Whether you are buying or selling coins, you can increase your advantage when negotiating with mint dealers by understanding how the coin market works behind the scenes. One of the biggest problems I see, as an observer of the coin collecting marketplace, is the wide gulf between what the average consumer expects from a mint principal, and what the average coin dealer believes he should provide to the consumer. The majority of these differences boil down to trust .
The average consumer thinks he can trust the mint principal to give him an honest appraisal and pay a bazaar price for the coins he is selling. The average dealer feels it is properly to pay the lowest price he can for the coins, to maximize his profit, and that it is up to the consumer to do his homework. fortunately, by finding this article, you will be on a much better footing when dealing with coin dealers .
Reading: Learn How to Buy and Sell Coins
Phongphan Supphakankamjon / EyeEm
overview of the Coin Dealing Business
There are two major categories of mint dealers—the jobber and the retailer. The jobber aggressively seeks to bring modern substantial into the marketplace, and frequently attends mint shows, local auctions, and runs advertising offering to buy coins. Most of this material is sold in majority lots to retail-based dealers. In other words, they will buy coins from good about anybody but only sell their coins to other dealers. unfortunately, these dealers must pay lower prices in order to make a profit on their sales .
The retail coin dealer gets most of his stock from the wholesalers. Although retail coin dealers may besides attend mint shows and buy locally, most of his commercial enterprise income is from servicing a clientele of single-coin buyers. A dealer of this type is more probably to pay you higher prices for your coins since they do n’t have to pass through two sets of hands before being sold. But, be careful some local dealers are besides frequently the worst of the cheat ! This is because the larger dealers are more likely to belong to organizations that require them to subscribe to a Code of Ethics, such as the American Numismatic Association or the professional Numismatists Guild. The number one consideration that anybody who buys or sells coins must consider is recourse. What kind of recourse do you have if things go bad ?
This is not to say that all coin dealers are thieves and crooks. On the contrary. huge majority of coin dealers hold up to a series of ethics and moralities in ordain to ensure their future business. however, it goes without saying, that there are a few bad apples that can destroy your trust in the coin collecting hobby .
wholesale Coin Prices
One of the best ways to arm yourself against the understanding mint trader is knowing the sweeping prices he pays for his coins. A identical widely-used standard in U.S. coins is the Coin Dealer Newsletter, which is printed on gray newspaper and comes out hebdomadally. People besides referred to it as the “ Grey Sheet, ” or “ CDN. ”
Most professional mint dealers subscribe to this publication, which lists the wholesale values for every major type of U.S. coin and commemorative coins. It besides carries prices for mint sets, slabbed coins, and banknotes called the “ greens sheet. ”
An significant concept to remember when discussing Grey Sheet prices is that we are talking about the sweeping commercialize. Two things characterize this commercialize : ( 1 ) Most deals for bulk quantities, so the prices do n’t refer to single coins, and ( 2 ) Deals are minimal service transactions. You ca n’t go up to a coin principal who has to appraise and grade your solicitation for you and expect him to pay Grey Sheet “ bid ” prices. however, the Grey Sheet should give you a beneficial idea of what your coins are worth in a general sense, so you do n’t sell a $ 1,000 coin for $ 200 .
Coin Dealer net income Margins
As a general rule, the more common a mint is, and the lower grade the coin is, the higher the profit margin ( expressed as a percentage of the deal price ) for the dealer must be. The reason for this is that low-grade, common coins are harder to sell. Another reason for this deviation is dollar value. If a trader buys a common date, heavily mobilize 1940 Wheat Cent from you, he might pay you 2 cents for the mint and sell it for 5 cents, making a greater than 100 % net income ( but still entirely 3 cents ). But if he buys a key date, heavily circulated mint, such as a 1931-S Wheat Cent in Good ( G-4 degree ), he might be able to pay you $ 50 for it, evening though he will make only a 20 % profit when he sells it for $ 60. The difference is that the winder 1931-S coin is likely to sell much faster than the 1940 penny. additionally, the dollar measure involved much greater .
Another general rule of wholesale coin pricing is that the more valuable the coin is, the smaller the profit allowance needs to be, percentage-wise. If a coin trader buys a mint for $ 15,000 and quickly sells it for $ 16,000, he can land a thousand dollar net income. But, if this coin is tied up in his inventory for a long time before person buys it, there is a large kernel of money that is not earning him anything .
All told, the profit margins for coins are chiefly determined by these three factors :
- How quickly the coin can be resold (market demand)
- How high the dollar value is (capital outlay)
- The condition of the coin market overall (market dynamics)
coin dealers must strike a balance between these factors to remain profitable .
Coin Dealers and Common Junk
One of the reasons there is such a disparity between what the average consumer expects, and what the coin dealer delivers when it comes to buying coins from the public is that mint dealers see huge amounts of common “ debris. ” By “ junk ” I mean common date pale yellow pennies, circulated Buffalo Nickels and Mercury Dimes, careworn Washington Quarters and circulated Franklin and Kennedy Halves .
People offer coin dealers thus much of this type of material that many of them get tired of seeing it. They give such material the casual once-over and offer low-ball prices for it based on hanker experience. normally, people have already pulled out the more valuable coins, leaving the “ debris. ” The customer feels that his coins have n’t been given a honest appraisal. What if the dealer overlooked something rare ? Should n’t he look each coin up to be certain ?
People who sell their coins to coin dealers frequently feel they have not been treated fairly. The dealer might stir his finger around a box or jar of coins for a minute or two and then make an offer that seems besides low. even worse are the cases where the dealer opens up the blue Whitman folders, takes a flying glance, and then offers $ 9 for the solid collection. How can he know what the coins are worth if he does n’t even look at each one first ? Is he trying to rip me off ?
The Realities of Selling Coins
As explained previously, coin dealers see a huge measure of what they commonly call “ junk. ” Although these coins do have a value, they are so often seen for sale but are indeed hard to sell, that the coin principal is reluctant to buy them. When person brings in a large can of Wheat Cents, for example, most dealers will run their fingers through them to assess the range of dates and median quality of the coins. If they appear to be a run-of-the-mill common go steady, mobilize Wheaties, the dealer will normally offer a bland rate for the lot. This price is based on his calculate of the burden, or he might run them through a coin counterpunch. Whatever he does, he assuming two things :
- That any valuable dates have been removed from the lot already, and
- If the seller has not searched the coins, the valuable dates are so rare that odds have it none of the valuable coins will turn up in this lot.
therefore, he pays a “ worst case scenario ” price for the coins. The same is true for most of the coins minted in the twentieth hundred, whether they are Buffalo nickels, Mercury dimes, Washington quarters, etc. Dealers will make a flying appraisal of grade and dates and then make an put up based on the bulk monetary value. frequently, the price he offers is based on the bullion value of the coins. If the dealer should happen to find a rare coin in the batch, that ‘s bang-up, but most of the time he does n’t, and such coins are not worth the time it takes to check each one .
If you want to maximize the money the dealer will pay you for your coins ; you ‘ll need to sort them into batches and be indisputable to remove any coin worth ten times face value or more according to the Red Book. Depending on the coin type, there are several different ways to sort your coins to maximizing the price. For Wheat cents, sorting them by decades will help. On the average, wheat cents in the teens go for 15 to 18 cents each depending on average grade. Cents in the 1920 ‘s go for 10 to 12 plus ; Cents in the 1930 ‘s go for 6 to 8 cents ; and circulated cents in the 1940 ‘s and 1950 ‘s normally go for 2 cents each. Mixed, uncategorized Wheaties go for 2 cents each, or possibly a little more if the dealer sees they contain early dates. By sorting them into decades, you ‘ve improved your profit allowance. Further classify, into individual years, can besides help if you have enough to make full rolls .
Selling Coin Collections
If you have complete coin collections in folders or albums, it is best to leave them in the album. Keep in mind that dealers can often make truly quick decisions about the respect because they have been doing it for so long. For example, most dealers who buy coins see many blue Whitman folders every month. They can quickly glance at the coins in the booklet and appraise the measure of the collection based on which holes are evacuate. Without those few rare “ keystone dates, ” the coins might a well be in a jar or brake shoe box, and the trader gives you the price consequently. If the coins he sees in the booklet are of higher than convention degree, his offer should be higher, besides, but most people feel slighted when mint dealers merely glance at their collections and then makes an offer .
The same principle applies to coins in other folders, such as Dansco albums and other types of coin folders and albums. It only takes a moment for person who has the key dates memorized to check to see if they ‘re in your collection .
Selling Coins in Slabs and 2×2 ‘s
If the coins are encapsulated in slab, they are normally worth more than the same coin that would be in a 2 x 2 cardboard holder. How much more depends on the timbre of the slab. If it is a PCGS or NGC slab, the coin should trade very near the Grey Sheet price, since these prices are for “ view unobserved ” coins which tend to be among the lowest examples in that grade. If the slab is ANACS or ICG, it is hush pretty solid, but not worth arsenic much as the top tier PCGS and NGC slabbed coins .
If the coin is in any other slab than these, it is normally worth about the same amount than if it was in a 2×2. The best way to maximize profits for non-premium slabbed coins and 2×2 ‘s is to consult the Grey Sheet and try to get near the “ command ” price for your coins. Knowing the values ahead of clock time is the key, but remember that the dealer needs room to make a net income .
Edited by : James Bucki