Dealers: when a "want list" item is going for full retail price at an auction...

[bluel-migration]

If there is a coin on a client's "want list" that is looking like it's going to sell for what you previously considered full retail at an auction, what do you usually do? Stretch a little and decrease your margins, stretch a little and raise the price in an assumption that prices are apparently increasing, or stay at your previous price?

 

It really seems to me, as an observer, that auction prices have reached parity with retail prices.

[MarkFeld]

The very large majority of my want lists do not involve my client being committed to buy the coin, without seeing it first. So, I have a choice - I can either buy the coin and hope my client will like it/buy it from me. Or, I can contact the client and see if he wishes to commit to the coin at a given price, in the event that I can buy it.

 

In many cases, auction coins sell for what I consider to be full "retail" (or higher). But in many others, the prices realized are quite reasonable. The key is to to be able to view and assess the coins, in hand. And to formulate bids, accordingly.

 

If I have to stretch to buy a coin, I will mark it up by a smaller amount than I otherwise would. And if I buy a coin for what I consider to be a bargain price, I will mark it up by more than I typically would. The former occurs much more frequently than the latter.

[bluel-migration]

Thanks for the comment Mark!

 

In many cases, auction coins sell for what I consider to be full "retail" (or higher).

 

Do you think this is because more end collectors have access to auctions or more a result of bidding fever? How often do you get the sneaking suspicion that a stronger-than-expected auction price is a sign of actually increased market price?

 

 

[TomB]

It depends upon the coin and the prospect of being able to sell the coin to another collector should the first collector decline. I work want lists for collectors, but no one is obligated to buy any coin that I have purchased with them in mind. Therefore, I tend to be extremely picky about filling want lists since I know I may have to put the coin in general inventory instead of placing it immediately. However, the quality of the individual coin in question will determine to a great extent where I might be willing to bid on the coin. If the piece is exceptional then it deserves to be sold for more than a generic or low end piece that is in a TPG holder of the same grade.

 

In my opinion, having many collectors bid remotely without auction representation has increased final bid prices on many coins past the point that it makes sense to purchase the coin.

[MarkFeld]

Thanks for the comment Mark!

 

In many cases, auction coins sell for what I consider to be full "retail" (or higher).

 

Do you think this is because more end collectors have access to auctions or more a result of bidding fever? How often do you get the sneaking suspicion that a stronger-than-expected auction price is a sign of actually increased market price?

 

 

I think the main reason is more widespread use of the Internet. And (although I see it as as dangerous for bidders) the reliance upon on-line images. Auction fever can certainly play a part, in some instances.

 

In my opinion, far more times than not, stronger than expected auction prices are merely that. And NOT an indication of a general increase in value/price.

[BillJones]

If I have to stretch to buy a coin, I will mark it up by a smaller amount than I otherwise would. And if I buy a coin for what I consider to be a bargain price, I will mark it up by more than I typically would. The former occurs much more frequently than the latter.

 

That is an honest comment, and it's the way I used to do it when I was a dealer.

 

With some items, it's hard to say what "full retail" is if the item is really hard to find and seldom seen. For most all items that show up fairly regularly, a "full retail" bid is a indicator that it's time to wait for another opportunity. BUT if you have been looking for something for a long time, and know it's tough either because of absolute rarity or a condition rarity, it might be time to "pull the trigger."

[coinman1794]

If I have to stretch to buy a coin, I will mark it up by a smaller amount than I otherwise would. And if I buy a coin for what I consider to be a bargain price, I will mark it up by more than I typically would. The former occurs much more frequently than the latter.

 

That is an honest comment, and it's the way I used to do it when I was a dealer.

 

Selling prices should always be based on what you judge to be the current value of the coin. In the event I am surprised by a lower-than-expected winning bid, I still price the coin according to what I believe the going rate is, based on the prices I have gotten/am getting for similar coins. The same goes for coins that I paid too much for.

 

If I have a surprising winning bid of $300, when my max bid was $500 and I have reason to believe it's worth $650, I charge $650 for the coin. If I pay $650 for a coin that turns out to be worth only $300, I charge $300 and lose money. The trick is to have the knowledge to make as few of those bad purchases as possible, and then you will come out ahead. As Mark said, seeing coins in-hand is a great advantage, though it’s not always possible.

 

[Oldtrader3]

It has been mentioned here that it is risky behavior to pay more than retail money for coins in an online auction that are at a bid level which is at or above retail FMV. In many cases, I do not believe that online images can be depended on to support paying top money for an imaged coin which one has not seen in hand. In this situation, I would rather pay a surrogate buyer, who you have confidence in, a commission for them to look at the coin before bidding.

[BillJones]

It has been mentioned here that it is risky behavior to pay more than retail money for coins in an online auction that are at a bid level which is at or above retail FMV. In many cases, I do not believe that online images can be depended on to support paying top money for an imaged coin which one has not seen in hand. In this situation, I would rather pay a surrogate buyer, who you have confidence in, a commission for them to look at the coin before bidding.

 

This is sound advice although when I have tried it the expense was high. The quote I got was 5% percent of the hammer price. Since the item that interested me was going to sell for a high 5 figure to low s figure price, that ran into quite a bit of money. Of course making a mistake at that level is expensive too.

[Oldtrader3]

I have made a couple of mistakes despite being very cautious when buying coins with pictures only. I am to the point of being ready to just pay the 5% for sight seen, insurance now. Of course, I do not not buy many coins over $3000 anymore anyway, so my liability is probably less than yours when employing a surrogate.

[michael]

i agree with paying a buyer with a good set of eyes 5% my problem is my eyes are just as good maybe even better!! at least subjectively as i only know what i truly like and i would need to see the coins themselves myself in hand sight seen besides getting the approval of the person i am paying 5% to if the lot is won in auction

 

so i cant ever bid/buy anything unless i see it personally

 

i dont care who or how many look at it for me

 

hard to buy coins this way

 

so all auctions items are out of bounds for me

 

sucks to be me

[Oldtrader3]

Sucks to be me also Michael because I can't just go to shows and look for my self. No without getting sick from genetic immunity issues. It just is not worth it anymore to get sick for two months after one day out of the house.