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Vol 08 No. 07 July 1994

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About This File

We received a telephone call this month from a reader who 'I wanted to know where to buy coins at wholesale. The answer, strangely enough, is from the same place you buy retail! There seems to be a perception among some collectors that there are mysterious markets that the dealer gets tapped into and the collector doesn't. This perception is perpetuated by colorful comments about certain types of individuals showing up at coin shows with bags of coins or dealing out of hotel rooms with coins by the kilo.

To be sure, there are occasions when coins are sold out of hotel rooms, and there are transactions that include coins by the kilogram. But these transactions constitute only a small fraction of the wholesale trade. Most coins sold at "wholesale" are sold on the same bourse floor, and by or between the same dealers that every collector has access to. Note that wholesale is enclosed in quotes - we'll get into this momentarily.

The primary criteria which determine the difference between a wholesale and a retail transaction is the level of business transacted. This does not necessarily mean the total dollars spent but includes such factors as frequency of purchases, method of payment, types of coins purchased (rarities or generic types), and the nature of the purchases (individual picks or lots). Also, not to be underestimated is the rapport between the buyer and seller. Every dealer and collector find that it is easier to buy from certain sources than from others.

All of the factors mentioned here are as applicable to the collector as they are to the dealer. I have yet to meet the dealer in ancient coins who has a rigid policy of discounts to fellow dealers while excluding discounts to collectors. The amount of discount on a sale, depending on the factors mentioned, will fall somewhere between "wholesale" and retail. I have often witnessed the sale of coins to dealers and collectors, from the same source, at exactly the same price. In fact, some dealers actively advertise "wholesale to all". The whole notion of wholesale-retail, at least in the fi eld of ancient coins, is a meaningless distinction.

The pricing of ancient coins is so completely subjective that retail to the eye of one beholder is wholesale to the next, assuming that the criteria for distinction is a percentage of mark-up which hopefully translates to profit. This may be disconcerting to some, but it is a glorious opportunity for others. What it really means is that every coin must stand on its own merits and seek its own price level. There simply isn't any reliable price guide for ancient coins. So, what is one to make of the retail price tag on a coin offered for sale? Is this really the price? Can I get it at a wholesale price?

Let's take, for illustration's sake, a coin with a retail asking price of $XXX. If this coin is seldom offered for sale, and is new to the dealer's stock, it will probably not be discounted very greatly (wholesaled) either to a collector or to another dealer. After several months of exposure to the market, if the coin remains unsold, it may succumb to an offer of 20% or 30% less. It is now wholesale to anyone who makes the offer. That is, of course, if $XXX was truly a fair retail price. On the other hand, if every dealer on the bourse floor has an example of the same type of coin, the retail price will be more clearly defined. Although the coin may become a more likely candidate for discounted sale, the wholesale-retail spread will probably not be as great.

The point of all this meandering is to demonstrate that the terms wholesale and retail are really subjective. Even if they could be defined, the criteria by which a buyer becomes qualified to make a wholesale purchase is nebulous. Aside from the aforementioned hotel room deals, there simply is not a distinction between the wholesale and retail markets for most ancient coins.

How does one buy ancient coins at wholesale? Ah, that is another question! First of all. ASK. If you plan on buying several coins, ask about quantity discounts BEFORE you make your selections. If you are buying from a hoard, ask for the "pick" price and the random lot price, they may be substantially different. If you are simply bargain hunting, ask the dealer what they might have in stock that can be discounted for a quick sale. Also ask to see a dealer's new purchases, they often will sell "newps" for less if the deal is a "quick flip". It also pays to come early and stay late - not that you have to camp out in the interim. Early in a show. dealers are anxious to cover costs. Toward the end of a show some may be desperate to raise cash or may just be feeling generous because it's been a good show and your purchase is icing on the cake. Repeat business is as important to a coin dealer as it is to any other businessperson. If you find sweet water, go back to the same well.

Some things that the buyer should NOT do in an attempt to obtain a better price are:

- never berate the condition of a coin. If it does not meet your criteria just pass it by without comment.

- don't play one dealer's stock against another. If the other dealer's coin is really better or cheaper then buy it!

- don't ask for a lot price and then try to pick one coin at that price.

- don 't expect a dealer to hold a coin for you while you go look for one at a better price. If the dealer offers this courtesy, respect and appreciate it.

Buying coin s takes talent. but it's not a difficult skill to learn- and the learning is so much fun!

If you see us in Detroit, we'd be pleased to hear your point of view.




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