?Every coin buyer wants to find value. It is human nature to seek the best deal and the question of “what’s it worth?” is a natural, common phrase when collectors gather together.
Broadly, there are at least three ways that collectors can take advantage of situations and circumstances to secure good deals.
Seller lacks specialized knowledge
One way to snag value is to be armed with information.
The hobby is too vast for everyone to know everything, so specialization offers opportunities for deal-making in certain circumstances.
On a small scale, this happened when I bought a dairy token that was from a town in the next county south of here. The seller, in that same county, had no idea that this “maverick” token was original to his own city, because by their nature, maverick tokens lack identifying details of the place of issue.
Though the town was not identified on the token, the token is listed in Ohio Merchant Tokens by Gaylor Lipscomb, where I had recalled reading about it. It was a fortunate stroke of luck, to have read about it, and to have recalled it.
That meant my $1 purchase — that I attributed — was worth five to 10 times the purchase price.
That is a macro level, but the same principle applies in other areas of the hobby. A Seated Liberty specialist pointed out to me multiple instances where generalist dealers, auction houses and grading services either failed to attribute varieties or attributed them incorrectly, allowing him to purchase them for prices that were discounted over their true value to the specialist.
Another Ohio dealer purchased world silver bullion coins from retail customers and then sold them as generic 1-ounce rounds, which carry tighter premium spreads above precious metal value than most bullion coins. In this case, the 2015 silver 1-ounce $5 coins from Tokelau showing the Great White Shark were considered generic, when a major bullion dealer was selling them for $2 each more than generic rounds.
When it comes to bullion, with silver treading water at $14 an ounce, that reflects a hefty difference.
Liquidity or profit taking issues
Some dealers might have issues of liquidity or be undercapitalized, which can lead to the bargain buy for the right customer.
A generalist Ohio dealer who buys a lot of silver destined for the melting pot had a cache of world coins, most of which were available at prices based on the “spot” silver price.
But in the pile he offered at “melt” were several nice world crown coins that, because of their design, size or mintage, carry medium to strong premiums over the precious metal value.
With thousands of dollars tied up in the bin bound for melting, he just wanted to move what he could for his marginal percentage, and have funds with which to make more purchases.
In a similar sense, profit taking can lead to bargains.
If a dealer bought world coins at silver-based prices when silver was $10 an ounce, and never changed the prices on the holders as the value of the metal moved up, then those coins would each reflect a profit.
It’s happened to me on several occasions, even with a generic half-ounce silver piece that sold for half of its true value.
By turning over those purchases right away, there was profit to be made.
Lack of exposure means bargains
Simply put, not every pair of eyes can see every potential transaction. There is no equivalent to the National Security Agency or Santa Claus monitoring every piece at every sales venue.
The world is ever smaller than it ever was, thanks to the Internet and auction sites like eBay, which have dramatically altered the antiques and collectibles markets. Used books might be the perfect example — suddenly booksellers across the country could inventory and sell their stock to anyone in the world.
True rarity became apparent, suppressing the high prices for items of false rarity.
At the same time, there are hundreds of dealers hosting their own auctions, and thousands of daily auctions at sites like eBay. A fool would think they could access all those options and act with timeliness to secure bargains.
Sometimes sellers incorrectly identify the item that they have listed in an eBay auction.
Coin World reports about new discoveries frequently follow that template, where an item is misattributed, meaning searchers casting a tighter net based on key words might skip over the listing, suppressing bids and ultimately its sale price.
A St. Louis anniversary medal described as pewter by a seller on eBay actually was silver, but because of its toning, it sold for a song.
A group of five Eisenhower medals, each struck in silver, were purchased at a show for $5 per medal because the dealer thought they were copper-nickel. The Medallic Art Co. name and serial number on the edge, as well as the capsule style, were indicators that the pieces were silver, which was confirmed with additional research away from the show.
These are just some of the ways that buyers can obtain value.
In the next installment, we’ll explore the other side of the coin, literally, when buying coins or numismatic items turns out to be far too costly.