Strong Early Sales Suggest Modern Liberty Has Appeal
The pace of initial sales of the 2015 American Liberty high relief gold coin, which reached 36,686 on the first day, surprised most people. According to the Mint, in the first ten minutes on July 30, 5,231 orders were placed, which works out to 8.72 orders per second. In the first 75 minutes, the Mint received more than 30,000 orders.
The big question, one that is currently the subject of much discussion, is how those sales broke down between individual collectors and dealers/coin companies. Given the rapid pace of sales and the price tag of $1,490 per coin, it seems likely that dealers purchased a significant portion on those coins.
In the numismatic blogosphere, some collectors were tracking order numbers of their fellow collectors and calculated that there were approximately 12,500 orders before the coin went on backorder. They further estimated that if most individual buyers were purchasing one coin in most cases, that means dealers bought at least 20,000 pieces.
That may well be about right, but it is a little too early to automatically assume that this means there will soon be a glut of coins on the market that will pull prices below issue price, as happened with the 2014 Kennedy gold half dollar.
It really depends on a couple factors, including whether the coin sells out completely in the next week or so and how soon the backorders are filled. The Mint’s web site has since its relaunch been overly conservative in the shipping estimates it provides buyers when an item is unavailable but can be ordered for later delivery.
A good example is the Jacqueline Kennedy proof coin that immediately went into backorder status with an estimated shipping date months away, only to begin shipping days later with most orders filled not long after that.
As usual, it appears that the big players’ strategy is to have their early purchases graded to capitalize on the demand for first strike/early release MS70 coins, then once the coin is no longer available and premiums rise, they will sell remaining inventory over time.
I read and heard complaints from some buyers that dealers were locking them out of buying a coin by purchasing all those coins during the first couple hours when some people were not able to order because they were at work or otherwise busy.
But there were few reports of buyers who said they had trouble placing an order, and by now experienced buyers understand that there is almost always intense competition for high-demand coins when they are first released, which means they should order right away if they want to make sure they secure their coins.
In addition, I would note that the tagging of the coin as “unavailable” after 4:00pm EST on release day, which switched to “backordered” about four hours later, may have resulted in a lost sales momentum during a critical period because for some buyers it suggested the coin was sold out.
Since the Mint tracks how many orders are coming in and knows when the maximum mintage is reached, it would be preferable to immediately tag items not in stock as backordered, as was the case with the previous order management system, so as not to lose orders during the interim period before the backorder notice goes up.
However this coin ends up performing in the marketplace, the strong start of sales of the coin is in my view a health sign for the modern coin segment of the hobby because it suggests that there is demand for modern representations of Liberty.
And as former CCAC chairman Gary Marks, who spearheaded this initiative, told me, if the Mint produces a deep cameo proof silver medal version, it will be “a blockbuster.”