What does a dealer typically pay for coins?

[diggummup]

Here's the scenario; I'm at a coin show a couple weekends ago.There's an older guy in there selling coins to a dealer.Hundreds of old silver dollars.I walked in on the end of that deal so all I saw was the old guy counting hundred dollar bills.Then he preceded to take a coin folder out that was full of Franklin halves.I don't know how many the folder held,but at a quick glance it looked like 20 or so,it was a black folder made for the franklin halves specifically and it was full.Anyway that particular folder was full of what he called BU 1948 Franklins.They looked like it.So he tells the dealer he found 15 of these folders in a drawer at his house and would he be interested in them at about 60.00 for the one folder he had with him.Maybe he meant 60.00 each for all 15 for a total of 900.00.I only saw one folder.Anyway I didn't want to be nosey and I was just there to get some 2x2's and a new redbook.So I was in no position at that time to even offer to buy the one folder from him,which I would have done in a heartbeat for 60 bucks.60 bucks is not much more than melt value.These things looked uncirculated ms-63 or better at a glance which is about how close the dealer looked at them.So my question is,why wouldn't this dealer be interested in them when they list for 4-6 times that much in the book in that condition?What do these guys base thier prices on for which they buy coins?I would think that 20-25% of book value is less than fair, actually I would want a lot more than that.Do they buy at scrap value,regardless of condition or what? BTW-I'm going back next time with some cash on hand, and i'll be looking for someone selling thier coins, and wait for a dealer to say no again then i'll offer to buy.If a similar situation ever arises again that is.

 

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[jeff of pa]

I Don't think all dealers are the same.

But I would say most buy for 1/3 the value.

 

[Klaatu]

Obviously dealers must pay less for a coin than what they will sell it for. Otherwise he won't stay in business long. And also obviously a dealer wants to pay as little as he can for his coins.

Some dealers will pay 90% or more of the selling price if they know they can sell the coin quickly. Others may pay 2/3 of the selling price, especially if they know they must hold the coin for a while (and tie up their money). A dealer that pays only 1/3 of the selling price is a ripoff.

What is a coin worth? Just like with anything else, it is worth what a ready, willing and able buyer will pay. Books and magazines are full of coin prices but some are completely unrealistic. The most accurate prices are based on actual recent sales. I subscribe to the Coin Dealer Newsletter (aka the Grey Sheet) which (in my opinion) has the best and most current pricing data available.

Just to give you an idea of the difference between prices in different publications let's look at an MS-60 1860 IH cent. My 2005 Red Book says the coin is worth $250. The PCGS Price Guide (http://www.pcgs.com/prices) lists the same coin at $225. My latest Grey Sheet lists the prices as $145 (buy) and $160 (ask). (Buy and ask are the prices dealers will buy and sell the coins for in transactions with other dealers. These prices do not apply in transactions with the public. A dealer is likely to offer you less than the Buy price and charge you more than the Ask price if you are not a dealer.)

Hope this helps.

 

[diggummup]

Thanks jeff and klaatu,that clears things up alot.Coin Dealer Newsletter aka grey sheet.Thanks for the info.

 

[Charlie P. (NY)]

The dealer doesn't make a cent until he sells the coins. Who would want to buy 60 (or 300!) of the same year of a coin? The seller was a one man market glut. He might sell five at a time, but 300? Possibly someone hedging just on the condition and silver content would buy in volume. Unless the dealer has a seller waiting or in mind that's a risk. But, that volume of the same coin would appeal to an accumulator or investor but not necessarily a collector. Everyone saves the first and last year of a coin's run, so it is common to find uncirculated or about uncirculated examples of the first and last. And poor Ben was never very popular.

 

[Klaatu]

diggummup,

Look into a subscription to the Grey Sheet at www.greysheet.com . You can get everything from a single copy of any weekly, monthly or quarterly issue to a full subscription. I figure that I can save the price of my subscription on one coin purchase by knowing what current prices are.

 

[diggummup]

The dealer doesn't make a cent until he sells the coins. Who would want to buy 60 (or 300!) of the same year of a coin? The seller was a one man market glut. He might sell five at a time, but 300? Possibly someone hedging just on the condition and silver content would buy in volume. Unless the dealer has a seller waiting or in mind that's a risk. But, that volume of the same coin would appeal to an accumulator or investor but not necessarily a collector. Everyone saves the first and last year of a coin's run, so it is common to find uncirculated or about uncirculated examples of the first and last. And poor Ben was never very popular.

That makes sense,plus the fact that this same dealer just handed over a thousand or so for the stacks and stacks of morgans and peace dollars the guy brought in.I guess i'm just thinking about the melt value alone as an investment.

diggummup,

Look into a subscription to the Grey Sheet at www.greysheet.com . You can get everything from a single copy of any weekly, monthly or quarterly issue to a full subscription. I figure that I can save the price of my subscription on one coin purchase by knowing what current prices are.

Thanks klaatu,I will look into it.

 

[Sub2001zero]

First of all that book of halfs in unc con. sell for about $500.00 afor all 35 coins.
I frends with coin dealer. He pay five x face for commom silver or for better coin 50% of book price or a little less or a little more, so he can make a profit. The coin deal that i know he would given about 250. or 300. for al the year in UNC

The guy ask for 60.00 for all thoes coins is a low life scum ripping people off