In regards to an old post in U.S. Coins---crazy across the street

[jesbroken]

Rather than comment on an old post with many posts, I will start a new post about a statement made by Chris.

 

Which makes more sense from a revenue standpoint? Submitting one million - $100 coins or submitting one hundred - $1,000,000 coins?

 

Chris

 

After running many companies and for the last 20 years I worked as GM for an International Heavy Truck dealership, this comment was made and answered by hundreds of people in their businesses, at meetings, at other dealership and just in passing conversations. Not once was it ever answered the lesser customer base. Every single time the answer was 1 million $100 customers. We had many Million dollar customers, but they would not make up for the thousands of $100+ customers, who due to their smaller purchases, usually brought a higher profit margin to the company, as the $million dollar customers were able to demand and get better pricing, quality service and greater attention. Throughout the life of any business, customer's will be lost, but if one only had million dollar customers it would be a tragic loss to lose even one, not to mention several. The ideal would be not to lose any, but that is not realistic and is a merely a goal to attempt to reach. A large customer base would always be the answer, in my opinion.

Now if a company, such as PCGS, had such a large database of $million customers then their perspective would most certainly be different and may garner a different answer, but I doubt it.

Jim

[WoodenJefferson]

My Grandmother was a simple person with much savvy...as a kid, I was returning from her apple tree with an over flowing arm load of apples, way more than I could possibly ever eat. She looked at me and said, "Never carry ALL of your eggs in just one basket, for if you were to loose your basket, well then, you just lost all of your eggs"

 

Now to a kid who just got sick eating apples, that may not seem to be much of a standard to live by, but lessons learned early in life can and do sometimes carry over during maturity.

 

Companies who have a small customer base are influenced faster to market changes than one that is more diverse...simple rules apply to just about every aspect of survivability, whether your grading widgets or raising turkeys, the variables out there are always out to get you.

 

 

 

 

[cpm9ball]

Rather than comment on an old post with many posts, I will start a new post about a statement made by Chris.

 

Which makes more sense from a revenue standpoint? Submitting one million - $100 coins or submitting one hundred - $1,000,000 coins?

 

Chris

 

After running many companies and for the last 20 years I worked as GM for an International Heavy Truck dealership, this comment was made and answered by hundreds of people in their businesses, at meetings, at other dealership and just in passing conversations. Not once was it ever answered the lesser customer base. Every single time the answer was 1 million $100 customers. We had many Million dollar customers, but they would not make up for the thousands of $100+ customers, who due to their smaller purchases, usually brought a higher profit margin to the company, as the $million dollar customers were able to demand and get better pricing, quality service and greater attention. Throughout the life of any business, customer's will be lost, but if one only had million dollar customers it would be a tragic loss to lose even one, not to mention several. The ideal would be not to lose any, but that is not realistic and is a merely a goal to attempt to reach. A large customer base would always be the answer, in my opinion.

Now if a company, such as PCGS, had such a large database of $million customers then their perspective would most certainly be different and may garner a different answer, but I doubt it.

Jim

 

That was exactly my point, Jim. In the other thread, one of the posters made a comment about PCGS only caring about their million-dollar customers or something to that effect. You and I and probabaly most of the other business-oriented people on this forum know that is a bunch of garbage.

 

PCGS doesn't like anybody.

 

Chris

[TomB]

Don't tell Chris, but I thought his post was quite eloquent.

[James_OldeTowne]

I'm going to assume you are a single business person being offered the choice of 100 $1M, or 1M $100 customers. Given inexhaustible resources on your part (in other words, you have all the time, effort and desire in the world to spend just on marketing), there's no question the 1M customers is the way to go. That's because, you can sell $100 coins more quickly at a profit, and immediately reinvest those proceeds to garner more profit. You get the benefit of "compounding".

 

With the $1M coin, you are likely to sell each very infrequently, which means you have a lot of funds tied up in inventory that seldom moves.

 

The problem with this scenario is that it assumes you have the ability to constantly be marketing... and very few people (who are sane anyway) can. Again, to keep flipping the $100 coins, you have to be going to shows constantly, greeting customers, doing the followup, generating reports, etc. The marketing costs are compounded.

 

I know that the scenario is presented in extremes. The best bet is a compromise in diversity, whereby you are servicing both types of customers. That way, when times are good, the big spenders are keeping you busy selling those seven-digit coins. When the economy is lousy, and the millionaires hibernate, low-end customers come to the fore.

[cpm9ball]

Don't tell Chris, but I thought his post was quite eloquent.

 

What? When? Did I say something with some degree of intelligence?

 

Chris

[ldhair]

PCGS doesn't like anybody.

 

That seems to be true.

[Houston Investor]

I believe it would be easier to make 25% on a $100 coin than the same margin on a $1,000,000 coin. I am in the business to move material quickly and have a positive P&L, not build a registry set, or be buried in expensive inventory with a slow turnover.

 

I have never been a fan of big ticket coins over $1000 except gold close to its basal value. They eat up a lot of investment money which does not pay interest or dividends and even worse you don't have that in ready cash in case something walks up way below bid which you can flip and make money on instantly. Big ticket cons can stay in inventory a long time, are volatile, and if you have to liquidate in an emergency watch out you could be in for a hosing. Their well heeled buyers are very fussy and will certainly have a grey sheet in their hip pocket along with possibly auction results. You can read their posts ATS. The mainline big gun players have attempted to inject some vigor into this stuff first with CAC and now the recent announcement by PCGS.

 

The average working man coming to a coin show or logging in online probably has no more than $300 in his pocket to buy coins if that much. If he has $1000 in discretionary income, he probably spent 75% of it on his boat or seeing a girl. Good luck if there is any left over for coins. Big ticket coins not only put a dent in a family budget but take money away from other hobbies like boating, golf, or strip clubbing. To make matters worse one doesn't have to be a rocket scientist to see coins in reality are a lousy investment based on the CCDN Coin Market Index. It takes an optimist nowadays to buy coins and I bet the owners of CAC along with the big gun dealers who use their service are hoping there a lot of optimists out there on the bourse with big bucks to spend.

[cpm9ball]

Jim,

 

I think it would have been better if you had posted on the original thread. They're talking about holding high-dollar coins in inventory, what is easier to move, etc., and I know this isn't what you intended at the outset.

 

Chris