Should dealers provide more public details regarding their capitalization to attract more coins?

Longacre · January 20, 2009 11:52PM

Although I tend not to look at the ads in Coin World too closely, I do notice that a lot of dealers are always looking for fresh coins. That makes perfect sense because without new inventory and fresh material, they would have nothing new to sell.

I frequently read that Dealer X or Dealer Y has done "$10,000,000 in deals last month" or something similar. As a collector, the solvency of a dealer is very important to me, and I want to make sure that I get paid if I put coins in consignment or otherwise use a dealer to sell the coins for me. Other than a few of the big dealers, I really don't know how solvent or well capitalized the various dealers are.

Does anyone think that it would make good business sense for a dealer to publicly give more details about their capitalization, financial resources, and free cash flow in order to entice more collectors to sell to them? As I said, there are some dealers that I simply would not consider doing business with solely because I have no idea of their financial footing. Does anyone have any comments?

291fifth · January 20, 2009 11:55PM

How could such information ever be confirmed?

MrEureka · January 20, 2009 11:56PM

As I said, there are some dealers that I simply would not consider doing business with solely because I have no idea of their financial footing. Does anyone have any comments?

I did $185 million in sales last month and have $322 million in the bank. Wanna buy some coins?

SeaEagleCoins · January 21, 2009 12:17AM

<< As I said, there are some dealers that I simply would not consider doing business with solely because I have no idea of their financial footing. Does anyone have any comments?

I did $185 million in sales last month and have $322 million in the bank. Wanna buy some coins? >>

No... but will you adopt me?

BlindedByEgo · January 21, 2009 12:19AM

ABOUT THEIR CAPITALIZATION?

NO.

Coinosaurus · January 21, 2009 2:03AM

What do you want them to do, post their bank statements online?

These are not public companies, they can do whatever they want.

Folks in the middle of the dealer-dealer biz already know who can deliver and who can't, and who has a history of financial stability. Collectors with their ears to the ground also have some idea.

Buy me a drink in Baltimore and I'll fill you in further

mgoodm3 · January 21, 2009 2:09AM

<< I did $185 million in sales last month and have $322 million in the bank. Wanna buy some coins? >>

Hell, I did more than that in my coin photography division.

lathmach · January 21, 2009 3:37AM

<< As I said, there are some dealers that I simply would not consider doing business with solely because I have no idea of their financial footing. Does anyone have any comments?

I did $185 million in sales last month and have $322 million in the bank. Wanna buy some coins?MrEureka >>

Not really, Andy. I was just gonna hit you up for a loan.

Ray

bidask · January 21, 2009 3:43AM

Though I tend to do my business based on relationships, that is a very good question.

BlindedByEgo · January 21, 2009 3:55AM

Seriously speaking, pre-Madoff/ Lehman/ AIG et al, I sort of assumed that a large established business with a (seemingly) strong balance sheet insulated one from most risk.

I'm not sure that I trust much other than cash on the barrelhead or a check drawn on a large national bank with a branch nearby at which to cash it.

Consignment? Downright scary. Performance bond? What if you held one written by AIG?

ColonialCoinUnion · January 21, 2009 4:04AM

<< As I said, there are some dealers that I simply would not consider doing business with solely because I have no idea of their financial footing. Does anyone have any comments?

I did $185 million in sales last month and have $322 million in the bank. Wanna buy some coins? >>

It's like Gringots over there - big piles of gold coins guarded by bespectacled workers and wild animals.

WTCG · January 21, 2009 4:04AM

It should be known that many of the larger coin companies which appear to be the most capitalized and carry the highest value inventories are leveraged beyond reason and regularly borrow money from others, sometimes from dealers who appear to be "small players". There are a lot of those one-man operations that are in fact in a stronger financial position than many of the larger companies.

Anybody can provide details about their finances, but whether that information is actually accurate or true is another story.

pennyannie · January 21, 2009 8:18AM

If i sell coins it is CASH only, i do not care if your name is LONGACRE. A dealer can make up anything to make you think he has money or is good for it. Just show me the cash. If i have such a rare coin that i can not be paid with cash on the spot, then i feel my options are limited. At this point and time i would probably require Heritage to front me 50 percent toward an upcoming auction. I do not have this problem and i am glad.

streeter · January 21, 2009 9:18AM

Charlie Finley, the old owner of the Oakland A's used to use a standard phrase......Big Hat, No Cattle.

We'll see who has the cattle in the next couple of years.

Barry · January 21, 2009 9:49AM

When you meet clients, do you present them with your tax returns so they can see how YOU did last year?

Re dealers looking for fresh coins, it's the same as dealers looking for want lists. They may say them want them, but they never act on them.

ColonialCoinUnion · January 21, 2009 10:06AM

<< When you meet clients, do you present them with your tax returns so they can see how YOU did last year? >>

That would be a fun world to live in. Hauling a giant box of files around with you, spreading out documents all over the table at every meal, etc.

<< Re dealers looking for fresh coins, it's the same as dealers looking for want lists. They may say them want them, but they never act on them. >>

Why wouldn't a dealer act on a want list? It's like an automatic sale if you find the right item.

IGWT · January 21, 2009 10:14AM

I did $185 million in sales last month and have $322 million in the bank. Wanna buy some coins?

It's like Gringots over there - big piles of gold coins guarded by bespectacled workers and wild animals.

You think Andy will recongize the allusion to Harry Potter? Aki maybe, Andy no.

ColonialCoinUnion · January 21, 2009 10:45AM

<< I did $185 million in sales last month and have $322 million in the bank. Wanna buy some coins?

It's like Gringots over there - big piles of gold coins guarded by bespectacled workers and wild animals.

You think Andy will recongize the allusion to Harry Potter? Aki maybe, Andy no. >>

I'll admit it was a risk, but I believe a risk worth taking.

PerryHall · January 21, 2009 4:22PM

<< Why wouldn't a dealer act on a want list? It's like an automatic sale if you find the right item. >>

What if the customer is picky about what coins he buys and how much he pays? If the customer passes on a coin, the dealer may be stuck with a coin that may be difficult to unload unless he has it on memo from another dealer and can return it.

Coxe · January 21, 2009 5:17PM

Even if you could get independently audited numbers, most coin dealers probably wouldn't bite at the idea. The reason? Not all of them favor having everything on the books. Not saying every, or perhaps most, but coin dealers are in positions where underreporting income and not collecting/paying taxes on intrastate transactions is easy enough that you know a fraction of them gotta be dealing that way.

There is also the security issue. If Heritage said they did so many million in auction sales last month, it would be great promotion. But if Steve Ivy said he personally sold so many million in rare coins, that introduces personal risk.

I am just speculating because I really don't know. But makes sense to me.

Barry · January 21, 2009 9:42PM

<< like an automatic sale if you find the right item. >>

That's a very good Question. I've had several dealers solicit want lists from me. Never once did I get a call "I have what you're looking for" and it wasn't really esoteric stuff, either.

IrishMike · January 21, 2009 9:54PM

After Enron, don't feel all warm and fuzzy about audited statements and transparency. The one accounting term I adhere to after 35 years of analyzing them is GIGO.

TwoSides2aCoin · January 21, 2009 9:59PM

<< As I said, there are some dealers that I simply would not consider doing business with solely because I have no idea of their financial footing. Does anyone have any comments?

I did $185 million in sales last month and have $322 million in the bank. Wanna buy some coins? >>

Could you bail me out ?

Edit :
(P.S. to dorkkarl, I read " 185" but only hear a song by joe walsh in my head. Thanks to you.)
"My Maserati does one eighty five... I lost my license and now I can't drive"

ColonialCoinUnion · January 21, 2009 10:10PM

<< 

<< Why wouldn't a dealer act on a want list? It's like an automatic sale if you find the right item. >>

What if the customer is picky about what coins he buys and how much he pays? >>

In my experience, all customers are picky about what coins they buy and what price they pay.

<< If the customer passes on a coin, the dealer may be stuck with a coin that may be difficult to unload unless he has it on memo from another dealer and can return it. >>

If it's something we'd buy for inventory anyway, that's not an issue. And if it's something we wouldn't buy (maybe because it's in a series in which we don't do much in, or it's extreeeeeeeemly esoteric), we'd take it on memo.

Longacre · January 21, 2009 10:29PM

<< 

<< I did $185 million in sales last month and have $322 million in the bank. Wanna buy some coins?

It's like Gringots over there - big piles of gold coins guarded by bespectacled workers and wild animals.

You think Andy will recongize the allusion to Harry Potter? Aki maybe, Andy no. >>

I'll admit it was a risk, but I believe a risk worth taking. >>

It flew right over my head and I didn't know what CCU was talking about. Thanks for the clarification!!

Should dealers provide more public details regarding their capitalization to attract more coins?

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