Jeff Garrett: Big Business for Numismatics
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Total sales might have increased, but numismatics is a tiny sub-segment of the tiny collectibles category.

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@RWB  There is a non-sequiturial quality to your response. What happened to the old RWB we've grown to love, admire and respect? 

Are not the planets and Milky Way, other galaxies all a tiny sub-segment of the infinite university at large?  The author of the article the Administrator (and OP) cites makes a convincing argument that, at least for now, things are looking on the up and up. He cites figures he asserts are not required for reporting to the government.  This is incontrovertible proof. The general direction of the stock market, over time, is up.  It's like the weather.  Cold in winter, at least where I am. Warmer in spring. Cooler in autumn. And cold all over again. Gradually, over time. Almost imperceptibly, punctuated by cold and hot waves.

Forget the baseball cards, deltiologists and hand-blown emerald pedestal eye washers. The rare coins and bullion markets are on the move.  🐓

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Jeff Garrett always makes for some good reading but I have 2 quibbles with his commentary:

First, he says that during his last FUN auction he only had $5 MM in sales.  For a 3-4 day event, that's not bad at all for a 1-man shop (or however many people his dealership employs).  Heritage's sales figures cited employ hundreds of people and have multiple sales/auctions going on for close to 90 days during the quarter.  So $5 MM during a few days of a convention going back 35 years isn't bad at all.

Second,  “the aggregate prices realized for U.S. rare coins sold at major public auctions in 2020 totaled nearly $369 million. The aggregate total was $325 million in 2019; $345 million in 2018; and $316 million in 2017.”  I don't know what "major public auctions" indicates and it might not include regular sales, either.   If the Heritage figures are correct, and if you strip out non-U.S. coins, the bulk of their sales must be U.S. rare coins and I would think with Ebay and other online firms that the figures cited above should be HIGHER.  Thoughts ?

 

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On 7/30/2021 at 10:15 PM, GoldFinger1969 said:

Second,  “the aggregate prices realized for U.S. rare coins sold at major public auctions in 2020 totaled nearly $369 million. The aggregate total was $325 million in 2019; $345 million in 2018; and $316 million in 2017.”  I don't know what "major public auctions" indicates and it might not include regular sales, either.   If the Heritage figures are correct, and if you strip out non-U.S. coins, the bulk of their sales must be U.S. rare coins and I would think with Ebay and other online firms that the figures cited above should be HIGHER.  Thoughts ?

 

I read the article.  I was initially thinking he was referring to sales of US coins but you are correct, it's auction coin sales within the US.

I don't consider the above numbers impressive, not for recent history.  If accurate, it's equivalent of two to maybe four high profile paintings.  The trend isn't noticeably increasing either.

The numbers seem somewhat low.  I have not read it recently but Heritage used to provide a press release on their website and elsewhere with an annual breakout of their volume.  My recollection was that their sales alone exceeded the amounts Garett reports.  However, it would also include turnover not attributed to auctioned lots.

My thinking of the article that it's primarily financial promotion.  I get his point that it matters to coin buyers due to future resale.

It's a good thing, but to a point only for those who are primarily buying as a collector, as opposed to "investor".

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It still baffles my mind that more transactions of higher end coins don’t happen between collectors. We are sending loads of coins to auction to pay 10%-15% to the auction house who sells it to another collector who pays 10%-15% in buyer premium. I realize it isn’t the point of the article but that’s my first though every time I see auction figures. When was the last time any coin above a couple hundred dollars was listed for sale on the marketplace? Both sides could potentially benefit 15% 

Edited by Woods020
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On 7/31/2021 at 4:00 PM, Woods020 said:

It still baffles my mind that more transactions of higher end coins don’t happen between collectors. We are sending loads of coins to auction to pay 10%-15% to the auction house who sells it to another collector who pays 10%-15% in buyer premium. I realize it isn’t the point of the article but that’s my first though every time I see auction figures. When was the last time any coin above a couple hundred dollars was listed for sale on the marketplace? Both sides could potentially benefit 15% 

I guess alot of heavy-hitters don't know one another and they think that the proverbial and promised "bidding war" will lead to higher net proceeds even after paying a 12-20% commission. xD

I think the auction houses provide great services and I believe in paying-up for quality (access to lots of buyers/sellers, historical archives, write-ups on coins, historical research, etc.).  I realize all that doesn't cost nothing, so someone has to pay for it.  

But I think commissions can come down a bit with more competition as we are seeing with GC.

Edited by GoldFinger1969
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On 8/1/2021 at 12:51 AM, GoldFinger1969 said:

I guess alot of heavy-hitters don't know one another and they think that the proverbial and promised "bidding war" will lead to higher net proceeds even after paying a 12-20% commission. xD

I think the auction houses provide great services and I believe in paying-up for quality (access to lots of buyers/sellers, historical archives, write-ups on coins, historical reseaerch, etc.).  I realize all that doesn't cost nothing, so someone has to pay for it.  

But I think commissions can come down a bit with more competition as we are seeing with GC.

I agree. I respect the auction houses and Heritage, GC and Stacks do amazing work. I just received two auction catalogues from stacks for upcoming auctions that put Vogue to shame with quality. Some coins it makes sense to auction, but I would love the opportunity to buy some higher end coins and save 15% on my end. It would make a big difference on some of them.

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On 8/1/2021 at 1:51 AM, GoldFinger1969 said:

I guess alot of heavy-hitters don't know one another and they think that the proverbial and promised "bidding war" will lead to higher net proceeds even after paying a 12-20% commission. xD

I think the auction houses provide great services and I believe in paying-up for quality (access to lots of buyers/sellers, historical archives, write-ups on coins, historical reseaerch, etc.).  I realize all that doesn't cost nothing, so someone has to pay for it.  

But I think commissions can come down a bit with more competition as we are seeing with GC.

If you are selling a really expensive US coin, the commission isn't 10% to 15%.  It's noticeably less from what I have read on coins forums.

If you are selling typical expensive US coins maybe in the $5,000 to $50,000 range, these coins aren't hardly ever even scarce.  I'm not sure there is much incentive for many collectors to buy it in a private transaction.  I don't know what most other collectors think about this option.

With South African Union which used to be my primary interest, I concluded years ago that most of the rarest and hardest to find coins do sell this way.  There are many coins (proportionately) which to my knowledge have never sold publicly or do very infrequently. I'm not referring to just scarce coins based upon grade, but the coins collectors want to buy the most.

Some might have sold through local dealers but on one occasion, I asked one of the more prominent ones how often they had sold the 1931 silver in better grades and their answer was none of them.  This was around 2008 and they have been in business since the late 60's.  Another collector summarized offers from dealer price lists (the better known dealers) over several decades.

Still ZERO for the 3P, 6P, shilling, florin and half crown, except in low or very low grades and even them still almost none.

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On 7/31/2021 at 1:26 PM, World Colonial said:

My thinking of the article that it's primarily financial promotion. 

True indeed.  To be filed under "necessary evils."  😈

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On 8/1/2021 at 12:11 PM, Woods020 said:

I agree. I respect the auction houses and Heritage, GC and Stacks do amazing work. I just received two auction catalogues from stacks for upcoming auctions that put Vogue to shame with quality. Some coins it makes sense to auction, but I would love the opportunity to buy some higher end coins and save 15% on my end. It would make a big difference on some of them.

(thumbsu  Indeed, RWB's Saint-Gaudens book relied heavily on the HA archives and there is so much great information on coins in the archives, too.  You can cut-and-paste it and save it on your PC or smartphone as I've elected to do with all the Saint information.

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On 8/1/2021 at 12:32 PM, World Colonial said:

If you are selling a really expensive US coin, the commission isn't 10% to 15%.  It's noticeably less from what I have read on coins forums.

Maybe from time-to-time depending on who the auction house is, but when I saw the Duckor 1927-D Saint sold at FUN 2020 the winning bid was $1.8 MM and the total cost was $2,160,000 -- 20% mark-up.  No discount on a trophy coin and publicity generator at all.

Now assuming that coin went off on GC with the same bidders and bidding.....total cost would be $2,025,000 so the buyer would save $135,000.  Or maybe the bidders would go a bit higher since the total cost (with bp) is what they focus on.  Which would mean a few more bucks for the seller. xD

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On 8/2/2021 at 10:19 AM, GoldFinger1969 said:

Maybe from time-to-time depending on who the auction house is, but when I saw the Duckor 1927-D Saint sold at FUN 2020 the winning bid was $1.8 MM and the total cost was $2,160,000 -- 20% mark-up.  No discount on a trophy coin and publicity generator at all.

You're bringing up a point which has been discussed previously where posters seem to have different opinions.

The buyer's fee won't in and of itself increase the final price to the buyer.  It depends upon the bidder.  They can just lower their bid to stay within their limit.  It's buyer specific but I doubt bidders at this level are completely ignoring it in deciding how much to pay.

One point which I did not successfully make in my last post is that I don't see most buyers having much incentive to engage in a private transaction, UNLESS they can "split the difference" , buy at a discount to the "retail" price.   I'd buy directly and pay (somewhat) more for a coin in my series but that's only because these are actually hard to buy.  But if I do, I'd be guessing at the value, as there is no established price.

Also, take a look at the "Make an Offer" available in Heritage.  Even for coins which sold recently, mostly (hugely) inflated ask prices for overwhelmingly common coins,

If you remember my prior posts, I noted that outside of a very low number of Indian Head eagles and Saints, any 20th century US coin outside of the 1913 LHN and patterns can be bought at any time, outside of some arbitrary TPG label or specialization.  It's more difficult for 18th and 19th century, but still mostly in a narrow sense, as only a very low proportion can't be bought in "acceptable quality" on short notice, as in maybe a few months.

A private sale creates a lot more uncertainty with elite coins like a 27-D Saint.  On the PCGS forum, one poster purportedly did that with the MS-67 Pacquet reverse DE less than a year ago and now it's coming up for sale.  Did the prior seller misjudge the market and sell it cheap?

Maybe and we're about to find out.

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On 8/2/2021 at 11:35 AM, World Colonial said:

On the PCGS forum, one poster purportedly did that with the MS-67 Pacquet reverse DE less than a year ago and now it's coming up for sale.  Did the prior seller misjudge the market and sell it cheap?

Maybe and we're about to find out.

You cannot rule out unanticipated hardships be it due to financial considerations, e.g., loss of home or life (tornado outbreak) or job, foreclosure, eviction, pandemic, including health, etc.  Dealers can detect the distinct scent of fear, panic, desperation, ignorance and a whole host of attempts to sell at what would outwardly appear to be imprudent times to sell, from a mile away.  The very fact that someone would consider selling to a pawnshop or include a "best price" option on an on-line listing is akin to blood in the water to a shark.  🐓

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On 8/2/2021 at 11:35 AM, World Colonial said:

You're bringing up a point which has been discussed previously where posters seem to have different opinions.

The buyer's fee won't in and of itself increase the final price to the buyer.  It depends upon the bidder.  They can just lower their bid to stay within their limit.  It's buyer specific but I doubt bidders at this level are completely ignoring it in deciding how much to pay.

One point which I did not successfully make in my last post is that I don't see most buyers having much incentive to engage in a private transaction, UNLESS they can "split the difference" , buy at a discount to the "retail" price.   I'd buy directly and pay (somewhat) more for a coin in my series but that's only because these are actually hard to buy.  But if I do, I'd be guessing at the value, as there is no established price.

Also, take a look at the "Make an Offer" available in Heritage.  Even for coins which sold recently, mostly (hugely) inflated ask prices for overwhelmingly common coins,

If you remember my prior posts, I noted that outside of a very low number of Indian Head eagles and Saints, any 20th century US coin outside of the 1913 LHN and patterns can be bought at any time, outside of some arbitrary TPG label or specialization.  It's more difficult for 18th and 19th century, but still mostly in a narrow sense, as only a very low proportion can't be bought in "acceptable quality" on short notice, as in maybe a few months.

A private sale creates a lot more uncertainty with elite coins like a 27-D Saint.  On the PCGS forum, one poster purportedly did that with the MS-67 Pacquet reverse DE less than a year ago and now it's coming up for sale.  Did the prior seller misjudge the market and sell it cheap?

Maybe and we're about to find out.

"acceptable quality"....very broad term n not necessarily applicable to many collectors, US or foreign, its true that very few 20th cent US coins r truly rare (5 or less known)...but many if not most collectors strive toward completing their collections in designated grades n conditions, making many 20th cent US coins truly rare in those specific grades...if one's "acceptable quality" is broad enuf, yes maybe find one in a few months, if the goal is just complete ur collection...in some cases u wait until the current owner dies to be able to obtain the desired coin in the desired grade....

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The CURRENT Farran Zerbe Award winner gave a talk at the Red Rose Coin Club of Lancaster, PA (my previous home club and still his) in which he pointed out that at major auction houses, the seller’s fee is FULLY negotiable, while the buyer’s fee usually is not. He has seen collections handled at ZERO seller’s fee. 
 

Kerry Wetterstrom - a good and dear friend. 

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The article is typical bluster, and not based on data. The commercial part of coin collecting does itself a disservice by failing to collect and analyze its own financial results....that said, some companies make this an important part of doing business. With all hobby businesses effectively private, there is no resource of public data for collectors to examine. Thus, it is not possible for collectors to accurately review, analyze, interpret or act on trends until it is too late.

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On 8/2/2021 at 3:34 PM, VKurtB said:

The CURRENT Farran Zerbe Award winner gave a talk at the Red Rose Coin Club of Lancaster, PA (my previous home club and still his) in which he pointed out that at major auction houses, the seller’s fee is FULLY negotiable, while the buyer’s fee usually is not. He has seen collections handled at ZERO seller’s fee. 
 

Kerry Wetterstrom - a good and dear friend. 

absolutely true....i have had seller's fees be 0%,3%,5%,8% thru the various auction houses...in some cases if the coin was purchased from that auction house n later consigned back thru the same auction house the seller's fees r 0%.....

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On 8/2/2021 at 4:35 PM, RWB said:

With all hobby businesses effectively private, there is no resource of public data for collectors to examine. Thus, it is not possible for collectors to accurately review, analyze, interpret or act on trends until it is too late.

Well, you had Collector's Universe public for a while.  If the private equity owners decide to re-list via an IPO in a few years, we'll have some nice data points.

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On 8/2/2021 at 4:35 PM, RWB said:

The article is typical bluster, and not based on data. The commercial part of coin collecting does itself a disservice by failing to collect and analyze its own financial results....that said, some companies make this an important part of doing business. With all hobby businesses effectively private, there is no resource of public data for collectors to examine. Thus, it is not possible for collectors to accurately review, analyze, interpret or act on trends until it is too late.

incorrect use of the word bluster....but ironic n amusing considering the source.....

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On 8/2/2021 at 2:15 PM, zadok said:

"acceptable quality"....very broad term n not necessarily applicable to many collectors, US or foreign, its true that very few 20th cent US coins r truly rare (5 or less known)...but many if not most collectors strive toward completing their collections in designated grades n conditions, making many 20th cent US coins truly rare in those specific grades...if one's "acceptable quality" is broad enuf, yes maybe find one in a few months, if the goal is just complete ur collection...in some cases u wait until the current owner dies to be able to obtain the desired coin in the desired grade....

If a collector wants one with the highest number on a TPG label, with a very specific strike, with a very specific color or color pattern ("eye appeal", some die variety, or a combination, such a coin might be hard to find.  So are 99% of all coins ever struck outside of NCLT, modern proofs, and maybe circulating coinage from the last 10-20 years.

Most collectors don't find any difficulty in buying 20th century US coins in "acceptable quality".  Your description applies to a very low fraction of the collector base and the primary reason this behavior happens at all is that most of these coins are so common, they have the luxury to choose from a (relatively) large number: almost always dozens, hundreds, thousands or even more in "acceptable quality".

Intermittently, I look at numerous US key dates or coins viewed as (somewhat) scarce or even rare.  Invariably, I can find practically every one every time and it isn't "dreck" either.  On a recent search, this included the 1796 and 1797 half dollars.  Collectors Corner had six 1796 and three 1797 (including auctions) up to MS.  I have found one or both of these dates in "high quality", every single time I have looked.  It's not common but isn't a hard type to buy, even in "high" quality.

I intended to use "acceptable quality" broadly as it describes how most collectors  actually collect.  They aren't willing to pay, can't afford, or don't care about what are actually minor attributes, outside of the price.  Collectors have always preferred better coins, this kind of search was just a lot less important to them when the price level was a lot lower and price spreads were narrower.

The broader point I was trying to make is the one I made before.  I don't see much motive for a buyer to bypass public auction where the coin is readily available, though I was only using 20th century US as an example.  They might as well buy it from a dealer instead of another collector, unless they can split the savings with the seller or buy it a discount, at minimum.

Another alternative to auctions is consignment.  If I had the coins inferred in the prior posts meeting this narrow quality criteria and price range, I'd consign to a dealer like CRO.  It's much easier and less risky than hoping you can find another collector who wants what you have when you don't even know them.

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On 8/2/2021 at 4:50 PM, zadok said:

incorrect use of the word bluster....but ironic n amusing considering the source.....

Just possibly THE BEST POST of 2021. :applause:^^

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@VKurtB  In point of fact, it was your line, "Is Ratzie33's name on it?" referring to the 100 Most Influential folks in Numismatics, that was probably the best line ever used.

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On 8/2/2021 at 5:05 PM, Quintus Arrius said:

@VKurtB  In point of fact, it was your line, "Is Ratzie33's name on it?" referring to the 100 Most Influential folks in Numismatics, that was probably the best line ever used.

And yet I never got an answer. :insane:

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The commission structure might have been fair and par for the market 25 or 40 years ago, when all you had were auctions or individual dealer sales.

But with the Internet and online auctions (even the Duckor 1927-D Saint could be bid on at FUN or online), you would have thought commissions/buyer's premiums would have faded a bit, much like fixed NYSE commissions did after 1975 leading to the current zero commission trading we've seen since online took off about 1999.

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The last time I bought a coin "one on one" it cost me more than if I had bought it on the public platform it was listed but not much more. lol It was worth every cent and included a nice exchange of information and I expect an invaluable contact in the future. Well worth it and I wouldn't change a thing. A fabulous coin, one I could not have acquired at a better price in that condition anywhere elsewhere. :cloud9:

I'm watching a similar coin at one of the auction houses mentioned with an estimate of $800 - $1,000 and it received little to no write up (17 words beyond the typical catalog references) or attention paid to it and at that price I'm not saying that it should receive more fanfare, it shouldn't. Buying/selling one on one not only has the potential of avoiding fees but the bigger benefit, IMO, is an exchange of information and building a network.

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On 8/2/2021 at 7:36 PM, Fenntucky Mike said:

Buying/selling one on one not only has the potential of avoiding fees but the bigger benefit, IMO, is an exchange of information and building a network.

I'm at the point in my primary series where I am about to run out of coins from the TPG population data to buy.  There are five dates remaining (from a series broadly defined with 104 coins) in a quality I will accept (that is, not dreck) that I currently do not own.  However, I have not seen most of these coins and there are some real "head scratchers" out there where I have no idea how that grade was assigned.  There are also additional upgrades but that's less of a priority.

So yes, in an example like mine, it will be beneficial to attempt to acquire through private transaction because it's essentially the only option.  If I ever decide to attempt it, there is one dealer on the PCGS forum and the author/collector of the reference book I will approach as a starting point.

When I collected South Africa Union as my primary series, I also sold most of my better coins privately about 10 years ago.  However, that's because there is almost no market for these coins in the US, except at or near Krause list which is well below the value in South Africa.  It's one of the reasons I changed my focus, too much trouble to sell.

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On 8/2/2021 at 6:50 PM, GoldFinger1969 said:

The commission structure might have been fair and par for the market 25 or 40 years ago, when all you had were auctions or individual dealer sales.

But with the Internet and online auctions (even the Duckor 1927-D Saint could be bid on at FUN or online), you would have thought commissions/buyer's premiums would have faded a bit, much like fixed NYSE commissions did after 1975 leading to the current zero commission trading we've seen since online took off about 1999.

It's somewhat of a mystery other than they can get away with it.  Part of it might have to do with the shrinking number of firms. 

There are essentially two large firms (Heritage and Stacks Bowers) but Heritage is larger than all others combined.  The other firms are either niche or aren't serious competition for these two.

Several firms have disappeared since I resumed collecting in 1998.  Bowers and Merena and ANR are now part of Stacks.  Superior Galleries suddenly went out of business around 2006.  Goldberg was a more serious competitor but now seems to be almost invisible.  They are still around but don't see them as much of an alternative to the big two.

Same trend to some degree in world coins, though Heritage and Stacks Bowers are the two largest generalists.  Everyone else (US or elsewhere) I would describe as a specialist firm.

eBay was a more viable option at the lower price points in the past but I'd never sell using a true auction format now unless it was a relatively liquid coin.

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On 8/2/2021 at 7:57 PM, World Colonial said:

It's somewhat of a mystery other than they can get away with it.  Part of it might have to do with the shrinking number of firms. 

There are essentially two large firms (Heritage and Stacks Bowers) but Heritage is larger than all others combined.  The other firms are either niche or aren't serious competition for these two.

Several firms have disappeared since I resumed collecting in 1998.  Bowers and Merena and ANR are now part of Stacks.  Superior Galleries suddenly went out of business around 2006.  Goldberg was a more serious competitor but now seems to be almost invisible.  They are still around but don't see them as much of an alternative to the big two.

Same trend to some degree in world coins, though Heritage and Stacks Bowers are the two largest generalists.  Everyone else (US or elsewhere) I would describe as a specialist firm.

eBay was a more viable option at the lower price points in the past but I'd never sell using a true auction format now unless it was a relatively liquid coin.

CNG for the ancient and Renaissance niche. 

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