Dealer tips on getting started in the business???

[kryptonitecomics]

I know this may be against the coin dealer rules, but I have begun my quest towards becoming a full time coin dealer. I know this will be a long and winding road and I am looking at roughly a 2-year plan that will hopefully take me from a Banker to a coin dealer.

 

I am presentlly getting together capital that I can use to purchase coins etc to get started. I am not new to the world of coins, but I am also far from an expert.....I am doing a lot of reading and have purchased key books to aide me in the areas of VAMS and different varities within other coin series.

 

I am really planning on beginning with only selling certified coins. I dont want to get into grading squabbles with Ebayers so sticking with certified material, will cut down some on the usual "I don't agree with the grade" issues. I know that it will still happen, but not as frequently.

 

So......if any of you would be kind enough to share any tips, advice, lessons learned etc.....it would be greately appreciated.

 

[Bruceswar]

My family owns a business, not in the coin market., but none the less share some of the same problems. We deal in musical gear. Anyhow... I will give you a few pointers. This is prolly the best information we have ever recieved. "Profit is not a dirty word." You are in business to make profit. Also deal in what you know at first and learn as you go, but also deal in what your clients want and not what you think they want. If you are going to have a retail location, besides ebay, you will have a double edge sword. Buying and selling off ebay. We have found some pieces work better at our shop and some work better on ebay. I have been in coins since I was 7 about 14 years or so... and one of the best pieces of advice I got when starting to get into coins was "Buy 1 good coin, rather than 5 bad ones. Coins that are good will always hold value, and people will always want those. I am sure since you are a banker you know all about the finacial aspects of the business, but when you make your money is when you buy a coin from a person or where ever. In the musical industry we take trade ins which alot of stores or places usally try to stay away from. We trive on it. Also when making a coin purchase always ask the person, what they are looking to get out of the coin, before you make an offer. You would be suprised how many people will shoot a low price. If they shoot a high price you always have the grey sheet to help you out. Hope this helps and good luck. I will be looking forward to see what happens.

[kryptonitecomics]

Thanks for the info...you made some good points about sticking with what I know

 

I am planning to do this the right way, which will mean a level of trial and error...but I have a great paying job now so I can afford to be patient and try to make some better choices.....attend some shows to pick up inventory since I can see the coins in person and make better choices etc.

[HaydenTubbs]

My family owns a business, not in the coin market., but none the less share some of the same problems. We deal in musical gear. Anyhow... I will give you a few pointers. This is prolly the best information we have ever recieved. "Profit is not a dirty word." You are in business to make profit. Also deal in what you know at first and learn as you go, but also deal in what your clients want and not what you think they want. If you are going to have a retail location, besides ebay, you will have a double edge sword. Buying and selling off ebay. We have found some pieces work better at our shop and some work better on ebay. I have been in coins since I was 7 about 14 years or so... and one of the best pieces of advice I got when starting to get into coins was "Buy 1 good coin, rather than 5 bad ones. Coins that are good will always hold value, and people will always want those. I am sure since you are a banker you know all about the finacial aspects of the business, but when you make your money is when you buy a coin from a person or where ever. In the musical industry we take trade ins which alot of stores or places usally try to stay away from. We trive on it. Also when making a coin purchase always ask the person, what they are looking to get out of the coin, before you make an offer. You would be suprised how many people will shoot a low price. If they shoot a high price you always have the grey sheet to help you out. Hope this helps and good luck. I will be looking forward to see what happens.

I agree.

I think that you will be a great dealer.From what I've seen on these boards,your a great guy,with plenty of knowledge for coins,and a potential to get even better.I wish you best of luck

 

P.S.Just make sure you don't ever get uppity like that insufficiently_thoughtful_person,Laura from Legend.

[the_Thing ®]

Only thing I could tell you is that you are bound to take a loss every now and then. Instead of sitting on a coin for months hoping not to take a loss, go ahead and take your loss, so you free up some of your capital in order to sell something that you will make a profit on.

[the_Thing ®]

Oh yea, and never take a check from Tom Jennings of San Jose, Califorina. Cash only with this guy, trust me!

[kryptonitecomics]

More good tips......Thanks for the Kind words Hayden......I have a head for business, but again.....my biggest asset is that I am a people person and I want happy customers.

 

Many times I have taken a loss on Ebay when a customer wasn't happy...I have even gone so far as to refund shipping fees in some cases. I think to be successful in business you have to find ways to profit, but not at the expense of losing customers.

 

I am going to hit the show circuit around here over the next couple of months and will start out just selling on Ebay. Eventually I might go with an Add in the paper stating I buy coins etc......but just in case I get lucky and something nice walsk through the door....I need to have cash

[Techno_mike-migration]

Let me give you a simple collector's point-of-view by relating a sale effort I went through about three months ago...

 

I had 7 NGC certified $2.5 dollar Indians to sell. They were an '08 in AU50, an '09 in MS61, an '11 in AU58, a '12 in MS61, a '13 in AU53, a '14 in MS62, and a '14-D in MS61. No color problems or spots. I presented these to three dealers at a show in Arkansas only to be offered amounts between $1100 to $1250. These were all dealers in certified material. Well, anyone that has the least knowledge of the series knows that the '14-D is the second most valuable coin after the '11-D...especially in MS62 and up. I'm not the confrontational type in this area, so I thanked each dealer for their time and left. I ultimately offered the coins the David Lawrence Rare Coins who offered, and I accepted, $2400.

 

Two reasons came to mind for these actions. First, each of the show dealers was trying to low ball me for the quick profit. The second, and hopefully most likely, was that they had no market for the coins, whereas DLRC did.

 

The moral - If you are not interested please don't insult with a low ball offer. If you are then bring an offer that is a reasonable level below market. Most sellers know you are in business and deserve to make a profit on the transaction.

 

As an aside, it was neat to see the coins listed on the DLRC site...and sell for fair margins above what I know was the buy price. Be fair and honest with people...you will gain a loyal following.

[EZ_E]

I presented these to three dealers at a show in Arkansas only to be offered amounts between $1100 to $1250.

 

I had a table at the Jan 2004 Hot Springs coin show and did absolutely no retail business to mention. Arkansas is not the place to be in the coin hobby from my experience.

[truthteller]

First and foremost. There is a learning curve. No one in the coin industry will be your friend. You will be taken advantage of in every deal, unless you know what you are doing. Every dealer does business differently, each has a different set of ethics. You must learn to read the dealer, how to read his/her negotiation tactics. Expect coins to be stolen, deals to be reneged, and outright lies told to you. Your profit margin will be slim, unless you have a good eye and can 'crack and upgrade'. The best defense is knowledge. If you know the market and the series, you will do OK. To do well, you must develop a niche. Overall coin sales and purchases will be difficult. Work with a few coin shops to get started. Ask to see fresh inventory, and pay strong. Buy deals from the shops on a regular basis to establish a good rapport. There is no loyalty in this business. The first with the cash buys the deal. No one will save coins for you, so be aggressive with visiting dealers. Don't give up your regular job until you have developed at least a $20,000 a year net income from parttime coin sales, anything less will be a disappointment if you go full time. Keep expenses low, cheaper hotels, more travel by car to smaller shows at first. Expenses are very deceiving when travelling to major shows, since you are competing for business with thousands of other dealers. You will never likely be 'first shot', so don't ask unless you spend MAJOR money. If you start submitting coins, expect disappointments on grading until you can read the pattern of the grading services. When a really interesting deal shows, step up to the plate and buy it, since those deals are few and far between. Learn when to gamble and when to pass. Your pass rate should be about 70% until you become comfortable with dealers, then your buy rate should be 70% on a regular basis. Keep good records, since coin dealers keep lousy records. Be careful about large cash transactions. If you accept more than $10k from a dealer, you much report it to the government with a special form. There are law enforcement agencies who will set you up to see if you're honest. Learn the laws, $10k trades in gold, silver or negotiable coins($20 libs etc) are considered cash when taken from retail sellers in trade for coins. Good records will save you in an audit. Get proper licensing. If you do considerable business for profit, state licensing is required.(not needed if you only dabble at first). Much, much more.

 

 

TRUTH

[SilverGigolo]

If you are buying inventory from coin shows and coin stores that try to get retail every time how can the inventory be purchased low enough to make a profit? You need to buy wholesale or lower than wholesale. What's the business plan for that?

[kryptonitecomics]

Good info Truth...........

 

I am not planning on quiting my day job for quite some time as I want to be making $30,000 to $40,000 a year before I leave. If that takes my 5 years....then it takes me 5 years.

 

I am not going to rush this...I want to have a cushion for when I make mistakes etc. Once I get enough money together I will place adds in the paper offering to by collections...I feel this would be a great way to get coins wholesale so to speak.

 

I am not going to try the crack out and upgrade approach, I would rather by raw and then submit from there. Yes I agree that one should expect dissappointments, which is why I will stick with the series that I am most familiar with and the best at grading so I can lesson the dissappointments.

 

I know it's a business and everyone is trying to make a buck so I am not planning on trying to be best friends with dealers, but I do want to develop strong business relations with folks in my area.

 

If my plans don't work out, which is certainly a possiblilty then I will keep my day job and sell on the side to finance my collecting interests.

[Newmismatist]

1. Learn to Grade - do NOT rely on the grading services to do what is perhaps the most essential part of coin collecting.

 

2. Concentrate on a few core areas that you are comfortable with - don't try and be all things to all people when you 1st start out.

 

3. Treat all customers the way you would want to be treated by a dealer.

 

4. Above all, Be fair and Be honest - it will pay dividends.

 

I'm sure there's more - but I've never been a dealer

[kryptonitecomics]

1. Learn to Grade - do NOT rely on the grading services to do what is perhaps the most essential part of coin collecting.

 

2. Concentrate on a few core areas that you are comfortable with - don't try and be all things to all people when you 1st start out.

 

3. Treat all customers the way you would want to be treated by a dealer.

 

4. Above all, Be fair and Be honest - it will pay dividends.

 

I'm sure there's more - but I've never been a dealer

 

 

Sounds like a plan

 

I think you left out.....sell Toners to Ron at cost

[Newmismatist]

I think you left out.....sell Toners to Ron at cost

 

Actually not. I prefer that the dealers I purchase coins from make a profit - that way they'll be around to sell me even more coins in the future

[Morgannut]

Don't write Legend Coins asking for advice!!

[James_OldeTowne]

The single most important factor I discovered is almost unrelated to coins and coin-grading at all. It is: have a ready cash reserve at all times. For a long while, I went through a period of being coin-rich and cash-poor, and it was a struggle. I had lots of nice material, but when fantastic deals that would have been quick flips came along, I had no leverage for purchasing them. I sincerely believe you need 25% of your assets to be in the form of good old cash, and to this day, I'm still not up to that point (but getting closer).

 

Good luck in your quest!

 

James

[HaydenTubbs]

The single most important factor I discovered is almost unrelated to coins and coin-grading at all. It is: have a ready cash reserve at all times. For a long while, I went through a period of being coin-rich and cash-poor, and it was a struggle. I had lots of nice material, but when fantastic deals that would have been quick flips came along, I had no leverage for purchasing them. I sincerely believe you need 25% of your assets to be in the form of good old cash, and to this day, I'm still not up to that point (but getting closer).

 

Good luck in your quest!

 

James

From experience on my own behalf this is the best advice so far!

[Chippewa]

Most of all, you will need to practice the art of lying and stealing while looking your victim square in the eye and spewing a major line of BS. It must take practice but there are many that have mastered the art.

 

This is not to say that all dealers practice this art, but enough do to make it a not-unfair observation.

[kryptonitecomics]

Most of all, you will need to practice the art of lying and stealing while looking your victim square in the eye and spewing a major line of BS. It must take practice but there are many that have mastered the art.

 

This is not to say that all dealers practice this art, but enough do to make it a not-unfair observation.

 

Not my style...I would rather fail then have to treat folks that way. For what it's worth I have run into a heck of a lot more good dealers than bad ones....and the same holds true for normal everyday people

[truthteller]

" For what it's worth I have run into a heck of a lot more good dealers than bad ones...."

 

 

 

I used to think that also, when I first entered the coin market. That 'nice' coin dealer will stab you in the back when the deal threshold gets big enough, then cut you loose and say . Don't be overly trusting, or, at least, don't give that impression. After 25 years of coins, I can trust only 5 dealers implicitly. In addition, don't make dealers your friends, unless they live next door. Good acquaintaces is OK, but friend,

 

 

 

TRUTH

[HaydenTubbs]

" For what it's worth I have run into a heck of a lot more good dealers than bad ones...."

 

 

 

I used to think that also, when I first entered the coin market. That 'nice' coin dealer will stab you in the back when the deal threshold gets big enough, then cut you loose and say . Don't be overly trusting, or, at least, don't give that impression. After 25 years of coins, I can trust only 5 dealers implicitly. In addition, don't make dealers your friends, unless they live next door. Good acquaintaces is OK, but friend,

 

 

 

TRUTH

I'm going to have to both agree and disagree with you.While there are plenty of scoundrels in the coin market(as with any type of business)I feel that the good out-weighs the bad.And yes it's good to not show your emotions when buying and selling coins or to get to aquainted with dealers before you have the chance to get know them.

But in my case,I have several dealers who have been my friends since before I was a dealer and just starting to collect.Through the years I've built a trusting relationship with them and am proud to call them my friends.In fact several helped me get started in the business.

Oh,I almost forgot to mention:

Most of them live half way across the country,and I've never met them in person