When is the coin dealership worth more than the dealer?

[DirtyGoldMan]

Perhaps I am not making the point clearly, but in most cases, it would appear to me that a coin dealership is worth no more than the dealer operating it. As an example, I have long been a supporter of Doug Winter, but if he were to leave his business, I am afraid there would be nothing left. If I bought his inventory from him and his website, there is no way I could make a go of the business. It depends on his expertise, experience, connections, client relationships, etc. I would say the same about Mark Feld Rare Coins, Legend, Gold Rush Gallery, John Kraljevich Americana, and Coin Rarities Online, other dealers with whom I have done a good bit of business.

 

On the other hand, there are firms like Heritage, and perhaps, Anaconda, where the value of the firm in excess of the principals' skills and connections. Heritage has so many moving parts, so many business lines, so experience and expertise, and so large a supporting infrastructure, that I would guess that the two or three founders could take a long vacation, and the business will continue to hum along. Similarly, I could envision an outside interest buying it, taking over the operations and continuing to run a very successful business.

[TomB]

Why is Anaconda worth anything without the consigned and owned inventory or the imaging prowess of Brandon?

[EZ_E]

I haven't purchased anything from Pinnacle since Mark and Scott left.

[MikeInFL]

Perhaps I am not making the point clearly, but in most cases, it would appear to me that a coin dealership is worth no more than the dealer operating it. As an example, I have long been a supporter of Doug Winter, but if he were to leave his business, I am afraid there would be nothing left. If I bought his inventory from him and his website, there is no way I could make a go of the business. It depends on his expertise, experience, connections, client relationships, etc. I would say the same about Mark Feld Rare Coins, Legend, Gold Rush Gallery, John Kraljevich Americana, and Coin Rarities Online, other dealers with whom I have done a good bit of business.

 

On the other hand, there are firms like Heritage, and perhaps, Anaconda, where the value of the firm in excess of the principals' skills and connections. Heritage has so many moving parts, so many business lines, so experience and expertise, and so large a supporting infrastructure, that I would guess that the two or three founders could take a long vacation, and the business will continue to hum along. Similarly, I could envision an outside interest buying it, taking over the operations and continuing to run a very successful business.

 

I do not believe, with no disrespect intended, that putting Anaconda and Heritage in the same league makes sense with respect to this question.

 

To me, it is personal relationships that matter when it comes to working closely with dealers -- not the name on the front door.

 

For instance, since Mark and Todd left Pinnacle, I haven't done any business with them.

 

However, as you point out, Heritage, being the 100lb gorilla, has a certain reputation, but I don't think that smaller outfits gain that same advantage. That said, the reputation will certainly make it easier for future owners to capitalize, but ONLY if they execute.

 

Respectfully...Mike

[just-john]

I feel the owners expertise is a major factor but the economy and store location and reputation would be very "important" too. The place to be would be a larger city if the economy took a dive because more high value coins would come on the market.The higher value coins will always find a new home and that dealer would always make a profit.Like they say management important but location location location

[lehigh96]

Why is Anaconda worth anything without the consigned and owned inventory or the imaging prowess of Brandon?

 

Anaconda had a pretty cool website, but I guess that was Brandon's doing as well. I will be very interested to see where he lands. As a loyal Anaconda customer, I hope someone hires him soon.

[World Colonial]

I agree that the value in a coin enterprise, except probably in a case like Heritage, is more than the name on the door. But the best real life experiment is Bowers & Merena. How have they done since David left to join ANR and now Stacks? (I do not know.)

 

The coin business is a reputation and service business, though the "product" is easier to sell than many or most others. And while I do not believe that it is impossible for (as an example) one of us on these boards (who is not already a dealer) to go out and buy a local coin shop and make a go of it, I think that the chances of this turning out to be a successful venture for most are low. The success would vary and to a large extent be a function of the business acumen of the individual who tried it. Being self-employed is difficult under any circumstances and I do not know of any reason to believe it would be any easier to be a coin dealer than anything else.

 

David Bowers is also a good example of the economic value of a name. As a guess, I would expect that he sold Bowers & Merena for good money, became a partner or principal in ANR (don't remember the details but it seems like he just picked up and basically opened up shop across the street, so to speak) and then probably made good money as part of the sale to Stacks. Possibly, he also receives or received a residual from the Bowers & Merena transaction for a few years after the sale. Don't know but that does happen in other fields.

 

In any event, what we do know is that no member on this board would have been able to do that, not by a long shot.

 

[coinman1794]

When is the coin dealership worth more than the dealer?

 

When it buys the first coin!

 

 

 

 

 

[Oldtrader3]

Actually, Q.D. Bowers was fired from B&M by HRH. IMHO, this was all about management style and integrity. HRH moved B&M to southern California also. HRH blew off publicly about it but Bowers maintained his silence in the matter. Dave Bowers did honor his non-compete contract, which he did not have to by the way. It was a year before QDB's name appeared on ANR's letterhead. All of Bowers staff of good people at B&M walked away from working for HRH shortly after to work at ANR in New Hampshire as well.

 

David Hall (AKA HRH) still has the taste of salt in his mouth from that messing up that deal!

[Doogy]

Actually, Q.D. Bowers was fired from B&M by HRH. IMHO, this was all about management style and integrity. HRH moved B&M to southern California also. HRH blew off publicly about it but Bowers maintained his silence in the matter. Dave Bowers did honor his non-compete contract, which he did not have to by the way. It was a year before QDB's name appeared on ANR's letterhead. All of Bowers staff of good people at B&M walked away from working for HRH shortly after to work at ANR in New Hampshire as well.

 

David Hall (AKA HRH) still has the taste of salt in his mouth from that messing up that deal!

 

wow, good info! I had no idea Hall was involved like that. Good for Bowers, looks like he got the last word after all!

 

 

[Conder101]

Actually, Q.D. Bowers was fired from B&M by HRH. IMHO, this was all about management style and integrity. HRH moved B&M to southern California also. HRH blew off publicly about it but Bowers maintained his silence in the matter. Dave Bowers did honor his non-compete contract, which he did not have to by the way. It was a year before QDB's name appeared on ANR's letterhead. All of Bowers staff of good people at B&M walked away from working for HRH shortly after to work at ANR in New Hampshire as well.

And Bowers had sold B&M at least once, possibly twice before. (The only one I'm sure of is when he sold the company to General Mills.) In each case he took a nice chunk of change and then several years later bought the company back for less than half of what he sold it for. If it hadn't been for the non-compete clause he probably could have done it again because when CU sold off B&M they got a lot less than they had paid Bowers for the company. Who knows, he may still buy it back one of these days.

[PerryHall]

Actually, Q.D. Bowers was fired from B&M by HRH.

 

What is HRH?

[MarkFeld]

Actually, Q.D. Bowers was fired from B&M by HRH.

 

What is HRH?

Home Run Hall - David Hall.

[wayneherndon]

Actually, Q.D. Bowers was fired from B&M by HRH. IMHO, this was all about management style and integrity. HRH moved B&M to southern California also. HRH blew off publicly about it but Bowers maintained his silence in the matter. Dave Bowers did honor his non-compete contract, which he did not have to by the way. It was a year before QDB's name appeared on ANR's letterhead. All of Bowers staff of good people at B&M walked away from working for HRH shortly after to work at ANR in New Hampshire as well.

 

David Hall (AKA HRH) still has the taste of salt in his mouth from that messing up that deal!

 

Actually, if I recall correctly, I believed HRH/CU moved B&M to Louisiana. I don't recall if the move to CA was still during the CU ownership days or happened as a result of CU's sale of B&M to Spectrum.

 

WH

[TomB]

Yes, CU moved B&M to Louisiana.

[Doogy]

Actually, Q.D. Bowers was fired from B&M by HRH. IMHO, this was all about management style and integrity. HRH moved B&M to southern California also. HRH blew off publicly about it but Bowers maintained his silence in the matter. Dave Bowers did honor his non-compete contract, which he did not have to by the way. It was a year before QDB's name appeared on ANR's letterhead. All of Bowers staff of good people at B&M walked away from working for HRH shortly after to work at ANR in New Hampshire as well.

 

David Hall (AKA HRH) still has the taste of salt in his mouth from that messing up that deal!

 

Actually, if I recall correctly, I believed HRH/CU moved B&M to Louisiana. I don't recall if the move to CA was still during the CU ownership days or happened as a result of CU's sale of B&M to Spectrum.

 

WH

 

kinda............the real story is: Hall moved it to Louisiana, and he and the CU folks decided to market it as a multi-use business. Bowers, Merena, Crawfish & Biscuits (BMC&B) is what it was briefly titled. Their specialty was Bayou cooking with a numismatic twist. Collectors hungry for choice coins, and just plain hungry, found a lot to be thankful for. Sadly, they had a massive grease fire while trying to artifically tone some Morgans in the back kitchen using deep fryers, and part of the business was lost in a fire. that is the way i remember it anyway......

[rons]

[Oldtrader3]

Hmm, I always called the (714) Area Code to speak to B&M Auction Directors, and sent checks to Newport Beach, California for all transactions during the latter half of 2002. I just always assumed that B&M was located where their auction center and telephone area code and mailing address was. I still have the billing receipts.

[Houston Investor]

IMO - You have your question backwards.

 

Yes there are people who idolize certain dealers but there are a lot more of us that could give a rats behind less about them. Some individual dealers are worth more than the financial equity of the business? Maybe they should be on the NYSE.

 

Well if any of your favs above are selling stock in their business maybe you should invest in them. But what would the dividends be based on if any? We are headed for a recession perhaps depression. I try not to let the personal side influence my numismatic purchase (business) decisions about a particular dealer. Its all in the deal.

[Oldtrader3]

The dealer does influence me in my purchases. I try to buy from people who are ethical and take an extra step for their customer sometimes. Good coin dealers return customer loyalty. Most are not car dealers. There are dealers with whom I have had a (30+) year relationship, or those whom I trust their judgment and pricing instincts more than others. I will always shop them first before dealers with whom I have less experience and always give trusted dealers preference.

[DirtyGoldMan]

The context of this thread is that Anaconda is selling their name, along with some equipment, in a public sale. I am having trouble putting a value on the Anaconda business, beyond the liquidation value of a couple cameras, scanners, and computers. Some have suggested that their website is a valuable asset, as these take some time and expertise to set up. And what about their ebay presence? They have a multi-year experience of 100% positive and a generally favorable ebay reputation.

 

So, is the value of the Anaconda business worth more than that of their physical assets, and, if so, how much more?

[DirtyGoldMan]

IMO - You have your question backwards.

 

Yes there are people who idolize certain dealers but there are a lot more of us that could give a rats behind less about them. Some individual dealers are worth more than the financial equity of the business? Maybe they should be on the NYSE.

 

Well if any of your favs above are selling stock in their business maybe you should invest in them. But what would the dividends be based on if any? We are headed for a recession perhaps depression. I try not to let the personal side influence my numismatic purchase (business) decisions about a particular dealer. Its all in the deal.

 

The premise of the OP is that in almost all cases, the dealership is not worth much beyond the dealer's ability to run it. In numerous cases (ie. Legend, Rare Coin Wholesalers, Stack's, and probably a whole lot more) there is financial backing by big money. These people who back these firms undoubtedly see the ability to profit from the toil of these dealers--if not, they would not invest.

 

 

[Oldtrader3]

There is always an intangible that accountants call "good will". It is hard to assign a value to good will unless it includes the assets of people.

[MarkFeld]

The context of this thread is that Anaconda is selling their name, along with some equipment, in a public sale. I am having trouble putting a value on the Anaconda business, beyond the liquidation value of a couple cameras, scanners, and computers. Some have suggested that their website is a valuable asset, as these take some time and expertise to set up. And what about their ebay presence? They have a multi-year experience of 100% positive and a generally favorable ebay reputation.

 

So, is the value of the Anaconda business worth more than that of their physical assets, and, if so, how much more?

Robert, I could see some value in obtaining their mailing list. Other than that - and I don't know what such a list would be worth - and the equipment you mentioned, I don't see any value.

[PerryHall]

Does the fact that their inventory is bringing far less at auction that their original asking price hurt the value of their name?