Mark up between buying and selling by dealers

[mkonst]

Just went for a walk today and spent some time in my local coin shop and happend to him purchase a lot of coins.

Well the total he paid was far less than what I would have expected.

I would say he paid only 1/3 of the retail value, makes me think it would be good to get into the coin buying business.

[JeffH]

Yes, that sound an attractive proposition; until you investigate it closely.
[I presume you mean buying to resell at a huge profit.]

[mkonst]

Yes, I do mean buying to reselling.

I would have loved to have jumped in and offered more money.

How does $850 for the following sound

2 x 1925 1d's
1 x 1946 1d
1 x 1938 crown
3 x 1937 crowns
70 x 1966 50 cents
$150 dollars of 50 cents
2 push in Penny albums (partially complete)
20 odd Florins
numerous 3d,s and 6ds
A few predecimal notes
Clip bag of pennies
Clip bag of 1/2 pennies

[Unicorn]

Yeah, it might sound good, but the poor bugger with the shop has to;

1. Make a wage for themselves
2. Pay the rent/(or the value of alternative investment)
3. Pay the rest of the overheads

..... every week ......

regardless of a "good buy" (and in saying that you'd have to see them to comment further).

[serial]

sounds cheap, however may I suggest you never try to buy of a coin dealers customer in their shop.
but if you want to get stuff like this then open a shop, pay for insurance, rent, business registration fees etc and hope that enough people come through that door to keep food on your table and a roof over your head.
I do wish I could get coins this cheap but I do not envy brick and mortar coin dealers in this day and age where it is so easy to sell to a large market online. having said that the person coin have sold that lot of coin on any number of coin/sale related website for more but they chose not to. Laziness, lack of motivation, lack of ability, for what ever reason, the seller chose to dump them at a coin shop and now the coin shop has to work to sell them at a retail price, a service they should be paid for.

[ausjack]

You don't know the story of the person selling as they might have been in urgent need and just had to get money as quick as they could for medical expenses etc, been there and it's not fun but I didn't go to a dealer as we don't have one so I had to put it all back in the pond, some people have better lives than others and hope I don't have to do it again but when you don't have a choice and the Dr's and the like want their money before they even see you what choice do you have But I can understand they have a business to run but no need to rip people off either.

[mkonst]

Yes I do understand they have a business to run, but still I was surprised at the gap.

I did get some of the ladies story as I was in the shop for a while and spoke with her, basically a relative had passed away and she was selling her hoard in one lot.

Guess I'm mostly surprised and envious that the dealer can get coins so cheap, but considering the risks they have taken, I wouldn't be game to try it myself.

No, I didn't try to buy from the coin dealers customer in his shop, I'm not that type of person. But I do also fell that the seller got a bit ripped off, but she was happy enough so maybe I should stop thinking so much.

I do buy coins from the shop on a regular basis and will continue to, I suppose I'm now just thinking of how I can get some of the more expensive coins at a lower price.

It also goes against the argument of coin collecting being a good investment, especially if you are paying retail for your coins.

Hope I haven't upset anyone during this discussion.

[Unicorn]

Hope I haven't upset anyone during this discussion.

I think quite the opposite Mkonst. It's a great point and all too often we see someone getting the "bargain buy of the century" or the "raw prawn when they sell".

I've been on the "have to dispose of" on a few occasions and agree that it can suck.

Basically I think it applies to anything. (Houses, cars whatever).

[ausjack]

Nah all good here mate and I understand where your coming from :friends:

Hey, you have over 50 post now :yahoo:
Yes sometimes you just have to bite the bullet and do what has to be done but breaks your heart having to do it.

[mkonst]

Yeah passed 50 post and made quite a few extra today.

It is an interesting topic and a learning experience for me.

I guess so long as both parties are happy at the end of the day then all is good.

Guess it links up to the story my mother-in-law was telling me last weekend of how her mother traded gold coins for off flour just to put food on their table in the old country.

[stevo1962]

Before I started collecting coins I sold $6000 worth of inherited coins to my local coin dealer  for $1300 not knowing what they were worth but I desperately needed the money after a marriage breakup to help finish off a newly built house just so I could put the house on the market and move on with my life so in this instance it was a case of get rid of them now and use the money .I've since made that money back at least 20 fold so you do what you have to at the time

[markn]

Yes, I do mean buying to reselling.

I would have loved to have jumped in and offered more money.

How does $850 for the following sound

PPH and I have done enough buying on behalf of a dealer friend here in Adelaide to know that the quality you saw getting bought is far beyond what a dealer would normally see. 99% of what is offered for sale over the counter is garbage.  And don't think they double their money on everything either, he might only make $1-$2 a coin on the round 50's.  Hardly enough to get rich.

As is already pointed out a B&M dealer has real overheads far and beyond the average internet 'dealer'.

[drakesterling]

The gross margin on PCGS-graded coins is between 10% - 40%. It'll be wider than that on raw coins.

[Fulvio]

I would say he paid only 1/3 of the retail value, makes me think it would be good to get into the coin buying business.

Don't assume he's going to actually GET retail for them. I've never paid retail yet... typically I manage half that, sometimes even less, depending on what the dealer paid.

See, just like the seller may need to put food on the table or pay for doctors or whatever, the dealer has to pay the rent. Faced with a choice between a quick but small profit and waiting for some mythical beast to walk in and pay over the odds, most will take the money and run, and do it all again tomorrow.

ALL transactions are like this, BTW, not just coins.

For example, I recently had a run of flat tyres. First some bastard stabbed all four wheels in the sidewalls (not repairable), then I copped two punctures and a slow leak. I swapped a couple of wheels at the wreckers for $100, but still have 9 wheels, and one of them repairable. So I went to the tyre joint and asked them to fix it.

Now, back in the day, it was like $5 for a tube, and $5 more to get their hands dirty. But they wanted $38!!! I said that's a lot for a tube when I can buy a complete wheel for $50, only to be informed they no longer do tubes, they plug the hole. Sooo. I did some research, found a YouTube video, took advantage of the RACV discount and bought a kit for $9 that will do three tyres.

If they hadn't been so greedy, and asked for $20 or so, I would have paid it, and be none the wiser. But greed took the money out of their till and put it back in my pocket where it belongs. I don't like greed, whether its a tyre joint or a coin vendor trying to rip me off, and I doubt I'm the only one who feels this way. I'll also keep this saga in mind when I'm next in the market for new tyres as well. Guess where I won't be buying them? :diablo:

[Goose]

Same story here. I was driving and heard a 'tick-tick-tick-tick' and thought, "Oh, a stone in the r-rear tire....or a nail." I stopped and noticed a small screw in the tire. I could have pulled it out (I have a few small tools in the SUV) but then if the screw pierced the inner tire layers, the tire would go flat.

I then saw a tire store and asked them to fix it.  I asked them IF the screw penetrated so as to cause the tire to leak. They took the tire off and plugged the hole and didn't mention IF the screw penetrated. My bill for a simple plugged tire? $38 U S....$49.50 Aussie dollar. Needless to say, that's another business I'll never go to again due to 'Greed'. My list must be around 12 by now in the area.