I’ve been asked a few times recently how I price the coins that appear for sale on my website. No, the answer does not involve dart boards, a small man behind a curtain or invoking the spirits of coin dealers past. I have a system that is partially observational/deductive and partially intuitive that allows me, I think, to price coins in a consistent, coherent fashion. Obviously, my cost basis is a factor in pricing. But I don’t just apply a standardized mark-up to every coin I purchase. And don’t giggle when you read that last remark because I know a number of dealers who simply apply a 15%, 20% or 25% mark-up (or more) to virtually any coin they purchase, whether it’s a 1911 quarter eagle in MS62 or a 1911 quarter eagle in PR68.
When I am pricing my new purchases from a coin show, I generally take a few factors into consideration. The first is current auction prices realized. In some cases, auction prices are really helpful. Let’s say I have a certain Charlotte half eagle in AU58. There have been four separate auction transactions this year and they have ranged in price from $4,250 to $4,750. If my coin is average quality for the grade, I’m probably going to price it at the lower part of this range. If it’s what I regard as a high end coin for the grade, I’m going to price it at the high end of the price range.
I also check to see what I’ve sold the last example(s) of a certain coin for. If it’s something like an 1855-O gold dollar in AU58 (a coin that I handle on regular basis) I’m going to use my last sale(s) as a guidepost. If it’s a really rare coin like an 1855-O half eagle in MS61 (a coin that I have handled only twice in the last decade) than I will have to take other considerations into account: have other 1855-O half eagles in MS61 been graded since I sold my last coin? How is the overall strength of the New Orleans half eagle market? How many collectors are actively looking for this coin at this point in time?
What about a coin that is rare enough that none have appeared at auction since, say 2005? Or a coin that only one or two auction appearances have occurred but at least one of them is considerably higher than the other? This is where my knowledge of the coin market and coin pricing comes into play.
Let’s say the coin in question is a PR65 gold dollar with an extremely low mintage. The coin is attractive for the grade and truly rare. I would use a few criteria in this instance. First, I’d look to see if there were auction records for other Proof gold dollars with comparable mintages and comparable survivors. Second, I’d try to figure what percentage over “basal value” this coin was worth (in this case, “basal value” means what is the most common date of the type worth in this grade). Thirdly, I use the “gut check” theory of pricing. I’d ask myself, “if this coin walked-up to my table at a major coin show and I was thinking of buying it purely ‘on spec’ what would I pay?”
The two published guides for coin prices that I use most often for pricing remain Coin World’s Trends and the CDN or “Greysheet.” However, due to the fact that they are not updated as much as they should be, these two guides are beginning to become less relevant to me and the PCGS on-line guide, which is updated on a much more regular basis (and by a pretty knowledgeable dealer named David Hall) is now more of a factor in influencing my pricing of certain coins.
The knowledge part of pricing comes into play as far as coins that are undervalued by published price guides. Let me give an example. If I were to price an 1838 eagle in EF45 at 75% of Trends (which is a pretty standard pricing percentage of this series by DWN) I would be offering it around $3,100. I’m guessing if I did this, I’d have twenty orders for the coin in a day. Why? Because the coin is worth over $10,000 and all the published pricing guides (except for PCGS’, I should note) fail to reflect an accurate value. As someone who knows the Liberty Head eagle series very well, I know that the 1838 is worth far in excess of published values and will price it accordingly.
There are a few other pricing questions that I get asked frequently. Here are a few of them:
1. How do I price PCGS coins vs. NGC coins? I am a pretty strong believer in the old “look at the coin and not the holder” argument. If an NGC EF45 Dahlonega half eagle is very choice and original and I agree with the grade, I’m going to price it at the same level as a nice, original PCGS example. If an NGC AU55 Dahlonega half eagle seems overgraded to me and I think it’s really an AU53, I am going to price it at a lower percentage relative to Trends than a coin that I think is solid for the grade. But the exact same statement is true with a PCGS coin. One instance where a so-so PCGS coin might get an unfair price advantage versus a nicer NGC coin is where the PCGS population for the coin is decidedly lower. As an example, let’s look at an 1844-O eagle in AU58. The PCGS population is six in this grade with three better while the NGC population is forty-nine with thirteen better. By virtue of its much lower population, I’d price a PCGS coin at a 10-20% premium by virtue of its significantly lower population.
2. How much of a premium do CAC coins get? In the generic market(s), this is a pretty easy question to answer. John Albanese typically posts his bids for CAC-stickered Morgans, Walkers, higher grade 20th century gold, etc. and they are at premium prices over non-stickered coins. In the rare date gold arena this is a harder question to answer. When I offer a Dahlonega quarter eagle in AU55 with a CAC sticker I don’t (yet) ask any premium for it. But if I have an early half eagle in MS63 or a Proof quarter eagle in 66CAM, I charge at least a 10% premium for a CAC coin. This is due to the fact that John himself is willing to pay premiums in these markets for coins that meet his standards.
3. How do I price OOG coins? I define an OOG coin as “original but overgraded.” An example would be a nice, dirty 1838-C half eagle in an EF45 holder that faces-up well but, in my opinion, is really just a nice VF coin. My typical solution to this problem is to offer a coin like this wholesale at fair market value and to offer the coins that I have that I agree with the grades to my retail clients.
Coin pricing remains difficult, especially in a market such as this but I believe that well-informed coin dealers (and collectors) can apply published information and their personal knowledge to establish reasonably accurate levels.