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Dealer Distrust and the US Mint Product Market Boom...Cause and Effect?
FatMan
Posts: 8,977 ✭
Two themes have grown stronger on the boards over the past five years:
1. The Modern Market has grown substantially and the US Mint Product Market is booming.
2. Collector distrust of dealers in general has never been higher.
Just 7 years ago the mint could not give stuff away. The only sellout in years was the 2001 Buffalo dollar. Any US Mint product that was a winner became one because of lack of interest resulting in extremely low mintages. Now the prices are skyrocketing because of demand not seen since the SOL commem in 1986. Sell out after sell out.
Seven years ago moderns were collected my a small minority. One could always find some moderns on ebay but the supply was quite limited when compared to today's listings.
The fact is that seven years ago the primary source of coins was the traditional dealers. I see very few members here buying from traditional dealers today. From my point of view it seems like 90% of coin purchases posted on this forum are either US Mint Products, ebay purchases, or auction purchases. With the exception of the Specialist or High End Dealer, it looks like the traditional dealer has become the odd man out.
Is this the result of the attitude collectors have towards dealers. I was wondering if this was the impetus for move towards mint products and moderns. If not, what is behind the boom in the US Mint Product and Modern market?
Discuss
Edited to add a post I made below which helps clarify the thread.
1. The Modern Market has grown substantially and the US Mint Product Market is booming.
2. Collector distrust of dealers in general has never been higher.
Just 7 years ago the mint could not give stuff away. The only sellout in years was the 2001 Buffalo dollar. Any US Mint product that was a winner became one because of lack of interest resulting in extremely low mintages. Now the prices are skyrocketing because of demand not seen since the SOL commem in 1986. Sell out after sell out.
Seven years ago moderns were collected my a small minority. One could always find some moderns on ebay but the supply was quite limited when compared to today's listings.
The fact is that seven years ago the primary source of coins was the traditional dealers. I see very few members here buying from traditional dealers today. From my point of view it seems like 90% of coin purchases posted on this forum are either US Mint Products, ebay purchases, or auction purchases. With the exception of the Specialist or High End Dealer, it looks like the traditional dealer has become the odd man out.
Is this the result of the attitude collectors have towards dealers. I was wondering if this was the impetus for move towards mint products and moderns. If not, what is behind the boom in the US Mint Product and Modern market?
Discuss
Edited to add a post I made below which helps clarify the thread.
0
Comments
<< <i>It seems like the dealers are buying up all the mint products, before the public has a chance to order. >>
So it is not collectors buying directly from the mint bypassing the dealers? How are the dealers buying them all up? I thought the mint put limits to keep that from happening.
<< <i>
<< <i>It seems like the dealers are buying up all the mint products, before the public has a chance to order. >>
So it is not collectors buying directly from the mint bypassing the dealers? How are the dealers buying them all up? I thought the mint put limits to keep that from happening. >>
I have not idea, but I am sure a conspiracy is involved. When I get home from work on order-day, they're all gone.
I think the better statement is:
The more knowledgeable people are buying up the hot mint products before the less knowledgeable people find out what to buy.
The days of a dealer doing what you suggest with Mint products are over.
All Clicks are equal. Some clicks have more money behind them, true, but to the Mint, a click of the mouse is a click of the mouse.
This is how a dealer can effect a Mint product IMHO.
Just 7 years ago the mint could not give stuff away. The only sellout in years was the 2001 Buffalo dollar. Any US Mint product that was a winner became one because of lack of interest resulting in extremely low mintages. Now the prices are skyrocketing because of demand not seen since the SOL commem in 1986. Sell out after sell out.
Seven years ago moderns were collected my a small minority. One could always find some moderns on ebay but the supply was quite limited when compared to today's listings.
The fact is that seven years ago the primary source of coins was the traditional dealers. I see very few members here buying from traditional dealers today. From my point of view it seems like 90% of coin purchases posted on this forum are either US Mint Products, ebay purchases, or auction purchases. With the exception of the Specialist or High End Dealer, it looks like the traditional dealer has become the odd man out.
Is this the result of the attitude collectors have towards dealers. I was wondering if this was the impetus for move towards mint products and moderns. If not, what is behind the boom in the US Mint Product and Modern market?
Posted this in the opening post for clarity of thread.
<< <i>The more knowledgeable people are buying up the hot mint products before the less knowledgeable people find out what to buy. >>
Actually my local dealer had not a clue about the 3 piece 20th anniv sets; he dint even have ONE AFAIK.
As a US Gov't Employee it tickles me to death to see one of our branches actually making money instead of spending it like we do in DOD.
I like modern stuff and I'm pretty sure that every great coin in history was once modern crap.
John
Never view my other linked pages. They aren't coin related.
``https://ebay.us/m/KxolR5
<< <i> State Quarters and the Internet is my guess as to the surge in Moderns. >>
I agree that the Internet has played a role. But why has it favored moderns? There are many more coin sites listing classics.
<< <i>I've been buying mint products for the past seven years so when I break into the scene and buy a table at a show, I can trade some modern mint stuff for some classic stuff. And I might even get cash with the trade
Better be careful......if you sell a coin and make a profit, FatMan will hate you.....
LOL
<< <i>
<< <i> State Quarters and the Internet is my guess as to the surge in Moderns. >>
I agree that the Internet has played a role. But why has it favored moderns? There are many more coin sites listing classics. >>
All seriousness aside, the telemarketers who are driving the modern market are doing so because they can obtain them in quantity, and amortize their promotion costs over many units. We have sold six or seven 1909-SVDB's at retail this year, but to a telemarketer that is nothing. They want widgets they can get by the thousand, and nobody is going to buy up a thousand SVDB's so they can promote them. They can't find the good, old stuff.
TD
As far as distrust, my local dealer has liitle interest or expertise in the surging, piepline wave-speed movement of the Mint's sell-outs. One of my local dealers remains "stung" by the experience of buying a number of the 2006 Buffalos that he has had to sell near spot. This may be more of an "laymens" market, as you have noted in your original and "focusing" post, with the quickly vicious nature of ebay/US Mint (as I believe they have become joined at the hip) and it's ability to focus and drive a product.
I appreciate the the learning experience I've had in playing like a dealer with Mint without the risk and dedication to a brick and mortar nor the self-discipline it takes to make any bussiness float above the sea of competition.
Miles
David
I said 'people' which is a large set of folks of which Dealers can be a sub-set of
The coin market is large and diverse, with thousands of collectors who want to enjoy a hobby that has been around for decades.
To the same extent, there are today hundreds, if not thousands of small to mid-size firms that seek to carve out a niche for their chosen inventory.
Is the volume of mint products being sold directly to collectors caused by a distrust of dealers? No, I don't think so.
But with the ability to buy direct, a collector can by-pass the dealer, most of whom do not even deal in current mint products.
I feel comfortable in saying that most firms that are not merely vest pocket individuals would much rather have better than average coins from the following series, for sale at all times: Walkers, SLQ's, Mercs, Buffalos and Liberty nickels, Indian Head cents, Barbers, Seated, dated gold, Pl and DMPL Morgans, and last but not least Bust coinage of every denomination.
But they have not had a sufficient supply of such coins for several years. And most do not carry the Moderns, in the high grades directly from the Mint. So their inventory is slipping.
Thus, the collectors who desire these new issues go directly to the Mint, as their main source for buys. And believe they are getting the coins as cheaply as possible.
The question I would like see answered, is where will the re-sale of these PR/MS 69 and 70 coins be conducted, and what will the average collector then do? Only a few dealers want to buy these coins from collectors, and I see only a faint few show up in National auctions.
E-bay and Teletade are a source, but one day, it should be clear that these high volume(survival) commems, Silver eagles, Anniversary sets will never retain large dollar increases over time.
Those that say all coins were once Modern crap, fail to understand the likely high survival rate for Mint issues, not made for circulation, but for collectors to put away in their home safes, or as gifts for their children.
There will still be almost 300,000 2006 Proof Buffalo $50 in 68 or 69Dcam, 100 years from now.
Can't get that level of trust anywhere else. Certainly there are great dealers but scammers are getting much more sophisticated. If they can fool a guy who does this for a living, I'm toast.
Never view my other linked pages. They aren't coin related.
In honor of the memory of Cpl. Michael E. Thompson
Off the top of my head, NGC started grading them. Then PCGS and NGC started giving out the 70 grade. Then the Registry started. All of these were big factors. Then First Strike came into being and more money went to the grading companies and into modern sets.
Success breeds success. The big increase in prices in issues such as the 1995 W silver eagles, the Jackie Robinson commems, the 1999 silver proof set, were wake up calls. Collectors saw coins they could get directly without paying through the nose and that were going up in price. In some cases sky rocketing in price.
Another factor is that in the classic coin market, the range in prices is startling to most novices. The difference in price from low end wholesale to top end retail is often 100% for classic coins, sometimes more than that. Being novices, guess which price they get to pay when they buy, and what they often get when they sell? That alone is a big motivator.
At many shows, many dealers report 60%-70%-80%-90% of business is dealer-to-dealer. That often means a collector is paying one, two, three, five dealer margins before the collector takes the coin home. A lot of dealers talk about 5% to 15% margins, however, in many cases it is multiple dealers each making their percentage before a collector gets it. Add to the mix, the artificial/accelerated toning debacle, the wholesale dipping and stripping that goes on, and a lot of novices think they are much better off buying from the mint. They get a coin at the same price as everyone else (unlike the classic market where novices often pay 20% to 50% more than an experienced collector with connections). They get a coin that is totally original, with 100% certainty (something that no matter what classic collectors say, is a romantic notion for most classic coins).
The market has a way of correcting itself. The U. S. Mint will some day kill the golden goose and when it does, it will be a long dry spell for mint issues. It happened before that way, and will happen again that way.
With all the money to be made on flipping certain Mint products....especially in the year 2006 and 2007, even the dyed in wool classic collectors have jumped on board and started flipping. No better way to finance your classic collection than thru flipping moderns fresh from the Mint for double profit or more.
As for affecting the market, I know that all these Mint products has strained my coin budget to the point to where I am not buying the classic coins like I used to. It has even slowed my local coin shop purchases down to 0.
<< <i>I can't speak for anyone else but when I order something from the Mint I know what I'm going to get and I know it's going to be authentic.
Can't get that level of trust anywhere else. Certainly there are great dealers but scammers are getting much more sophisticated. If they can fool a guy who does this for a living, I'm toast. >>
And I find a lot of what the mint is putting out in silver well done and attractive.
and it sets us apart from practitioners and consultants. Gregor
I am in the same boat. kid in Northeastern University and sending coins to PCGS 20 at a time i am busted.
<< <i>Better be careful......if you sell a coin and make a profit, FatMan will hate you.....
LOL
CaptHenway, I know that was somewhat in jest as the winky would signify, but I do not understand the comment. If you have perceived this as an anti modern thread, or anti dealer thread that was not my intent. I am an avid buyer from the US Mint as well as a high dollar buyer from dealers. I have many dealers that I call my friends. Nothing makes me happier than to see prices go up and everyone making money. It just appears to me that in looking at the hot areas of market there has been a move away from the traditional dealer. I am just trying to gather opinion as to the reason, and if the primary reason is that collectors have tired of the traditional dealer MO, which is certainly jaded in distrust as posted so often on this forum.
Edited to correct grammer
Russ, NCNE
<< <i>It's not my fault. The mint hasn't gotten any action from me since 2002.
Russ, NCNE >>
They should bring out an anniversary AH Kennedy....LOL
BTW beautiful coin on the bay.
Wondercoin
As for dealers, I don't sense any increased distrust of dealers, even in today's market. However, I tend to deal with very, very few trusted dealers, so maybe I don't see what else is going on in the overall market.
Didn't wanna get me no trade
Never want to be like papa
Working for the boss every night and day
--"Happy", by the Rolling Stones (1972)