Learn How to Buy and Sell Coins

Whether you are buying or selling coins, you can increase your advantage when negotiating with coin dealers by understanding how the coin market works behind the scenes. One of the biggest problems I see, as an observer of the coin collecting marketplace, is the wide gulf between what the average consumer expects from a coin dealer, and what the average mint dealer believes he should provide to the consumer. The majority of these differences boil down to trust .

The average consumer thinks he can trust the mint dealer to give him an honest appraisal and pay a fair price for the coins he is selling. The average dealer feels it is right to pay the lowest price he can for the coins, to maximize his profit, and that it is up to the consumer to do his homework. fortunately, by finding this article, you will be on a much better footing when dealing with coin dealers .

coins and paper money

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overview of the Coin Dealing Business

There are two major categories of mint dealers—the jobber and the retailer. The jobber aggressively seeks to bring new material into the market, and frequently attends coin shows, local anesthetic auctions, and runs advertising offering to buy coins. Most of this material is sold in bulk lots to retail-based dealers. In early words, they will buy coins from precisely about anybody but only sell their coins to other dealers. unfortunately, these dealers must pay lower prices in order to make a profit on their sales .

The retail coin dealer gets most of his stock from the wholesalers. Although retail coin dealers may besides attend coin shows and buy locally, most of his clientele income is from servicing a clientele of single-coin buyers. A principal of this type is more probably to pay you higher prices for your coins since they do n’t have to pass through two sets of hands before being sold. But, be careful some local dealers are besides much the worst of the cheat ! This is because the larger dealers are more probably to belong to organizations that require them to subscribe to a Code of Ethics, such as the American Numismatic Association or the professional Numismatists Guild. The number one consideration that anybody who buys or sells coins must consider is recourse. What kind of recourse do you have if things go bad ?

This is not to say that all coin dealers are thieves and crooks. On the contrary. huge majority of coin dealers hold up to a series of ethics and moralities in order to ensure their future business. however, it goes without saying, that there are a few bad apples that can destroy your faith in the coin collecting avocation .

wholesale Coin Prices

One of the best ways to arm yourself against the grok coin dealer is knowing the wholesale prices he pays for his coins. A very widely-used standard in U.S. coins is the Coin Dealer Newsletter, which is printed on grey paper and comes out hebdomadally. People besides referred to it as the “ Grey Sheet, ” or “ CDN. ”

Most professional coin dealers subscribe to this publication, which lists the wholesale values for every major type of U.S. mint and commemorative coins. It besides carries prices for mint sets, slabbed coins, and banknotes called the “ fleeceable sail. ”

An significant concept to remember when discussing Grey Sheet prices is that we are talking about the sweeping market. Two things characterize this market : ( 1 ) Most deals for bulge quantities, so the prices do n’t refer to single coins, and ( 2 ) Deals are minimal service transactions. You ca n’t go up to a coin dealer who has to appraise and grade your collection for you and expect him to pay Grey Sheet “ wish ” prices. however, the Grey Sheet should give you a thoroughly mind of what your coins are worth in a general common sense, so you do n’t sell a $ 1,000 mint for $ 200 .

Coin Dealer profit Margins

As a general rule, the more coarse a coin is, and the lower grade the coin is, the higher the profit margin ( expressed as a percentage of the selling price ) for the dealer must be. The reason for this is that low-grade, common coins are harder to sell. Another reason for this deviation is dollar value. If a principal buys a common date, heavily circulate 1940 Wheat Cent from you, he might pay you 2 cents for the coin and sell it for 5 cents, making a greater than 100 % net income ( but inactive alone 3 cents ). But if he buys a key date, heavy circulated coin, such as a 1931-S Wheat Cent in Good ( G-4 grade ), he might be able to pay you $ 50 for it, evening though he will make merely a 20 % net income when he sells it for $ 60. The dispute is that the key 1931-S coin is likely to sell much faster than the 1940 cent. additionally, the dollar value involved much greater .

Another general rule of wholesale coin price is that the more valuable the mint is, the smaller the profit margin needs to be, percentage-wise. If a mint dealer buys a coin for $ 15,000 and quickly sells it for $ 16,000, he can land a thousand dollar net income. But, if this mint is tied up in his inventory for a farseeing clock before person buys it, there is a large kernel of money that is not earning him anything .

All told, the net income margins for coins are primarily determined by these three factors :

  • How quickly the coin can be resold (market demand)
  • How high the dollar value is (capital outlay)
  • The condition of the coin market overall (market dynamics)

coin dealers must strike a symmetry between these factors to remain profitable .

Coin Dealers and Common Junk

One of the reasons there is such a disparity between what the average consumer expects, and what the mint dealer delivers when it comes to buying coins from the populace is that coin dealers see huge amounts of common “ trash. ” By “ trash ” I mean common date wheat pennies, circulated Buffalo Nickels and Mercury Dimes, break Washington Quarters and circulated Franklin and Kennedy Halves .

People offer coin dealers thus much of this type of fabric that many of them get tired of seeing it. They give such corporeal the casual once-over and offer low-ball prices for it based on long feel. normally, people have already pulled out the more valuable coins, leaving the “ debris. ” The customer feels that his coins have n’t been given a bonny appraisal. What if the dealer overlooked something rare ? Should n’t he look each coin up to be certain ?

People who sell their coins to coin dealers much feel they have not been treated reasonably. The trader might stir his feel around a box or jolt of coins for a minute or two and then make an offer that seems excessively low. even worse are the cases where the principal opens up the blue sky Whitman folders, takes a quick glance, and then offers $ 9 for the solid collection. How can he know what the coins are worth if he does n’t even look at each one first ? Is he trying to rip me off ?

The Realities of Selling Coins

As explained previously, coin dealers see a huge measure of what they commonly call “ junk. ” Although these coins do have a rate, they are indeed often seen for sale but are so hard to sell, that the coin principal is loath to buy them. When person brings in a big can of Wheat Cents, for exercise, most dealers will run their fingers through them to assess the range of dates and median quality of the coins. If they appear to be a run-of-the-mill coarse date, circle Wheaties, the trader will normally offer a flat rate for the fortune. This price is based on his estimate of the weight, or he might run them through a mint counter. Whatever he does, he assuming two things :

  1. That any valuable dates have been removed from the lot already, and
  2. If the seller has not searched the coins, the valuable dates are so rare that odds have it none of the valuable coins will turn up in this lot.

therefore, he pays a “ bad event scenario ” price for the coins. The same is true for most of the coins minted in the twentieth century, whether they are Buffalo nickels, Mercury dimes, Washington quarters, etc. Dealers will make a flying assessment of rate and dates and then make an offer based on the bulk price. frequently, the price he offers is based on the bullion value of the coins. If the trader should happen to find a rare coin in the batch, that ‘s great, but most of the fourth dimension he does n’t, and such coins are not worth the time it takes to check each one .

If you want to maximize the money the dealer will pay you for your coins ; you ‘ll need to sort them into batches and be certain to remove any coin worth ten times face rate or more according to the Red Book. Depending on the mint type, there are several different ways to sort your coins to maximizing the price. For Wheat cents, sorting them by decades will help. On the average, wheat cents in the teens go for 15 to 18 cents each depending on average grade. Cents in the 1920 ‘s go for 10 to 12 plus ; Cents in the 1930 ‘s go for 6 to 8 cents ; and circulated cents in the 1940 ‘s and 1950 ‘s normally go for 2 cents each. Mixed, uncategorized Wheaties go for 2 cents each, or possibly a short more if the trader sees they contain early dates. By sorting them into decades, you ‘ve improved your profit margin. Further classification, into individual years, can besides help if you have adequate to make wide rolls .

Selling Coin Collections

If you have complete coin collections in folders or albums, it is best to leave them in the album. Keep in judgment that dealers can often make actually quick decisions about the value because they have been doing it for therefore long. For exercise, most dealers who buy coins see many blue Whitman folders every month. They can quickly glance at the coins in the booklet and appraise the rate of the collection based on which holes are empty. Without those few rare “ key dates, ” the coins might deoxyadenosine monophosphate well be in a jar or shoe box, and the trader gives you the price accordingly. If the coins he sees in the folder are of higher than normal grade, his offer should be higher, besides, but most people feel slighted when coin dealers merely glance at their collections and then makes an put up .

The lapp principle applies to coins in early folders, such as Dansco albums and other types of mint folders and albums. It entirely takes a moment for person who has the cardinal dates memorized to check to see if they ‘re in your collection .

Selling Coins in Slabs and 2×2 ‘s

If the coins are encapsulated in slab, they are normally worth more than the same coin that would be in a 2 ten 2 cardboard holder. How much more depends on the timbre of the slab. If it is a PCGS or NGC slab, the coin should trade identical near the Grey Sheet price, since these prices are for “ sight spiritual world ” coins which tend to be among the lowest examples in that mark. If the slab is ANACS or ICG, it is still pretty solid, but not deserving angstrom a lot as the top grade PCGS and NGC slabbed coins .

If the coin is in any other slab than these, it is normally worth about the same sum than if it was in a 2×2. The best way to maximize profits for non-premium slabbed coins and 2×2 ‘s is to consult the Grey Sheet and try to get near the “ offer ” monetary value for your coins. Knowing the values ahead of time is the keystone, but remember that the principal needs board to make a net income .

Edited by : James Bucki

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