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There are numerous ways to acquire coins for your collection. There are some sources that are more reliable and less risky than others. The following sources are recommended as being minimal risk places from which to purchase coins:
- Friends or relatives who have coins for sale.
- Professional coin dealers who operate a store, and/or have a mail order department.
- Numismatic shows and exhibitions.
- Purchase coins from numismatic auctions.
The simplest way to purchase coins is from people you know. Ask a friend or relative if they have any old coins they would like to sell. Sometimes, vast collections have been unearthed in this way. You will probably be able to get some of the coins needed for your collection from people you know. However, you will eventually need to turn to a professional coin dealer to help fill the spaces in your collection.
Purchasing coins from a professional coin dealer can be an interesting experience. There are a few points that should be examined before you plan to purchase coins from a dealer.
1. All coin dealers are in business to turn a profit and thereby earn a living. Do not expect the impossible! While a dealer will always try to satisfy their customer’s needs, they must always take into account their overhead, including salaries, taxes, store rent, etc. Understandably, a collector always wants to feel that they have gotten a bargain on a coin they have purchased. This is human nature, but a collector should try to be fair to the dealer. While most dealers try to offer some savings to their established clientele, do not get a reputation of demanding a discount on every coin you purchase. Profit margins vary greatly depending on the item. Common coins that have a tendency to appear in quantity are slow turnover items for the dealer. Dealers need a high profit margin on slow turnover items as they eat up the dealer’s cash flow. Dealers work on closer profit margins on fast turnover items, as they do not have the carrying cost of holding inventory long term. In some instances, a dealer is working on a profit margin of ten percent or less. This is especially true on current date mint sets where the demand is great, and the only source is the Mint itself. Sometimes, the dealer may offer a verbal discount on the price of a coin if they feel that you show an interest in it. If a dealer does not give you a verbal discount, it is not a good idea to simply demand a discount from the dealer, as there are a small number of dealers who may get offended. A collector can certainly hint at the idea by asking the dealer if there are any “savings” on certain purchases. “Savings” tends to be a more diplomatic word to a dealer than “discount.” A collector’s best approach to negotiating with the dealer is bulk or volume purchases. Dealers like bulk purchasers. Another suggestion is to offer to pay in cash. This way, the dealer does not have to factor in the costs of bank and credit card service charges, which eat in to his profit margins. If you find that a dealer always sells coins at unusually steep discounts, you should be suspicious. This may suggest that the coins you are receiving are over graded or “problem” items.
2. When visiting a coin shop for the first time, ask yourself whether or not the shop itself inspires an impression of professionalism. Some coin shops certainly have a more professional atmosphere than other ones. Consider the way the merchandise is organized and displayed. With the exception of coins being sold as scrap bullion or bulk lot specials, the coins should be individually packaged and priced. If the coins are in different styles of holders with many different persons’ handwriting on them, it could mean that the dealer has simply purchased bulk groups from many other suppliers without taking the time to repackage the coins and recheck the grades. All professional coin dealers should be verifying the grade of each coin they sell, not to assume that their supplier has graded the item correctly. The dealer should also be an individual with extensive knowledge of the coins he sells. This may not necessarily translate to the employees of the dealer, who may or may not have extensive knowledge of numismatics. Not all dealers love coins in the same sense that a collector would as his business is buying and selling coins, not collecting them. Nonetheless, a dealer should handle coins with care and treat them in a way as if he were collecting them himself. If you see the dealer being unnecessarily rough with his coins or handling them improperly, it probably means that the dealer doesn’t care about his coins, and probably cares even less for the collectors that purchase them. Always buy coins from a dealer that inspires you with confidence and a high degree of professionalism. Some dealers have larger stocks than others do. Try to visit dealers that specialize in the field of coins you collect. A dealer that carries primarily mint products and modern Canadian coins may not be able to help fill your requirements for ancient Greek or Roman coins. It sometimes pays to shop around. While one dealer might find a particular coin easy to sell, another dealer may have trouble selling it and will offer it to you for somewhat less money.
3. Coin dealers are a wealth of information, as they deal in the industry every day. While most dealers will be more than happy to help you start your collection, there is a “right” and a “wrong” way of approaching it. If you are going to be asking the dealer questions that may take time to answer completely, try to ask at a time when the dealer is not busy answering the telephone or serving other retail customers. The dealer will appreciate it. Some dealers tend to be more helpful if you are making inquiries at the time of a purchase. If you are asking the dealer about coin grading, it is probably best not to question the grade the dealer has marked on the holder, even if you feel the dealer has over graded it. Some dealers may get offended. Another faux pas is to interfere with a transaction while a dealer is purchasing coins from the general public. Never question the prices a dealer pays for coins, unless they are your own. Also, resist the temptation to make the coin seller a higher offer on their coins while in the dealers’ shop. Never hesitate to ask your dealer for advice or information. As long as you are brief and courteous, you will probably find that the dealer is more than happy to help.
4. When asking dealers about the investment potential of a particular item, do not be surprised if the dealer is reluctant to share his opinion. This does not mean that the dealer is deliberately withholding information from you. Many dealers do this for their own protection. Dealers are not investment counselors . Dealers buy and sell coins in the present tense and are not usually thinking about what may happen next month, next year, and so on. Let’s suppose a collector asks a dealer what he feels the investment possibilities on a given year’s mint set could be. The dealer responds by saying that he believes that years’ mint sets will increase in value by 20 percent by next year. The collector, who feels he has been given special information, invests $5000.00 into the sets. Next year, the collector comes into the dealer’s store in a fuss over the fact that the sets fell somewhat short of the dealer’s prediction the year before. The dealer is now in a position where he loses his customer, and his reputation has been tarnished. This situation is a worst case scenario, but these events happen quite often. Once you have gained knowledge and experience in the field, you will be able to make good investment judgment calls by yourself.
5. Ask other coin club members or fellow collectors about their past business experiences with the dealer with whom you wish to conduct business. Consult as many individuals as possible, as you will probably get different opinions from different people. Dealers are only human, and isolated mistakes made in the past should not tarnish their present reputation. However, if you have consulted many people and the majority of people have had problems with a particular dealer or firm, then it may be wise to stay clear of them altogether.
6. When visiting a dealer’s shop or looking at a mail order advertisement, be sure to look for any professional affiliations they may have. Most dealers will have these posted clearly in their store or in their advertisements. If you don’t see any mention of affiliations, it may not hurt to ask the dealer.
7. Use your judgment! If it sounds too good to be true, it usually is. First impressions are usually correct in numismatics. Would you be suspicious if a coin dealer offered you an uncirculated 1948 silver dollar with a book value of $1100.00 for $950.00? Most collectors would not be. A dealer in normal business practice could probably still cover his expenses by retailing that coin at that price. However, if a dealer were selling a 1948 silver dollar in uncirculated condition for $300.00, it would certainly raise suspicions as to the grade or authenticity of the coin. He could pick up the telephone and offer that coin to another dealer for double that price and sell the coin immediately, without having to pay expenses of advertising or operating a storefront. This is especially true when buying coins from mail order companies who are not professional coin dealers. Dealers do make mistakes from time to time when pricing coins, but it always pays to be cautious.
8. Coin shows and exhibitions are another excellent source for acquiring coins. Coin shows vary considerably in size. Some shows may only have 5 dealers in attendance; others may have several hundred dealers participating. Ask at your coin club on the whereabouts of upcoming shows in your area.
9. The final recommended source for acquiring coins is from a numismatic auction. While numismatic auctions are a preferred method of buying for many collectors, one does have to be very careful reading the auction houses’ terms of sale. All auction houses have different regulations governing their sales. It is of utmost importance to fully understand the terms of sale. All auction houses have lot viewing at a designated time and place before the sale. It is strongly advised that you view each lot before you consider submitting a bid. Auction houses never allow return privileges on any lot if you are bidding on the auction floor in person (or via an agent bidding on your behalf). Most auction houses do allow a return privilege if your bid is submitted by fax or by mail. The auction house assumes that persons bidding in this manner are doing so because they are unable to attend the sale in person, and therefore did not have the opportunity to view the lots before the sale. If you are bidding on the floor, the auction house assumes that you have taken advantage of the opportunity to view the lots before the sale. When bidding in person, be discreet with your bidding. Part of the skill in auction bidding is to attract as little attention as possible. Regardless of whether you are successful in your bid, do not show any emotion at the outcome of the sale. Some overzealous bidders leave their bid cards in the air so long that the auctioneer confuses their actions as a second bid! It is very easy to get carried away at auctions. Always stay within your bidding limits that you have set for yourself. Auctions are a great way to buy coins, but as with all other sources, it pays to be cautious.
Considerable caution must be taken when buying coins from the following sources:
- Antique and Flea Markets
- Garage Sales
- Non-numismatic auctions
- Privately arranged transactions with parties whom you don’t know
- Classified advertisements in non-numismatic publications such as Kijiji, Craigslist, the newspaper etc.
- Coins solicited by telephone from a non-numismatic company
This certainly does not mean that all individuals selling coins through these sources are dishonest and unscrupulous. In fact, the vast majority of transactions done from these sources are done so in a professional, businesslike manner. However, there seems to be a higher element of risk acquiring coins from these sources than those listed above as “recommended sources.” There is the potential that the seller, through misunderstandings or lack of expertise in numismatics, may inadvertently sell their coins at higher than normal prices. Of course, the exact opposite is also true. Collectors who are familiar with coin grading and pricing may find a fantastic bargain because the seller may not realize the value of a coin that they have in their possession. Nevertheless, a collector should do research and have ample knowledge of the workings of the coin market before attempting to acquire coins from these six aforementioned sources.