eBay woes

[brg5658]

The collusion game between big eBay sellers

 

Simplistically, there are two things that drive the price of products - supply and demand. We all took Economics 101, or have heard of this relationship before. For collectors of certified coins who participate in the registry, these two things boil down to:

 

Supply = certified coin population counts (primarily NGC and PCGS)

 

and

 

Demand = Number of collectors interested in a particular set

 

Simple economics, right? Well, not so fast. There are a few additional variables to mix things up.

 

Even if populations are relatively high, if all of the available coins are in the possession of shady dealers, collusion (be it direct or indirect) is a fairly common practice. And collusion amongst all of the big dealers is basically the same as a monopoly (it is by definition an oligopoly). The hot-bed of collusion has really been eBay. This isn't a new development and this is something I'm sure someone else has written about at great length. The way it works is the following:

1) Because eBay allows selling as "Buy it Now", throwing the idea of the auction out the door, a dealer can ask whatever he wants when he/she lists a coin for sale.

2) All of the reasonably priced coins of that type are eventually purchased, leaving the inflated priced coins to sit on eBay for months, if not years at their ridiculous price levels.

3) A new collector to a set wants to complete his/her set with the best coin available. Because of the process I just explained in points 1-2, the only coins he/she can find are on eBay and are at ridiculous collusion-fixed prices. He/she buys a coin at this price -- and gets screwed in the process -- but additionally encourages these sellers to keep their prices high.

 

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The most obvious example of this process in the world at large is the price of diamonds. More than 90% of all of the diamonds mined in the world currently sit in warehouses to maintain a "favorable supply" for the diamond sellers. There is no sugar-coating this practice -- it is PRICE FIXING. Limiting supply available to the general public so as to maintain high prices.

 

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My experiences with this phenomenon in coin collecting are mostly limited to the coins I collect. Thus, I know this problem is particularly rampant for modern coins (or as some of you call them "ultra modern" coins -- or as others call them, "modern trash"). These coins are what I collect, because they are what I enjoy. I'm not going to get into some political diatribe or defensive state to justify this choice. I'm merely using this to illustrate my point in an arena that I know well.

 

EXAMPLE: I have been looking at a particular modern coin for one of my sets for some time. In fact, for well over 9 months. The market for this particular coin is currently pretty stagnant -- of the 6 available examples of the coin on eBay, they are all priced above $600, and NONE have been up for a real auction in the past 9 months. Accordingly, none of them have sold...one has been posted on eBay for more than 18 months!!! These 6 examples are all NGC graded, and come from an NGC population less than 20 coins, none finer. (Strangely, and tangentially, there are 60 PCGS coins of the same grade, none of which have been listed on eBay in the past 9 months.) The Numismedia FMV for the coin is $125, THUS, all of these coins are listed at more than 4 times the current Numismedia FMV. The only PCGS value I have seen listed was $450 about a year ago, but as we all know, that value is highly inflated and modern coins rarely sell at the PCGS value (besides the fact, NONE of these coins for sale are graded by PCGS -- so this is a moot point).

 

I have placed several offers for this coin using the "Make Offer" button on eBay. Four of these 6 available coins are "controlled" by two of the regular culprits...whom I will not name here, but if you want to know who I am talking about you can send me a private reply to this post. These two dealers (er...I mean eBay commercial sellers...) rejected my offers of $400 and subsequent offers of $500. They did not reject these offers with a cordial email reply, but rather by means of the "auto-reject" method on eBay. I have never won an item from these two sellers, and try to avoid them at all cost -- this was just reaffirmation that my opinion of their dealings over the past 2 years was accurate.

 

This week I placed an offer of $400 for one of the remaining 2 coins listed on eBay. I didn't get the automatic-reject message, so that was a first step in the right direction. My offer was recanted with a counter-offer of $550 (halfway between the posted price of ~$700 and my offer of $400). The counter-offer was accompanied with a nice note, and cordial reply. I sent a personal note to the dealer laying out the population facts, the details of why my offer was fair, etc. I received a very detailed email in reply, that was again cordial, factual, and extremely respectful. In summary, we agreed on a price acceptable to both of us, and well below any current price on eBay. THIS seller was a true gentleman and it was reassuring to me that, despite many money grubbing almost criminal sellers on eBay, there is hope and still integrity among some.

 

See more journals by brg5658

[Mark T]

Don’t waste your time on EBAY – try to get the coins from Heritage.

I don’t think there is collusion – they just don’t want to accept your price.

What is this modern coin that is so difficult to get ?

 

[FishyOne]

I just finished my MBA and am back in the job market now. I have time to do a bit of research on this. If you want to, list 2 pieces you're trying to obtain and I'll dig up some anecdotal evidence and report back.

[nunfa0]

I too would like to know what the coin was that caused such consternation.

[brg5658]

Hey guys,

 

Thanks for your replies. I don't have the coin in hand yet, and I don't want to cause any possible grief with the seller until I know for sure it's in the mail and trackable. A lot of the postings on eBay seem to be a part of a bigger "good-ole-boys" society of dealers. I will just tell you it is a 2009 SMS coin, and I will reveal more details once the coin is in my physical possession.

 

Fishy, as for a couple examples of collusion: Try looking for a 2011-P Roosevelt dime graded MS69FT. I purchased one from a site other than eBay for $59 two weeks ago. That site has since sold out, and now the cheapest one you can find on eBay is a "Buy It Now" one for $399. Last week there were still a few selling in auctions for around $150 each. It seems the instant one of these big sellers (one in particular is REALLY bad) puts a "Buy it Now" price on a coin that is astronomically high, all other sellers think they can suddenly ask whatever they want to for a coin. All of the coins of a particular type then get caught up in this "Buy it Now" mentality and the coin becomes un-obtainable. Also, check out the 2010-D Sacagawea SMS coin in MS69 grade. There were several available from a non eBay dealer for many months for $99 + $6 shipping. This site recently sold out, and now the only place you can find one is on eBay for EXTREMELY inflated prices ($675!!!!).

 

Mark, I agree that there are better sites than eBay to get very particular coins. Unfortunately, Heritage doesn't have a large inventory of ultra modern coins outside of the extremely rare error coins. I have been following all posts on Heritage for the past year, and there have been NONE of the coin I was looking for. Furthermore, I think eBay in general is a very good site for purchasing coins once you know what to look for. These particular dealers profit from the occasional clueless or new collector who is trying to start a new set and doesn't know better. Just one bite from a new collector and these dealers can afford to keep their coffers of inventory full and their eBay postings at outrageous prices. It's sad, but true.

 

More to come...

 

Cheers,

-Brandon

[Dudley the 1st]

Thats a big spread for this commem , $300.00 ?

[Thane]

I'll chime in as an ultramodern collector (prefer MS 10c and smaller) ...

 

I've had a few low-pop coins I've needed to sell, all NGC. Some examples of attempts on EBay -

 

1971 MS67 1c - listed a few times, auctions starting prices $200 or so, BIN OBO $300, BIN OBO $200 ... it took moving the starting price to $98.50 to get it to sell ... the hammer was around $150. Numismedia $375 at the time of sale (pop ~ 20?).

 

1973 5c MS67 6FS - listed a few times, I've tried to price according to ha.com historical sales (there are no direct comparisons, but similar coins with slightly higher pops or more FS examples sold anywhere from $400-$1500 as I recall). No takers yet. I ran a reserve auction once, $.01 starting price, the hammer was only $250 - no sale. From my private conversations with potential buyers, one recent EBay auction (I missed it, never watched it) ended maybe $650.

 

2010 10c MS68 FT - listed a few times, I'll confess, my expectations were skewed by the Big Seller Monopoly Skewing Prices game. But with a pop 2 and none higher than MS66 at PCGS, I really thought this should be a $2000+ coin. I'd now settle for less than half that, but no luck. I think the lowest auction I started was about $800, and the same for BIN OBO. You'd think somebody out there would venture even $150 or $250 for a best offer, but less than 50% offer seems pretty rare ... and is usually taken poorly. (And yes, I would never sell for 50% of my BIN).

 

===> IS PART OF THE PROBLEM EBay's saved search results? It seems that if a result is BIN OBO, the daily email report only says it's BIN. So I don't check to see if a seller would take less than the $$$ I see in the email.

 

The 2005-2010 top pop SMS coins seem especially bad. I've been watching 5c and 10c long enough to notice that $.99 auction sales typically end about 30% (or less!) of the lowest BIN out there. So a "$100 coin" auctions for $24. I don't understand why proofs are so highly valued, when the SMS market seems more rare in high pops. Having a nice shiny coin is not a good enough explanation for me - that's why you have a RAW collection, maybe in OGP.

 

[coinman_23885]

I'll chime in as an ultramodern collector (prefer MS 10c and smaller) ...

 

I've had a few low-pop coins I've needed to sell, all NGC. Some examples of attempts on EBay -

 

1971 MS67 1c - listed a few times, auctions starting prices $200 or so, BIN OBO $300, BIN OBO $200 ... it took moving the starting price to $98.50 to get it to sell ... the hammer was around $150. Numismedia $375 at the time of sale (pop ~ 20?).

 

1973 5c MS67 6FS - listed a few times, I've tried to price according to ha.com historical sales (there are no direct comparisons, but similar coins with slightly higher pops or more FS examples sold anywhere from $400-$1500 as I recall). No takers yet. I ran a reserve auction once, $.01 starting price, the hammer was only $250 - no sale. From my private conversations with potential buyers, one recent EBay auction (I missed it, never watched it) ended maybe $650.

 

2010 10c MS68 FT - listed a few times, I'll confess, my expectations were skewed by the Big Seller Monopoly Skewing Prices game. But with a pop 2 and none higher than MS66 at PCGS, I really thought this should be a $2000+ coin. I'd now settle for less than half that, but no luck. I think the lowest auction I started was about $800, and the same for BIN OBO. You'd think somebody out there would venture even $150 or $250 for a best offer, but less than 50% offer seems pretty rare ... and is usually taken poorly. (And yes, I would never sell for 50% of my BIN).

 

===> IS PART OF THE PROBLEM EBay's saved search results? It seems that if a result is BIN OBO, the daily email report only says it's BIN. So I don't check to see if a seller would take less than the $$$ I see in the email.

 

The 2005-2010 top pop SMS coins seem especially bad. I've been watching 5c and 10c long enough to notice that $.99 auction sales typically end about 30% (or less!) of the lowest BIN out there. So a "$100 coin" auctions for $24. I don't understand why proofs are so highly valued, when the SMS market seems more rare in high pops. Having a nice shiny coin is not a good enough explanation for me - that's why you have a RAW collection, maybe in OGP.

 

With all do respect, I think the results have little to do with Ebay's email report. The economy is relatively poor, and people have less money to spend on luxury coins, especially those that are one federal reserve brick away from losing most of their value. While FS or FT nickels may be admittedly hard to come buy, I'm sure that there are dozens in a kids' mint sets somewhere that no one every bothers to submit.

[e1cnr]

for the type of coins you mention, I would suggest Teletrade

or finding and submitting your own raw

 

these top pop coins are not as easy to make as you think

= try buying 50 sets and submitting the best examples and see how you do

[James_OldeTowne]

You have basically spelled out reasons to avoid eBay completely. It's a corrupt company, and one that encourages other corruption, so why spend your money in support of someone like that?

 

Find yourself a legitimate dealer and work with him. You'll be directly helping someone feed and clothe his family, and who knows, you might make a friend.

[Gilbie]

Hi guys, this is interesting , I guess that is why I love it, but I figured I would throw this in their, I belong like most of you to a coin club, it is fairly large, about 300 members, and every quarter or so, we all pitch in and split the cost of buying 200 mint sets to see if we can come up with a top pop, we have been doing this for 7 years, and to this day that is 1400 sets and still we have gotten even one top pop, so that gentleman who said it is not easy , is exactly right, I have heard numbers like maybe one out of every 1000 sets, so the odds are not in our favor, but truthfully if they are really looking for that special coin that is the way it should work. Then on the other hand you could buy one set send it in and just have the special coin. Have a great day and dont think about it too much or it will drive you crazy. Gilbie

[Jeffrey Cardona]

I have run across the same problem with 50c Modern Commemoratives. I need the 1996 soccer and swimming coins to finish up my set. The BIN prices for 69 an 70 are 2 and 3 times FMV for the ones I have found on Ebay. I don't mind paying more then FMV but those asking prices are crazy. But I am very patient and can wait for however long it takes for one to show up some place for a far price.

[Texans Coins]

I have had the same problem trying to locate some Kennedy Proof halves.

[coin guy dan-migration]

i am a top rated seller on ebay, corruption is rampant on the site.BUT,there is always a but. i have found there is also very honest and reliable coin dealers as well there. as with every day life,one must weed out the good and the bad of people you must deal with. one thing is this, the buyer has the ultimate say so. NEW TO THIS BOARD. DANNY FRICKER. oh,i only sell junk silver 90% us silver coins on the site,to feed my peace dollar addiction.haha