Would you buy from a dealer that marks up his items by 14% ...how about 25%

ScarsdaleCoin · April 28, 2006 10:07AM

Interestingly enough...I bet the average coin dealer would be very happy to mark up between 5-10%......notice the quote from a leading business magazine that quotes Costo...a big discounter with a 14% -15% markup and other stores 25% to 50% ......Hey anyone bring a greysheet when they buy milk?

At Costco, one of Mr. Sinegal's cardinal rules is that no branded item can be marked up by more than 14 percent, and no private-label item by more than 15 percent. In contrast, supermarkets generally mark up merchandise by 25 percent, and department stores by 50 percent or more"

tedssupply · April 28, 2006 10:18AM

5-10% mark up over graysheet? or what the dealer paid or has invested in the coin?

ScarsdaleCoin · April 28, 2006 10:22AM

people have the perception that if a coin cost $100 that a 5 to 10% markup is a lot.....but most dealers also have costs both brick and mortar or at least cost of show expenses.....it would be nice to take that into account....that if a dealer say he paid $100 and got $110 that he did not really make $10 bucks....because part of the $10 covers his costs.....

Russ · April 28, 2006 10:24AM

I don't care if a dealer marks up his coins 10,000%. What he paid is of no relevance. The only thing that matters to me is if I want the coin at the price he's asking.

Russ, NCNE

bestclser1 · April 28, 2006 10:26AM

<< I don't care if a dealer marks up his coins 10,000%. What he paid is of no relevance. The only thing that matters to me is if I want the coin at the price he's asking.

Russ, NCNE >>

I agree 100%.I will pay what i think a coin is worth to me.

DHeath · April 28, 2006 10:27AM

I would like to buy what I like for what I think it's worth, and for you to think you ripped my lips off and mounted them on the wall.

Myqqy · April 28, 2006 10:29AM

Markup doesn't mean anything to me either- what matters is if I like the price relative to the market and the qualities of the coin......

stman · April 28, 2006 10:33AM

Whenever a dealer starts telling me what they "Have" in a coin....... They can see my SIG line.
Show expenses? Staying at the Hyatt, eating at the best restaurants, limo to and from everywhere?

I had a "Dealer" tell me one time the reason his price was out of this world was because of his show expenses. He went on to say....
"I was only able to buy 3-4 coins at this show.... so I have to include my expenses." Hahaha He still has the coin after at least 6 months as well.

Coxe · April 28, 2006 10:35AM

It is irrelevant. I don't care the price history of a particular piece usually. The exception is if it essentially a flip and not a coin that is terribly competitive. If it was bought, say, in a public auction for $2,000 and immediate cash sale for $2,100-$2,200 seems fair enough to cover basic stuff considering essentially no flooring of the coin.

RYK · April 28, 2006 10:45AM

I will go against the group here and say that sometimes it does matter what the dealer pays for the coin and how much the mark-up is. If you are trying to define the market value of a coin that trades infrequently, knowing what the dealer paid in auction, for example, gives you an idea of the price support for that item, independent of what the price guides say. That said, if the coin is high quality and reasonably priced, it should not matter whether the coin was found on the bathroom floor of the convention hall, ripped from the widow, or bought at auction and offered for 5% mark-up (though I would prefer not to know about the widow

).

stev32k · April 28, 2006 10:47AM

<>

I agree. One does not know the dealers mark-up or loss when buying a coin or anything else. However, I think it would be very hard to stay in business with a 5 or 10% mark-up unless you could turn the inventory about 10 times a year - or if you only handled five, six, or seven figure coins.

The other way to make money would be to go into the auction business. Charge the seller a fee whether or not the coin sells and also charge the buyer a fee for the privilege of buying from you. That way you don't have any inventory cost. There is no way you can lose money if the coin sells for less than the purchase price - you didn't buy it in the first place. Seems like a "I always win - not matter what" business.

dizzyfoxx · April 28, 2006 10:47AM

A standardized mark-up is irrelevant when it comes to one-of-a-kind toned treasures. The dealer can usually ask whatever he/she feels it's worth based on its' uniqueness and "WOW" factor, and it will find a home.

Russ · April 28, 2006 10:49AM

<< The exception is if it essentially a flip and not a coin that is terribly competitive. >>

I once did an immediately flip, (same day), to a dealer of a pair of coins I bought for $250 and sold to him for $650. And, I didn't even have to cover hotel expenses.

Russ, NCNE

pharmer · April 28, 2006 10:49AM

Coin dealer markups are ridiculously low overall, plus they have to suffer fools. Can you imagine being in a business where the customer must OK your price, based upon what you paid?

Coxe · April 28, 2006 10:53AM

<< 

<< The exception is if it essentially a flip and not a coin that is terribly competitive. >>

I once did an immediately flip, (same day), to a dealer of a pair of coins I bought for $250 and sold to him for $650. And, I didn't even have to cover hotel expenses.

Russ, NCNE >>

Did that a few times at shows. Cherried a VAM and found a 7/8 strong 1878 Morgan in a 7TF Rev 78 holder at one dealer (who knows a lot better), took them to NGC for attribution (ten bucks a coin), got them back in the afternoon, sold them for a nice profit.

But it is a little different form a public auction where both the seller and buyer know the price and that it was like yesterday.

Tarmac · April 28, 2006 10:57AM

Apparently many people do!

I just shake my head when I see a coin purchased at major auction only to be offered on eBay or show at a 33% markup. It really is unFair to Trader like that and it leaves me Blue these people wanting Moon money.

Steve27 · April 28, 2006 11:01AM

I would love to pay 25% over what a dealer paid for his coins; got a 1916-D Merc in G-4 for $500?

michael · April 28, 2006 11:24AM

Would you buy from a dealer that marks up his items by 14% ...how about 25%??

absolutely!!

if i like it in hand sight seen and if i break it out of its holder and it is worth the same or more than in the holder

michael · April 28, 2006 11:25AM

when you buy coins in holders you got to ask yourself would i pay this much for this coin out of its holder??

if NOT then you are playing a dangerous game

Bochiman · April 28, 2006 11:28AM

<< 

<< The exception is if it essentially a flip and not a coin that is terribly competitive. >>

I once did an immediately flip, (same day), to a dealer of a pair of coins I bought for $250 and sold to him for $650. And, I didn't even have to cover hotel expenses.

Russ, NCNE >>

Yeah, but after bending him over like that, he might have thought having the hotel covered would have been nice.....

BAJJERFAN · April 28, 2006 12:33PM

Firstly many folks confuse markup with profit neglecting the fact that a dealer has expenses too. Secondly I would prefer not to know what the dealer's markup is as I would be pissed if I thought it was excessive.

SDCollector · April 28, 2006 1:15PM

The other part of the equation is volume. The Costco analogy doesn't work for coins because the volume is totally different.

construct · April 28, 2006 1:33PM

Dealers seldom tell me what they paid for the coins I buy. A couple have told me in response to my counter-offer when it was under what they paid. Another dealer regularly sells to me at 10% over his cost when I see something I like. They are the rare exception. I generally don't really care what they paid.

BlindedByEgo · April 28, 2006 1:40PM

I think that a buyer should pay the lowest price negotiable for the coin desired, and that a dealer should sell at the highest price that the market will bear.

That's called an open market... Fair trade... Capitalism.

Anyone who thinks different is a commie.

BAJJERFAN · April 28, 2006 1:46PM

<< A couple have told me in response to my counter-offer when it was under what they paid. Another dealer regularly sells to me at 10% over his cost when I see something I like. They are the rare exception. I generally don't really care what they paid. >>

I guess it means then that you believe what they tell you and they are not blowin smoke up your ass. You can generally get an idea of what a dealer says is true by keepin yer eyes and ears open when they are a dealin with each other at a show.

roadrunner · April 28, 2006 1:47PM

Most of the major league retailers work on 15-30%. 20-25% is quite routine. While all of us would be happy to pay a 20% markup for a coin that is underpriced by 50%, that happens rarely. Usually that 20% markup is applied to coins that are fairly available or replaceable in the market. And therefore the 20%+ markups are too stiff as rule imo. There are exceptions but most follow that rule.

I concur with RYK that what someone else paid comes in very handy and is a useful tool when you get into areas of the market that you are not a specialist in. And opportunities come along where either you buy something right then and there or you lose the chance.
While I don't need that information when buying seated material as a rule, having a relationship with a seller in areas that you are not as sharp in is very helpful. If you know said dealer rarely overpays, or gives you fair deals you are often more apt to take that chance when your gut says go, but your research is lacking or can't be verified at that precise moment.

roadrunner

fountainheadgold · April 28, 2006 3:42PM

It does not matter if a dealer paid $10.00 for a coin if it is worth 600.00 then good fortune to him. one should not count other peoples money

PerryHall · April 28, 2006 4:38PM

<< I don't care if a dealer marks up his coins 10,000%. What he paid is of no relevance. The only thing that matters to me is if I want the coin at the price he's asking.

Russ, NCNE >>

Bingo!!!

BAJJERFAN · April 28, 2006 10:07PM

If a dealer knowingly ripped off some little ol lady or similar nimrod and tried to sell it for 10x or 20x over his cost I think that I mite care what he paid for it. Then again its not very likely that most dealers will be able to buy a 89-o PCGS ms64 Morgan for $25 either so on a coin like that you can guess fairly closely what they "have in it".

Atlantic · April 28, 2006 10:39PM

<< I don't care if a dealer marks up his coins 10,000%. What he paid is of no relevance. The only thing that matters to me is if I want the coin at the price he's asking.

Russ, NCNE >>

I agree with Russ

BAJJERFAN · April 28, 2006 10:44PM

I would say that this is a case of what you don't know won't always hurt you and in most cases you are better off not knowing.

291fifth · April 28, 2006 10:59PM

I have no way of knowing what the dealer paid. It is of no relevance to me.

stev32k · April 28, 2006 11:21PM

Just a few months ago I tracked a group of eight coins that an ebay seller had purchased from Heritage. Out of that group only two sold for more than the dealer paid, but the price for those two brought the overall total for the group to just over 4% more than the purchase price. After he paid ebay and paypal I expect he lost money.

roadrunner · April 28, 2006 11:31PM

The same llogic that works at auctions (hey, I'm bidding against dealer X on this lot, glad he was just under me, we saw it the same way so what's 5% more)......also works on the bourse the same way. And frankly, it shows up far more often than you think. To those that have no interest in what they pay, only in what they like, this argument is of course meaningless to them. I have no problem with those who want to pay 15-25% over wholesale for coins. If that didn't occur then finding them at -5% to +5% over wholesale would be all that more difficult.

While technically irrelevant, in many cases it helps make the deal.
Of course I'm speaking on wholesale transactions which imo make up more than 50% of the total deals out there. Pricing information is one of the most valuable commodities out there. As a rule the dealers have it and the collectors don't. The collectors wanted the grey sheet, they got it. But most of the values on it lag the market or are puffed up. Hence, dealers still have a lock on pricing power.

roadrunner

mr1931S · April 29, 2006 12:20AM

Does the pizza lover really care how much he has to pay for his favorite that is always delivered to him hot and fresh?

RYK · April 29, 2006 12:25AM

Does the pizza lover really care how much he has to pay for his favorite that is always delivered to him hot and fresh?

Pizza is consumed. Coins are held and eventually traded and sold. I guess if it does not matter to you what the coin will later be worth to the next owner, it should not matter what the coin was worth to the person who purchased it before you, either.

pharmer · April 29, 2006 12:29AM

<< If a dealer knowingly ripped off some little ol lady or similar nimrod and tried to sell it for 10x or 20x over his cost I think that I mite care what he paid for it. Then again its not very likely that most dealers will be able to buy a 89-o PCGS ms64 Morgan for $25 either so on a coin like that you can guess fairly closely what they "have in it". >>

You can't care in this case either, if you want to be consistent.

First off, this oft-repeated scenario is the rarest of transaction possibilities (are there really that many rich, stupid little ol ladies?) no matter what the coin posse claims.

Second, the price to the usual, reality-based customer is goign to be the market price, whether the dealer himself got a rip (your scenario) or paid within 14-25% of his asking price.

You just can't go there. Pay what you're willing, and it works out for everyone.

BAJJERFAN · April 29, 2006 12:46AM

<< You can't care in this case either, if you want to be consistent. >>

I don't really need to be consistent as I don't believe that I have taken a firm stand one way or the other. I'm just playin devil's advocate and throwin out ideas and stirrin the pot.

<< (are there really that many rich, stupid little ol ladies?) no matter what the coin posse claims. >>

Well I would guess that there probly aren't as many as there used to be, BUT there is probly still a fair number of suckers out and about and no doubt as many sharks as there ever were.

TwoSides2aCoin · April 29, 2006 1:17AM

Q]The exception is if it essentially a flip and not a coin that is terribly competitive. >>

I once did an immediately flip, (same day), to a dealer of a pair of coins I bought for $250 and sold to him for $650. And, I didn't even have to cover hotel expenses.

Russ, NCNE >>

Yeah, but after bending him over like that, he might have thought having the hotel covered would have been nice..... >>

.... there is some funny stuff that keeps me sane here ~

I think a MARK- UP , no matter what percentage ....is NONE of our business as a buyer.
We really ought not to be privvy to mark- up. Everything is worth what someone is willing to pay.
The coin industry is only different because there is a sort of a MARKET CAP with price guides. But below that guide are shrewd business people, honest hard working people, crooks and idiots along with seasoned pros and even RICH people .... as well as kids.

Typically, a thirty percent profit is needed in a buy/sell business, just to cover overhead. Mark-up is irrelevant except to accounting practices, in my opinion.
Business practices in a capitilistic society is a FREE FOR ALL.
.... except it ain't free for anyone

... one thing pertaining to your post Jon.... I think most dealers ought to shoot for a thousand percent mark up. We are talking coins. That could put a red cent at ten bucks... or a thousand dollars for a silver dollar.... It's possible

and highly probable.

Russ · April 29, 2006 1:36AM

<< <>

Yeah, but after bending him over like that, he might have thought having the hotel covered would have been nice..... >>

Funny thing is that I really didn't bend him over. He sold the coins at a profit. It was the dealer I bought them from that got bent over.

Russ, NCNE

MikeKing · April 29, 2006 3:29AM

<< It does not matter if a dealer paid $10.00 for a coin if it is worth 600.00 then good fortune to him. one should not count other peoples money >>

Agreed

roadrunner · April 29, 2006 3:56AM

This pricing question is relevant to the majority of coins bought for the normal % of FMV. It does not hold for rips or such oddities.

think a MARK- UP , no matter what percentage ....is NONE of our business as a buyer.
We really ought not to be privvy to mark- up. Everything is worth what someone is willing to pay.

I whole heartedly disagree. I work with sellers that routinely work on 5-10% on most coins. The ones that work on 15-30% as a rule don't get my business. Remember, dealers who do this full time have you over a barrel on what the current price is at that minute for the quality of your coin (in 95% of the cases). Those in the forum who have the skills and knowledge to compete or beat out dealers in their speciality are also exceptions. When you go to buy from the dealer 95+% of retail buyers cannot determine the value of the coin accurately enough, nor are able to define the real grade close enough within the assigned insert (MS 63.6 vs the MS63 label).

Hence it is crucial (if you want to maximize your spending dollars) to work with dealers who you know to work on smaller margins and deliver just as nice coins as the 25% clubbers. By monitoring their price lists or web sites over a period of time you can easily figure out what % they work on. If you have no interest in getting close to FMV when you buy, then you are a truly bonafide "collector" for which price has no earthly meaning. And if you consult a price guide or grey sheet from time to time, please excuse yourself from that category.

roadrunner

100proof1957 · April 29, 2006 4:33AM

dont forget that margin and markup are 2 different things !

but i gotta agree with Russ (did i say that ? )

if i want it ,it dont matter !

Coxe · April 29, 2006 6:02AM

OK. It really doesn't matter what the seller paid unless you are looking at normal bid/ask market maker pricing. If the dealer got a great deal and sold a coin to you at 50% profit but it was at bid, did you get ripped off? No. He would have been insane to pass on his fortunate buy to you deeper than that. I am not looking at the little old lady estate rippoff dealers. There are ones who found hidden value in a coin, bought while valuations were much lower, did an in-kind trade that resulted in that, cherried it from a roll, bag, mint set, ...

Would you buy from a dealer that marks up his items by 14% ...how about 25%

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