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dealers consigning to big auction houses

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Hi,

 

I was wondering how many dealers feel it's more profitable for some coins to be sold at a big auction house rather than to their own clientele? There is constant simultaneous talk about both the lengths customers go to trying to get lower prices as well as the prices brought at auctions that are well over retail. So then I wonder, how often do dealers consign to Heritage and the others instead of selling on their own site or to their own customer base, in order to maximize their returns?

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Many dealers, myself included, consign to major public auctions, occasionally, if not frequently.

 

Typically, if I have had a coin in my inventory for a few months, I consign it to auction at no reserve and let it go.

 

I believe that certain coins/types are better suited for auction than others. Coins I recommend include truly high end/premium quality coins, which might/will catch the attention of avid collectors, as well as dealers looking for up-grade candidates. Ditto for coins that are extremely difficult to place a value on.

 

I also recommend coins that are especially rare and/or esoteric, because often, an auction house can expose the coin to potential buyers that the seller doesn't know about.

 

I usually don't recommend plain Jane (no offense to her) generic coins such as gold type coins, Morgan Dollars, Walking Liberty Half dollars, etc. common, low value coins.

There is no reason to pay 10%, 15% or more to sell coins of that type. As you should be able to do better than that, without going through an auction house.

 

Keep in mind, even if you are paying ("only") 0% seller's commission, you are, in effect, still paying 15% to 17 1/2% commission, because bidders usually lower their hammer bids to account for the buyer's premium. And you, as a seller, are paid, based on that lower hammer bid. Said another way, the "buyer's" commission really comes out of the seller's pocket in many, if not most instances.

 

It all comes down to how you might fare by consigning to auction, vs. selling on your own, through Ebay, consigning to a dealer, etc. And there is no one best way to market all coins/coin types.

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Many coins that are consigned by dealers are those pieces that won't move off their websites or out of their inventory. It is a way to get out from under these coins and gain liquidity.

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Hi,

 

I was wondering how many dealers feel it's more profitable for some coins to be sold at a big auction house rather than to their own clientele? There is constant simultaneous talk about both the lengths customers go to trying to get lower prices as well as the prices brought at auctions that are well over retail. So then I wonder, how often do dealers consign to Heritage and the others instead of selling on their own site or to their own customer base, in order to maximize their returns?

 

Your question is thoughtful.

 

Mr Felds' insights are excellent answers.

 

My comment, however unimportant, is that a person should not be pursuaded by "...the constant simultaneous talk..." you mention.

 

A coin stands on its merits. A lot of the time, trying to get the lower price will cause the loss of the coin to another collector that is more astute and cognizant of the quality of the coin being offered. In my experience, it is very rarely the lower price that builds great collections.

 

But (blah, blah) what do I know? If I had my choice I would spend, spend, spend....keep them quality coins (of all grades) comimg...

 

With Respect,

John Curlis

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I have consigned with Heritage, Teletrade and Great Collections. The good thing about the last one is quick turn-around in listing and payment. The downside is probably less exposure. I can call one of the top buyers and get good offers for coins. Like an MS64 1917 Walker that would not sell at GC. Heritage gave me good money on that one. Anything CAC and they will make an offer. So coins are highly liquid in many cases, only you do not want to sell below cost or what you believe the market to be. And you do not want the certified coins to be stolen. For too long ebay had overpromoted problem coins that were from fringe grading companies or second tier companies. For that reason I have not listed with them as others will not.

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I cannot speak for "big auction houses", but I can say that for a small auction house, we get consignments from dealers and collectors both, though I couldn't tell you the ratio off-hand.

 

A third category you didn't mention is "non collectors". We get a significant amount of material from folks who do not and never have collected, but inherit coins. This is why our auctions always have some coins that are truly "fresh".

 

 

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I may occsionally consign material to an auction house like Teletrade especially if I can take advantage of their raw coin service. Even though I get zero percent sellers fee at TTR (contract) the bidders will bid accordingly considering the juice (15%). I had recently run a lot of 10 thru the TTR raw coin service. 9 of the coins sold over 3 auctions although I did incur one time buy back fee of $5 each on 7 of them. One has been returned to me (did not sell in 3 auctions bc my reserver too high I guess as I refused to give it away below cost), I have returned it to inventory in my store to sell at my price or keep from here on out. It was originally in an ANACS MS65 holder and going thru the TTR raw coin service its now back in a PCGS MS65 holder.

 

I operate at show and on the Bay and so more likely to auction material there as there is no delay in getting paid. While I like to see coins move quickly I have no set minimum time period to hold them. If I consider inventory level too high then I pull back on buying unless it is a really attractive deal. Frequent auctioning off material is something I would consider a red flag for me that the market has cooled, I am paying too much for material, buying material that can't be moved quickly, keeping too high of an inventory level, or some other reason. For capitalization of the business I like a 2-1 Inventory - Buying Cash mix. Too little cash available and you sacrifice super buying opportunities. Not all of my numismatic holdings are listed in my store as I have considerable amounts of bullion and USM material I sell at shows and my own personal collection (investment grade TPG Saints and Libs in my bank box).

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Many dealers, myself included, consign to major public auctions, occasionally, if not frequently.

 

Typically, if I have had a coin in my inventory for a few months, I consign it to auction at no reserve and let it go.

 

I believe that certain coins/types are better suited for auction than others. Coins I recommend include truly high end/premium quality coins, which might/will catch the attention of avid collectors, as well as dealers looking for up-grade candidates. Ditto for coins that are extremely difficult to place a value on.

 

I also recommend coins that are especially rare and/or esoteric, because often, an auction house can expose the coin to potential buyers that the seller doesn't know about.

 

I usually don't recommend plain Jane (no offense to her) generic coins such as gold type coins, Morgan Dollars, Walking Liberty Half dollars, etc. common, low value coins.

There is no reason to pay 10%, 15% or more to sell coins of that type. As you should be able to do better than that, without going through an auction house.

 

Keep in mind, even if you are paying ("only") 0% seller's commission, you are, in effect, still paying 15% to 17 1/2% commission, because bidders usually lower their hammer bids to account for the buyer's premium. And you, as a seller, are paid, based on that lower hammer bid. Said another way, the "buyer's" commission really comes out of the seller's pocket in many, if not most instances.

 

It all comes down to how you might fare by consigning to auction, vs. selling on your own, through Ebay, consigning to a dealer, etc. And there is no one best way to market all coins/coin types.

 

Great advice!

 

Respectfully,

 

'mint'

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