List some overhead costs that dealers incur, but collectors don''t think about!

[James_OldeTowne]

In a WYNTK thread from yesterday , I mentioned a few of the factors that contribute the a coin dealer's overhead cost. For example, the cost of traveling to and from shows, meals, coin insurance and salaries were discussed. The thread generated a couple of interesting PMs from full-time dealers who presented some other factors that I didn't think of. I am very interested in hearing from you about other overhead-cost items that most collectors either take for granted, or just never think about.

 

A couple of suggestions from those dealers included:

 

1. absorbing the financial damage from a collector who takes coins on approval, and never pays for them - just before "disappearing" forever

 

2. stolen coins

 

3. coins given to YN auctions

 

4. numismatic library

 

Your suggestions?

[gedis3]

Physical Security -- safes, alarm systems and monitoring, safe deposit boxes, sidearms, armed escorts for the higher-end dealers.

[jgrinz]

Advertising - Giveaways etc

 

All affect the bottom line but a needed necessity for the FULL time dealer.

[MikeKing]

Nerve pills

[IGWT]

My goodness, James, the list of expenses incurred in doing business is long, and I don't know why it would be any different for a coin dealer than any other enterprise. For starters, don't forget to take the following out of the buy-sell spread: insurance, phones, wages, utilities, employment benefits, employment & sales taxes, rent, travel, continuing education, computer hardware & software, subscriptions, association dues, and (except for you ), grading fees.

[Wihlborg]

Cleaning bills to get the mustard stains out of their shirts from the hotdog they were eating while selling you a coin.

 

Of course I’m kidding, but I do see a lot of dealers at shows eating while trying to conduct business.

 

John

[Stanley]

Good topic James.

 

Just something from my view. A few thoughts for the process.

I do not want to make my reply longer than James post.

 

For the last ( edited to correct: 26 years ) of my life I have been my own boss. What I do is not important, however the way I do it is, at least to me it has been.

 

I’m sure this thread is aimed at making buyers aware of the cost associated with purchasing coins. And for the most part… maybe it has, but IMO it has also left some suspicious or confused. There are many other factors which were not mentioned. Revealing the basic cost of doing business to those who are less informed and for the sake of educating YN is good.

 

Ethics, integrity, and staying true to your convictions

 

Sellers are optimist and look for opportunities. This is what we / they do. Nothing wrong with it.

 

Buy a product for a lower price than you can sell it for. There are many strategies for this. No one can stay in business for 2% profit. The profit which one makes on an item should never concern any reasonable buyer.

 

Full time dealer, this persons whole lively hood depends on there success. There caring the whole load and all the associated risk.

 

Part time dealer has another job to count on for income.

 

 

The cost of doing business is not all that grim: Being your own boss has its rewards as well as its risk.

 

1. A person has to eat whether there at home or on the road, if you eat or entertain guest for business purposes you call it a business expense. (tax deduction)

 

2. You stay in a motel for a few nights in Orlando. Although the wife takes the kids to Disney Land the room and gas are still business expense. (t d)

 

3. A nice blazer and 5 pair of dress slacks $600.00. Put your business logo on the blazer and you have a business expense. (t d)

 

4. $40,000.00 Yukon SUV for business expense. (t d)

 

5. The list can get much longer, folks who are in business to earn a living all have different life styles and goals and certainly have the right to conduct there business the way which they like. The open market will decide who succeeds and who fails.

 

Edited to add: who succeeds and who fails sounds much too depressing, please allow me to change that to who stays at it and who seeks other opportunities.

 

 

 

[WaxonWaxov]

But then there are the benefits everyone seems to forget about..

 

1) Not having to answer to 'the man'

2) Doing something they actually enjoy unlike most people

3) Set your own hours

4) Wear whatever the heck you want to the 'office'

5) Take as long a vacation you want, when you want.

6) Have all the 'inside' information

 

 

 

Here's a question...

Are more dealers getting away from having brick-and-mortar stores?

 

I remember when I lived in Illinois there was a company called Palatine hobby. They sold everything from Pine Car Derby stuff to model railroad stuff to dollhouse stuff and everything in between. Problem was, every time a customer came into the store, they had to pull their attention away from thier internet business. Finally, they closed the brick-and-mortar store which had been open for nearly 30 years in favor of moving into an industrial park and being internet-only.

[James_OldeTowne]

There's no question that there are benefits to being a prefessional coin dealer. If I were one, then the biggest benefit might be just the opportunity to own (if only fleetingly) so many cool coins. But informally, it seems to me that there are many more posts that knock the profession than support it. Just me I suppose .

 

I do want to note that since I am not nearly a full-time professional dealer (it's still just a hobby for me), my perspective on the business is much different from someone who does it for a living.

[Stanley]

James, I truly hope you found my post supportive in nature although maybe a bit all over the board.

 

And yes it would be an awesome benefit as a full time dealer to be holding so many nice coins. However, just being able to enjoy the hobby at ones own level and attend the many shows and functions, do some socializing and trading to support there hobby should make one rich beyond all measures.

 

I think we will always have those who knock this profession and other professions as well. I wouldn’t worry about them. They choose to stay clueless and there is nothing we, you, or I can do about it.

[cpm9ball]

While I agree that there are many hidden costs to running a business, I would hate to see a sales receipt that listed all of the surcharges....................Suggested retail price...............$97.50.................Total cost with surcharges..................$568.44!

 

Chris

[WaxonWaxov]

Then there's also the factor of things you enjoy become tedious when they're your profession.

 

I loved computer programming until it became my profession. Now I do almost zero 'just for fun' programming.

[texasrichard]

You probably should not assume that all or even most "collectors" don't realize the costs associated with being a "dealer". As a "collector" I realize the expenses associated with being in business and I realize that these costs are passed on to the consumer (collector). The same is true for any business. Granted there are those who want to know what you paid for a coin (as a dealer); and they don't want to pay a fair value for their purchase. I am sure there are plenty of annoying buyers out there.

 

In the end, as a collector...... I am buying "the coin". Whether or not I actually make the purchase would depend on the dealers ability to purchase the coin and run his/her business efficiently, thus allowing them to sell me the coin at a price that I would be willing to pay. Just like in any business; I am sure that some people are better at it than others.

 

Just my opinion, not meant to stir any pot.

[Tradedollarnut]

Fur coats and Bentleys.

[Stanley]

Fur coats and Bentleys.

[Architecht]

Cleaning bills to get the mustard stains out of their shirts from the hotdog they were eating while selling you a coin.

 

Of course I’m kidding, but I do see a lot of dealers at shows eating while trying to conduct business.

 

John

 

[gmarguli]

Cost of joining meaningless, toothless organizations so they can put a sticker on their front window and a plaque on their wall and unsuspecting people will think they're dealing with someone who has ethics and won't rip them off.

[Coin]

Business cards ....I used to get lots of them when I first went to shows.

 

Credit card processing fees ....if they have a Novus or card clearing service.

 

Dental bills ....if their offer is THAT insulting .

 

Custom pocket protectors...man, where do they still get those things/why?

 

Display cases....so deep-discount shoppers can't RGW ( reach-grab-walk)

 

Lamps ... a must if the show has those lousy stadium lights overhead.

 

Forklift rentals.........if they are gonna stock hub-capped sized medals like Chris (CPM9ball) showed me at the last Florida show ( Ubber-spectacular medal BTW....I consider it totally impressive and worth the wrist injury to behold the behemoth in-hand(s) )

 

Subscription service to Greysheet and other Dealer network 'sheets'........and a large magnifier pane to hold while trying to read the microscopic print.

 

Something money can't buy...patience....lots of it .

 

Website and PC .....tax deductible , but no website...no secondary upsales.

 

Upsale items also.....coin protectors , albums , other nice go-withs to improve the profit of each sale ....one dealer at the ANA sunday sold a coin and his cool lighted magnifier to this guy standing next to me...what a salesman,eh?

 

 

If a dealer wore coin jewelry on his suit , could he deduct the cost of the suit as a display rack?

 

I would assume dogfood...for the horse sized dog at one dealer from VA's table at the recent Spartanburg,SC show ( security device? advertising/grabber... the ladies flocked to the big 'doggie' and dragged their hubbies along when they did....)

[IGWT]

Cost of joining meaningless, toothless organizations so they can put a sticker on their front window and a plaque on their wall and unsuspecting people will think they're dealing with someone who has ethics and won't rip them off.

 

Gotta spend money to make money.