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What are the pros and cons of using a dealer to consign coins to a major auction house and...
RYK
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does anyone here have any experience with this?
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I have seen numerous instances in which clients who did it on their own, thought they had gotten excellent deals, when in fact, they had not.
A dealer might be able to make a couple of % points for himself and the client still end up doing better than if he had worked directly with the auction company. For especially good clients, the dealer might even forego any compensation and simply pass all of the savings onto the client.
The only "con" that quickly occurs to me is if the client goes through the wrong dealer and gets (pun intended) conned. For example the client needs to be sure the dealer wont misappropriate the coins, that the dealer will actually pay him upon receipt of funds from the auction house, etc.
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<< <i>How common is it for a client to go through a dealer to get to the auction house? >>
Longacre, you have asked a question that I can't answer as well as I would like to - "I hate it when that happens"
<< <i>(I assume the dealer does not take any risk on the transaction, but maybe I am wrong (if so, it would be great if you could comment on that as well). >>
The dealer does not (need to) take any risk. He is basically a middleman/facilitator who saves the client some negotiating, effort and $, while in effect, getting paid for doing so.
On the buying end I need a dealer to view the lots, describe them to me, help determine the most appropriate for my collection, and bid for me at the auction, pick up the coins, and deliver to me. I find that by far the most convenient way to operate.
On the selling end, I'm with Mark. I would expect the best deal to be delivered by a trusted dealer as well. If he takes a couple of points from the auction and still delivers a better than direct deal from the auction house, that just makes it better for both of us. I hope to be way more loyal to my trusted dealer(s) than with an auction house.
<< <i>Mark---You have a great reputation for fair and honest dealings. Wouldn't it be more financially advantageous for you and me to give you my coins on consignment and let you sell them for me and take a percentage of the procedes for your efforts? >>
PerryHall, thank you for your very nice remark.
In reply to your question - depending upon the type and quality of material involved, sometimes you would do better going through me or another dealer and other times you would probably come out ahead by consigning to an auction.
I believe that certain coins and coin types are well suited for auction, but that others are not. For example, if one has a particularly esoteric coin, unless he knows a dealer who deals in or knows others who handle that type of coin, the owner is usually better off going through an auction house. Likewise if one has a coin which looks like it might be under-graded, unless his dealer will pay or try to get strong PQ $ for it, the owner is probably better off putting it in an auction and hoping more than one bidder is willing to pay PQ $ for it.
On the other hand, if the coins are ordinary and thus likely to bring ordinary prices in auction, I see no reason to consign them to an auction house. Even for special coins, if the client's dealer handles that type of material, has the connections to get good $ for it, and is willing to work on a reasonable commission, there is no need to consign to an auction.
The bottom line is that a seller needs to look at what an auction house will charge vs. what a dealer will charge and what the upside and downside to consigning to an auction are, compared to working with a dealer.
There are advantages and disadvantages to each choice, so it's not always an easy decision to make.
For the collector that collects by series. Would you agree that in most cases some of the coins should go to auction, because of the date and mint mark, and some should be sold outright through a dealer, because they are common ? Your thoughts, for the masses, on the previous question.
Thanks.
Ken
Jerry
<< <i>I get 0% seller's commission with the auction house I consign to.* Also, Superior Galleries is part of the Stanford Financial Group. Consign through these guys Stanford Coin and Bullion and get 0% seller's fees and 0% buyback fees. >>
We've gotten as much as hammer plus 10%.
Thank you for the info, but when the time comes, I will have a dealer help me sell off my collection, via consignment to the dealer, consignment to the auction house, and/or direct sale.
RYK
<< <i>And you don't need a dealer to consign to a auction house to get good rates. I get 0% seller's commission with the auction house I consign to >>
Jerry, that means the auction house made (the buyer's commission of ) 15%. Depending upon the type and value of the material you had, you might have gotten MORE than 100% of hammer.
<< <i>For the collector that collects by series. Would you agree that in most cases some of the coins should go to auction, because of the date and mint mark, and some should be sold outright through a dealer, because they are common ? Your thoughts, for the masses, on the previous question. >>
Ken, my advice would be based upon not only the type and rarity of material, but also, whether the dealer you were considering consigning to had the right outlets for your coins.
I have seen numerous instances in which clients who did it on their own, thought they had gotten excellent deals, when in fact, they had not.
A dealer might be able to make a couple of % points for himself and the client still end up doing better than if he had worked directly with the auction company. For especially good clients, the dealer might even forego any compensation and simply pass all of the savings onto the client.
LOL - checkmate.
edit: Am I suppose to receive more than the hammer price?
I know you mean well, and I intend no offense but...
I would not consign coins to a firm where I would not buy coins.
Sometimes, cheap is dear and dear is cheap.
You will if you consign thru a dealer. He'll make a percent or two in return for directing your coins to the proper venue where they'll realize full value and you'll get a few percent over hammer.
<< <i>Am I suppose to receive more than the hammer price?
You will if you consign thru a dealer. He'll make a percent or two in return for directing your coins to the proper venue where they'll realize full value and you'll get a few percent over hammer. >>
No matter what the hammer price is?
Jerry
<< <i>Am I suppose to receive more than the hammer price?
You will if you consign thru a dealer. He'll make a percent or two in return for directing your coins to the proper venue where they'll realize full value and you'll get a few percent over hammer. >>
Fascinating. I never realized that.
So, hypothetically, let's say I have my dealer consign my collection to Heritage, and it hammers at $100K (not including the $15K BP). He can negotiate with Heritage, so that he gets $5K, Heritage gets $5K, and I get $105K, which is more than the mammer price.
Now, if I were to do it on my own, like Jerry, even if I don't pay any seller's fee, I still only get $100K, because Heritage gets all of the $15K BP.
Usually the amount paid over hammer is influenced by the quality and volume of your consignment. That's why dealers often get better terms; they consign a larger volume of coins, typically.
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I'm a died-in-the-wool collector, not dealer. I'm speaking to you as a fellow collector, not as a dealer like Mark Feld, who is one of the better dealers in the country, but a dealer nonetheless, and whence biased.
I used two different dealers for the sales, and both dealers realized far more money for me than I could have done on my own -- and they saved me an enormous amount of time and headaches in the bargain.
First off, they handled the negotiations. If you have a life of your own beyond numismatics, just the time they saved me right there -- the opportunity cost -- is an enormous benefit.
Second, they both got better deals than I would have on my own. They knew what to ask for -- and they asked for things I wouldn't have dreamt of asking for. For instance, they got special catalogs -- in addition to the ordinary catalogs -- printed and distributed for my collections. They got half-page ads for this coin and that, and full pagers for other coins.
Third, they set the reserves for me. Again, a monumental amount of work researching past sales on hundreds of coins and then matching them to my coins: This coin's premium quality, that one isn't, and they adjusted the reserves accordingly. Were the series hot or not? Again, they adjusted the reserves. Oh my gosh, what a nightmare of work it would have been for me -- weeks down the drain which I was able to apply productively to my family and business thanks to them.
Fourth, they were there, Johnny-on-the-spot at the auction, putting out last minute fires and generally facilitating things for me in manners I wouldn't have dreamt possible.
Fifth, how do I put this politely? Ummm, at least one of the auction houses (which will remain unnamed) has a somewhat unsavory reputation -- a reputation well deserved in my opinion. Their contract is 2 million pages of fine print -- that's an exaggeration -- but the point is that their contract contains more than one loophole through which they can really, really screw you. And from what I've read on the boards, they're quite willing to do just that when they want to.
But while they're willing to "pork" (their phrase, not mine) individual collectors like you and me, they hesitate at porking influential dealers who can damage them in return. So using an influential dealer to consign coins gives you an added layer of protection against much of the funny business that plagues the coin auctions.
Sixth, the deals they negotiated were both for more than hammer. In both cases, the dealers took as their fees the overage over hammer. So I got all these huge benefits, and I ended up with 100% of hammer -- which I would have been happy to get in the beginning.
The dealers I used were Warren Mills and his lieutenant Jon Rosenthal of Rare Coins of New Hampshire -- and Mitch Spivack, also known as Mr. Wondercoin on these boards.
I'm sure that many other leaders would serve you well in this capacity, including Kathleen Duncan (Pinnacles), Mark Feld (Independent), and Laura Sperber (Legend).
I hope this helps.
Warm regards on my next-to-last day on this trip in the states. Tomorrow -- back to Bangkok.
Just Having Fun
Thank you for the thorough and excellent response to my query.
I have a follow-up question: Does anyone (else) think that the Heritage Legacy program is their attempt to bypass the dealer middleman by offering some similar discounts and other goodies?