Do you prefer to acquire your coins from dealers or from auction houses? Why?

scoobydeux · December 10, 2008 12:41PM

In principle my attitude has been that it really doesn't matter, as long as I can procure the coins that fit my collection. However, it occurred to me the other day that most of the "numismatic tuition" that I've paid has been from mistakes on coins acquired from auction, while most of my solid scores have been purchases from dealers. At first blush, I thought the obvious difference here is that these bids have been on coins that I hadn't had the good fortune to view in hand before the auction. Undoubtedly, this is a significant factor. On deeper reflection however, it occurred to me that I really don't enjoy the whole auction process--the 3 week period of "preview" is just a bore for me, the competitive factor just doesn't get my juices flowing, and the temptation to emotionally pay stupid money in the heat of the moment is quite frankly, in my opinion, inane. On the other hand, I like the personal touch that occurs when buying from a dealer--the exchange of ideas, opinions, and expertise can be quite illuminating. I'm not too good at haggling and I really don't enjoy that aspect of the encounter, but you really can't beat a solid refund policy for a coin that you've purchased by photo online--the ultimate insurance policy, if you will. Furthermore, working with a dealer provides the possibility of creating a relationship , so that the dealer can look out for you once he knows what type of material you are looking to add. The real irony for me after all is said and done is that my single best deal was won at auction (from eBay no less!), but in general I would argue that dealers have been much better to me than auction houses.

Any thoughts would be appreciated...

tightbudget · December 10, 2008 12:43PM

Auction houses. I sometimes find that dealers get their inventory from auction houses, which makes the auction house a middleman. Usually, buying from the middleman leads to the best prices. But one con is that unless you're at the auction, you don't get to see the coins in person.

EagleEye · December 10, 2008 1:17PM

Buying from a dealer has many more advantages besides getting the right coin. It also means getting a two-way relationship that you can use when you want to sell.

Bayard1908 · December 10, 2008 1:21PM

<< Buying from a dealer has many more adavantages besides getting the right coin. It also means getting a two-way relationship that you can use when you want to sell. >>

You'd be selling at a loss, unless the market has gone up significantly since your purchase, even assuming that the dealer is honest and has low margins.

I'd rather buy from an auction and cut out the dealer entirely.

MikeInFL · December 10, 2008 1:21PM

In general, dealers, because I have the right to return the coin, and I don't get to preview the vast majority of auctions coins in-hand. That doesn't mean I don't bid on coins in auction, but rather that I prefer to work through a dealer. Rick's point is also a very good one -- it is generally much easier to sell coins back to the dealer you bought them from and the offers tend to be more fair.

Unknown · December 10, 2008 1:22PM

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MikeInFL · December 10, 2008 1:27PM

Realone, That's a good point -- the key is finding the right dealers to work with. However, here's a corollary that I'll offer -- generally, the best dealers to buy from aren't the best dealers to sell to. I'll let you read into that comment whatever you want, but it was not meant as any disrespect to any dealer, but one of the realities of the coin game (at least how I see it). Have fun....Mike

FatMan · December 10, 2008 1:31PM

It depends on the coin, the auction, and the dealers. With the expansion of online auction capabilities in the past 10 years auctions have moved from a wholesale pricing closer to retail pricing. I just don't find the bargains in today's auctions that I found 10 years ago. In many cases better coins can be purchased at lower prices on the bourse or from your favorite dealer.

lkeigwin · December 10, 2008 1:37PM

<< It depends on the coin, the auction, and the dealers. With the expansion of online auction capabilities in the past 10 years auctions have moved from a wholesale pricing closer to retail pricing. I just don't find the bargains in today's auctions that I found 10 years ago. In many cases better coins can be purchased at lower prices on the bourse or from your favorite dealer. >>

So true, so sad.

Bayard1908 · December 10, 2008 2:31PM

<< It depends on the coin, the auction, and the dealers. With the expansion of online auction capabilities in the past 10 years auctions have moved from a wholesale pricing closer to retail pricing. I just don't find the bargains in today's auctions that I found 10 years ago. In many cases better coins can be purchased at lower prices on the bourse or from your favorite dealer. >>

Years ago you had to travel to the auction site for inspection. Other than the locals, the only people normally doing this were dealers who travel the show circuit. Now you can bid from your home or office. Auctions are great.

19Lyds · December 10, 2008 2:32PM

Auction houses because then I only have to haggle with the other bidders before they even know I'm haggling!

CoinJunkie · December 10, 2008 2:33PM

Everything else being equal, the dealer, hands down. You see a coin you want and
within a few minutes you own it.

Unknown · December 10, 2008 2:37PM

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Barndog · December 10, 2008 2:42PM

right coin at the right price, matters not where it comes from.

That being said, relationships form the basis for present hobby enjoyment and future hobby enjoyment, so if real people are involved in the transaction, all the better.

EagleEye · December 10, 2008 2:45PM

I think with all the pitfalls associated with buying the sludge being spat out in auction after auction, you either need to read the images real good or go to lot viewing in person.

scoobydeux · December 10, 2008 3:52PM

<< Realone, That's a good point -- the key is finding the right dealers to work with. However, here's a corollary that I'll offer -- generally, the best dealers to buy from aren't the best dealers to sell to. I'll let you read into that comment whatever you want, but it was not meant as any disrespect to any dealer, but one of the realities of the coin game (at least how I see it). Have fun....Mike >>

A number of good points have been made here. It's a bit like marriage--a good relationship provides exponentially greater potential, but with a bad relationship, you're better off divorced.

tightbudget--I fully agree. There's no question that many dealers buy from auctions and thus, the auction houses function as sort of a middleman. I think that this is what makes it so difficult to get a "deal" from auctions as you're competing against collectors as well as dealers. either way you wind up paying retail or more to get the good stuff.

MikeinFL--you caught me off guard with your comment. I hadn't supposed that there were "buy from" dealers and "sell to" dealers. Could you elaborate on this point? Why do you suppose that this is so?

MikeInFL · December 10, 2008 4:10PM

<< MikeinFL--you caught me off guard with your comment. I hadn't supposed that there were "buy from" dealers and "sell to" dealers. Could you elaborate on this point? Why do you suppose that this is so? >>

The thought is essentially this: Good dealers to buy from are generally those with good eyes and/or low margins. Good dealers to sell to rely heavily on the slab and/or sell at higher margins (thus can pay higher). Said in a slightly different way, you want to buy from generalists and sell to specialists. Of course there are exceptions to these rules, but I think you will find them true more often than not.

Bayard1908 · December 10, 2008 4:16PM

<< There's no question that many dealers buy from auctions and thus, the auction houses function as sort of a middleman. I think that this is what makes it so difficult to get a "deal" from auctions as you're competing against collectors as well as dealers. either way you wind up paying retail or more to get the good stuff. >>

No, the dealer is the middleman in this situation, not the auction house.

COALPORTER · December 10, 2008 4:37PM

<< Buying from a dealer has many more advantages besides getting the right coin. It also means getting a two-way relationship that you can use when you want to sell. >>

Really? I have aucion houses call me all the time, and I've never met any of them. On the other hand, I had dealers (whom I've bought at least a dozen coins) refuse to even look at coins or offer really low (blue sheet ) prices.

scoobydeux · December 10, 2008 5:01PM

The thought is essentially this: Good dealers to buy from are generally those with good eyes and/or low margins. Good dealers to sell to rely heavily on the slab and/or sell at higher margins (thus can pay higher). Said in a slightly different way, you want to buy from generalists and sell to specialists. Of course there are exceptions to these rules, but I think you will find them true more often than not. >>

MikeinFL--this is a very interesting insight. that I'll need to chew on it for a while. Thanks very much for sharing it!!

scoobydeux · December 10, 2008 5:07PM

<< 

<< There's no question that many dealers buy from auctions and thus, the auction houses function as sort of a middleman. I think that this is what makes it so difficult to get a "deal" from auctions as you're competing against collectors as well as dealers. either way you wind up paying retail or more to get the good stuff. >>

No, the dealer is the middleman in this situation, not the auction house. >>

Right. In this scenario, the auction house is the wholesaler, and the dealer is the middleman--right label, wrong subject! Thanks or pointing this out

. In any case, my point remains the same--that there is an extra layer of exchange between the collector and the coin, resulting in a higher price paid by the collector.

MikeInFL · December 10, 2008 5:14PM

<< The thought is essentially this: Good dealers to buy from are generally those with good eyes and/or low margins. Good dealers to sell to rely heavily on the slab and/or sell at higher margins (thus can pay higher). Said in a slightly different way, you want to buy from generalists and sell to specialists. Of course there are exceptions to these rules, but I think you will find them true more often than not. >>

MikeinFL--this is a very interesting insight. that I'll need to chew on it for a while. Thanks very much for sharing it!! >>

You are welcome, and thank you for the thought-provoking thread.

Please understand that the view espoused above focuses on the ability to buy low and sell high -- a bit more narrowly focused than most collectors are. That said, it could be argued (and I would tend to agree) that the higher-margin sellers tend to have the better coins, so by focusing too hard on buying low you will likely miss out on some great coins.

Just some food for thought, respectfully submitted...Mike

Unknown · December 10, 2008 5:19PM

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19Lyds · December 10, 2008 6:00PM

<< 

<< Buying from a dealer has many more advantages besides getting the right coin. It also means getting a two-way relationship that you can use when you want to sell. >>

Really? I have aucion houses call me all the time, and I've never met any of them. On the other hand, I had dealers (whom I've bought at least a dozen coins) refuse to even look at coins or offer really low (blue sheet ) prices. >>

Ditto from this Kiddo!

Elcontador · December 10, 2008 7:29PM

It's the coin & the price. Unless the dealer is a real filho de puta (I won't buy anything from someone like that), that's all that matters. I see so few coins that interest me at reasonable prices, I'll take them where I can find them.

abitofthisabitofthat · December 10, 2008 9:01PM

Dealers, in most cases. I think that a lot (half? maybe more?) of the stuff in a typical auction is stuff that sat in dealers inventory for too long, did not sell, and is dumped into an auction in the hopes that someone will overpay for it. If the coin was all there, it would have already been sold.

I do buy at acutions, but only when I can get to the lot viewing. I don't even trust anyone to represent me because I am very picky about what I like. A coin must have a certain look, and I have not found a dealer who would really understand what i am looking for. At shows, where I buy the majority of my coins, I can see it in hand, agree on a fair price, and take it home. I will not bid in an auction based on a photo, wait 3-4 weeks, and then be disappointed when it arrives.

I enjoy going to auction if I have had the chance to view the lots and decide what to bid on. It is a fun. But I usually do better buying on the bourse.

Longacre · December 10, 2008 10:19PM

I don't like to get my hands dirty at an auction, so I do my buying from a dealer. It gives the personal touch, too.

pmac · December 10, 2008 10:24PM

<< Buying from a dealer has many more advantages besides getting the right coin. It also means getting a two-way relationship that you can use when you want to sell. >>

Spoken like a true dealer. The statement is valid, though.

slinc · December 10, 2008 10:32PM

I've always preferred buying from a dealer as i have coin in hand but the dealer i've been going to for a couple of years seems to have expanded their operation and brought in new people, the last time i was there i asked the price of a coin and they pulled out coin values magazine and sited some inflated figure before coming down to a more reasonable price the whole thing rubbed me the wrong way so i'm looking for a new dealer. btw anyone know of any good dealers in the raleigh nc area?

7Jaguars · December 10, 2008 11:27PM

I think it depends on the situation/coin. A known rare coin coming up to auction may get a great price, but on the other hand there is a certain amount of collusion going on in the price it reaches. If you have a dealer that can negotiate with potential competitors for it you may get a better price than bidding for yourself (and I have gone this way to my benefit before), but generally if you buy from a dealer that got the piece into his stock from auction then you are going to generally pay more for his commission to buy the coin with other factors like cost averaging, storage, transportation, etc., etc. to be calculated into his price.

On the other hand, if the dealer got a large estate you may be able to get the coin at not a lot above wholesale (I have benefitted from this as well), and the coin may not have been "bid up". I have seen this with middle range rarity coins, not the allstars.

I think before asking this question, we ought to set up the scenario with what coin, preservation, provenance, etc....

PerryHall · December 11, 2008 12:46AM

Laura once said that many times coins sell for more at auction than better coins sell for on the bourse floor. I believe her.

scoobydeux · December 11, 2008 1:30AM

<< 

<< The thought is essentially this: Good dealers to buy from are generally those with good eyes and/or low margins. Good dealers to sell to rely heavily on the slab and/or sell at higher margins (thus can pay higher). Said in a slightly different way, you want to buy from generalists and sell to specialists. Of course there are exceptions to these rules, but I think you will find them true more often than not. >>

MikeinFL--this is a very interesting insight. that I'll need to chew on it for a while. Thanks very much for sharing it!! >>

You are welcome, and thank you for the thought-provoking thread.

Please understand that the view espoused above focuses on the ability to buy low and sell high -- a bit more narrowly focused than most collectors are. That said, it could be argued (and I would tend to agree) that the higher-margin sellers tend to have the better coins, so by focusing too hard on buying low you will likely miss out on some great coins.

Just some food for thought, respectfully submitted...Mike >>

Please understand that the view espoused above focuses on the ability to buy low and sell high -- a bit more narrowly focused than most collectors are. That said, it could be argued (and I would tend to agree) that the higher-margin sellers tend to have the better coins, so by focusing too hard on buying low you will likely miss out on some great coins.

Just some food for thought, respectfully submitted...Mike >>

Mike, again good point. This happens to be a new area for me as I have been very picky in the past, with the intent of holding for the long term. However, the recent confluence of some belt tightening (financially speaking) and my redirecting the focus of my collection threw me into the sellers forum. I had a really awful experience with consignment to a major auction house in the past, so this time I did a trade with a major specialties dealer. In the end he gave me a lot for the coins i put up, but I in turn, put up quite a bit for the coin coming my way. In general I don't suggest the "package deal" as it muddies up exactly what is being put up by whom for what and condenses the deal into one figure, but in the end I'm happy with the result.

scoobydeux · December 11, 2008 1:38AM

What are your choices, granted collectors are bidding up the coins at an auction, and typically a dealer will stop before a collector for fear of being buried when he goes to sell (unless he is reping a specific buyer), and this fellow collectors in a regard are the problem in auctions ie the competition. But what happens when a dealer does win a coin, then he adds his profit margin and if you then buy it from him you will again pay more. Either way collectors will be paying retail but at least you can put your max in at an auction and limit your cost, if you win then you did good, there is at least hope in an auction or excitement of the score I should say. I rather buy from an auction for the possibilities. Whomever wants it bad enough gets it. Heck I have seen dealers obviously when at auction and then add huge percentages to their cost immediately after, I rather take the risk of overpaying during the auction then after when it is in the dealer's hands. >>

I see your point. There is no question that the collector will will pay more in this scenario. My point is that there seem to less what "if's" when buying from a dealer--"what if this coin at auction is a languished dealer retread?," "what if I don't like it in hand?' etc. Also, amny coins don't go through the auction house mill to begin with, so if one only focuses there, you'll miss out on a lot of opportunities. On the other hand a lot of superior stuff winds up on the block...

RYK · December 11, 2008 1:51AM

My best and favorite coins were acquired from dealers, with few exceptions, and these exceptions were instances when a dealer was bidding on my behalf.

UtahCoin · December 11, 2008 1:57AM

I will (and have) buy anywhere. Pawn shop, garage sale, coin shop, auction house, ebay, whatever. As long as you know what you're buying, and the price is right, grab it.

mrearlygold · December 11, 2008 3:10AM

<< Buying from a dealer has many more advantages besides getting the right coin. It also means getting a two-way relationship that you can use when you want to sell. >>

With the keyword being "relationship", as evidenced by another thread where a fellow is apparently emboiled in a generic gold deal that isn't working out.

I can cite MANY deals that are similar including a very recent million dollar double eagle deal that the buyer is getting crushed on.

Nysoto · December 11, 2008 4:32AM

No preference for a dealer or auction. If much of the dealer's inventory is from auction, it would be best to have that dealer represent you, to avoid bidding against the dealer.

If part of the dealer's inventory is non-auction sources, you can sometimes get very nice coins for less than auction prices. Some of my best coins have come from dealers at very good prices. With auctions, you generally pay market prices.

AnkurJ · December 11, 2008 4:56AM

Dealers. There is no buyers premium....technically..

OKbustchaser · December 11, 2008 5:19AM

Any time a collector wins a lot in a major auction it is because one of two things happened. Either you paid fairly close to full retail (or more) and therefore the dealers dropped out or you got stuck with a coin that no dealer wanted to put in his case. It really is pretty much that simple. You are almost always better off either buying from a trusted dealer's stock or at the very least having said dealer rep you at the auction.

scoobydeux · December 11, 2008 5:29AM

<< Any time a collector wins a lot in a major auction it is because one of two things happened. Either you paid fairly close to full retail (or more) and therefore the dealers dropped out or you got stuck with a coin that no dealer wanted to put in his case. It really is pretty much that simple. You are almost always better off either buying from a trusted dealer's stock or at the very least having said dealer rep you at the auction. >>

Okbustchaser--I think you hit the proverbial nail on the head.

Elcontador · December 11, 2008 6:00AM

<< Any time a collector wins a lot in a major auction it is because one of two things happened. Either you paid fairly close to full retail (or more) and therefore the dealers dropped out or you got stuck with a coin that no dealer wanted to put in his case. It really is pretty much that simple. You are almost always better off either buying from a trusted dealer's stock or at the very least having said dealer rep you at the auction. >>

Usually, but not always. If you are buying an esoteric coin for your collection, you can sometimes get it for a reasonable price @ an auction. A dealer can't turn such a coin quickly, they often will not bid strongly for it, if at all. It is possible to get such coins much cheaper at auctions.

Case in point. In 2002, I got an 1899 Liberty Nickel in PC 6. The coin was accurately graded, and was not a shot coin. But what made the coin special was its toning. Business strike Liberty Nickels are rarely attractively toned. This one had subtle toning ranging from apricot to rainbow and is the second most nicely toned Liberty Nickel I have ever seen. I got it for type money.

FullStepJeffs · December 11, 2008 6:05AM

90% from auction houses, 10% from dealers or sellers. Not too many dealers play in my field, but the hoard keeps getting larger.

Steve

roadrunner · December 11, 2008 6:18AM

Dealers. There is no buyers premium....technically....

Techically, the seller pays the "buyer's fee." There are no extra fees at auction other than mailing/insurance costs. You are willing to pay what the coin is worth to you, and then divide that gross cost by 1.15 to get your max bid. Voila...all fees borne by seller.

I basically agree with OKBustchaser on this too. Having a top notch dealer with great eyes and a good sense of pricing, is the best way to go. The 5% commission is a pittance for all the traps than will be avoided. Plus your long term gains will be much higher by buying the right coin at the right price rather than buying a clunker coin at a "great" or bargain price. Buying a 65.5 coin rather than say a 65.3 coin could make all the difference in the world down the road. This can be extrapolated to all grades/quality of coins.

roadrunner

HarleyWookie · December 11, 2008 6:21AM

Here's a funny example of the generalist / specialist thread....

http://www.stacks.com/lotdetail.aspx?lsid=AN00000669&asid=AN00000191&lrid=AN00116678
Frosty lustre. The strike is about average with some softness noted at the tips of the feathers in Liberty's headdress. Close examination reveals a few trivial flecks on both surfaces. Accompanied by an Eagle Eye Photo Seal certificate. The 1909-S is notable for having the lowest mintage of any issue in the Indian cent series, just 309,000 examples; by comparison the celebrated 1877 has a production figure of 852,500 pieces—more than twice as many.

HarleyWookieNote: latest research indicates the mintage figures for the 77 are wrong and are closer to the 09S numbers.

$6,325.00

-------------------------------------------

http://www.indiancent.com/market/09sm65rdp05.jpg
http://www.indiancent.com/market/ind.htm
A beautiful full strike example with attractive luster. This is a veyr tough coin to find in gem full red. The coin is virtually mark free and a glorious example of the issue. Due to the planchet source, many 1909-S (and 1908-S) Indians are a paler straw color compared to the earlier Philly issues. This is the case with this coin. I point this out because not every one has actually seen a real full red 1909-S. Here is your chance.

$7500.00
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looks familiar doesn't it.

Even when specialist leave their mark, i.e. photo seal, people sometimes miss it. I guess stacks would be the generalist here.

Disclosure: I'm not the buyer (coinsignor) or seller or buyer again. I did see this coin in person. It tells me that both rick and stacks take pretty decent pictures of their coins.

scoobydeux · December 11, 2008 6:35AM

Thanks for the comments

Do you prefer to acquire your coins from dealers or from auction houses? Why?

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