the deal.
Of course, if it's one of a kind or very rare... how bad do you want it?
~g
I'd give you the world, just because...
Speak to me of loved ones, favorite places and things, loves lost and gained, tears shed for joy and sorrow, of when I see the sparkle in your eye ...
and the blackness when the dream dies, of lovers, fools, adventurers and kings while I sip my wine and contemplate the Chi.
<< <i>Sounds like you sold a coin to a dealer and a while later you see the same coin in his case abd see how much he is asking for your coin! You want to tell others what the dealer paid for it, which would not be right! >>
Yeah, that's not cool.
I'd give you the world, just because...
Speak to me of loved ones, favorite places and things, loves lost and gained, tears shed for joy and sorrow, of when I see the sparkle in your eye ...
and the blackness when the dream dies, of lovers, fools, adventurers and kings while I sip my wine and contemplate the Chi.
Andy, this is simply doing your homework. If you are willing to pay a certain price, and if it is in the range of the dealer, then what's wrong??? If you don't know what a coin is "worth", why are you considering the purchase?
Keep a good tally of auction prices realized, for starters, and you can get "comps" on what you are looking at to buy. Of course this is not at all fool proof, but helps.
WHO KNOW'S WHAT A COIN IS "WORTH" ANYWAY??? Is it "worth" what you could sell it for? Can't be for what you buy it for!!
I wanted to buy the 1838-O Half Dollar (Heritage) for $350,000 with the juice. Reserve posted much higher. I thought it was worth $300,000!!!! Then proceeded to bid $450,000 withOUT the juice. Someone else went against me on the Internet, and thought it was worth $632,500.
<< <i>When I'm interested in a coin, the more I can find out about it, the more educated buyer I become. >>
I've spent a couple of million dollars on coins and I agree with this statement 100%. The more information I have, the better. If I know what a dealer paid for a coin, I have another data point - I know what somebody else (the seller who sold it to the dealer) thought it was worth too.
How many times have you heard a dealer tell another dealer how much he paid for a coin? I've heard it hundreds of times. For many, it is almost a standard dealer to dealer sales tactic. Why shouldn't you know?
That said, I cannot recall an situation where I did not buy a coin I wanted because I did not know what the owner paid for it.
roadrunner
Because I like the coin and I'd like to own it.
It frequently happens to me on the Darkside. I see something new, I didn't even know it existed, much less what it's worth, but I take a shot anyway because I just plain like it. And NO, I don't necessarily have to know what the dealer paid, but it does help.
Doggedly collecting coins of the Central American Republic.
Visit the Society of US Pattern Collectors at USPatterns.com.