How the Internet Has Changed the Rare Coin Market

The year was 1995. I can remember my wife Mary telling me that it was really important to establish a presence on the Internet; that it would be the future of the coin business. No way, I thought, people are still going to want to read print ads and receive mailed price lists. The Internet was slow and bulky and you could basically die of old age waiting for each coin image to come up on screen. Sixteen years later, it seems that, as usual, she was right and I was wrong. The Internet has, along with third party grading, changed the coin market like nothing else in history. Why has the Internet been so good for the coin market and what are some of the changes that it has wrought?

The best thing about the Internet for all hobbies has been the dissemination of information. 10 to 15 years ago, if you wanted information about rare coins you had to dig for it. You could open a Redbook and get mintage figures and you could find information about die varieties in various specialized books. But like the man behind the curtain in the Wizard of Oz, in the past, information was strictly controlled. If you were lucky, you were invited into the secret circle and given some of the information you needed. If you didn't know the secret handshake, you were pretty much on your own.

The impact of the Internet can be felt in a numbers of distinct ways. One is the newest phenomenon of the Internet (better known as Internet 3.0): social networking. Back in the pre-web days if you wanted to meet and talk with other collectors, you had to join a local coin club or, if you were lucky and lived in a town with a good coin shop, you met at the bid board on Saturday and talked coins with other interested locals. Now, it is reasonably easy to connect with fellow collectors and share information, buy and sell coins, talk about which dealers are good or bad, etc. I would expect that Facebook will become a much more important platform for coin collectors in the coming year.

As I mentioned above, the Internet has given collectors access to information that was formerly difficult to acquire. Pricing information from auctions is easier to source than ever before. A decade ago, the only place that compiled annual auction data was Krause Publications' annual auction prices realized book(s). These were expensive, not always complete and only provided a one-year window into specific series of coins. Today, sites such as and enable collectors to see 10 or even 20 years of auction results for a specific coin in a specific grade. This is critical information for determining what to pay for a coin or what to price a coin at when you are ready to sell. I would expect that better, more sophisticated coin pricing sites will be introduced in the coming years as well.

As recently as ten years ago, many dealers did not have a website and many of the ones that did featured clunky, slow moving sites. Today, coin websites are considerably more sophisticated and offer much better quality images and descriptions than before. The fact that collectors now feel comfortable enough to buy coins sight-unseen is a result of better technology (hello cable modems!) and it has greatly broadened the size and scope of the market.

One of the biggest changes we have seen in the last decade as a result of the Internet is a restructuring of the auction market. One coin auction firm responded better to technological advances in the last ten years and as a result they have basically decimated their competition. Ten years ago, the vast majority of coins sold at auction were purchased by dealers who were sitting in the room. Today, most lots sell to Internet bidders. Its a little unnerving for a new collector to walk into a coin auction and see it basically empty (with the notable exceptions being the FUN and ANA sales which still attract good crowds or very important specialized collections) but to be told that the auction is in fact a rousing success and that there are hundreds of active bidders participating.

I would expect that we will see similar changes with coin shows in the next ten years. I'm not certain we will have an actual "virtual bourse" but with coin dealers and collectors getting older, travel becoming harder and more expensive, and the number of shows simply too great to be sustainable, I'd think we'll see very different types of shows than what we have now and that they will be far more Internet-based.

How has the rise of the Internet changed the way that I do business? I can think of numerous ways in which it has and there are a few that stand out in particular. I have always sought to purchase pretty, high end coins but now a major consideration for me is if the coin is "photogenic." I might pass on a very dark or somewhat splotchy piece because it won't image well on my website and will be hard to sell as a result. It is very important for me to get my new purchases listed online as soon as I can after I return from a show. Instead of spending the weekend following a show relaxing and decompressing from an intense two or three days of trading coins, I know spend the next few days writing descriptions and having my new coins imaged.

The Internet has improved my cash-flow as it has sped up the amount of time it takes to sell a coin. In the pre-Internet days, I would create price lists and mail them out or put my new coins in print ads. The process would take weeks. Now, I put new coins on my website and often they are sold within hours and shipped within a day to their new owner. By the same token, it's made my concept of what's "fresh" change. I can have a coin on my website for thirty days and if it hasn't sold, it's no longer fresh and I have to rethink the pricing and selling process(es). The Internet has sped up the business cycle in ways which can be great but which can be a little scary as well.

I can foresee some exciting changes to the coin market as a result of the Internet. I would expect that dealer websites will become more interactive in the near future and that there will be more video and customization. If 3-D imaging ever becomes a reality, the inclusion of such images on coin website would be fantastic. I would expect there to be more social networking, more specialized auction sites and, as I mentioned above, more and better access to pricing.

I'd love to hear your input about the Web and its impact on your collecting habits in the past decade.

Online Coin Sale Observations

In the last five years, my website has become a primary focus in my business. It has been interesting to observe which coins sell the most quickly and why, in my opinion, they do. I’d like to pass on some of the lessons I’ve learned as I believe it will help you make better decisions when it comes to your collection.ntage Adidas jackets and sporting event tickets. But when it comes to buying coins on Ebay, I think I’m pretty much done. 1. Photogenic coins sell. In this instance the term “photogenic” is interchangeable with the more numismatic term “eye appeal.” When I buy a coin which has really pretty color or which has great luster or which has a very sharp strike (or, better yet, a combination of all these attributes) I can be reasonably certain the coin will sell well. If a coin has a glaring negative attribute that is readily apparent in an image, it is likely to be a hard sell. As an example, an otherwise nice coin which has a large grease spot on Liberty’s cheek will be hard to sell, even if the coin is quite rare. When you are putting together a collection, buy coins that are pretty.

2. Coins in the right pricing “sweet spot” sell. For me, this pricing zone is in the $2,500 to $7,500 range. There are coin dealers who seem to be able to sell lots of $25,000+ coins. (I certainly sell my fair share of them). But once you get past $10,000 or so, the air gets pretty thin in most series and liquidity drops. That’s why I like interesting coins in the $2,500-7,500 range. They are generally quite liquid and I can turn over my inventory a lot more quickly when I’m selling coins in this price range then when I’m selling expensive coins. Let me add that I have no problem with buying expensive coins but that my resistance level increases based on the series. In other words, with early gold coins, there are virtually no decent pieces available in the $2,500-7,500 and I would expand this sweet spot to $10,000-20,000. But with Charlotte, Dahlonega and New Orleans issues, I feel that there is excellent value in the lower price range(s) and my focus shifts accordingly. I will certainly buy a $20,000 Charlotte or Dahlonega coin but it has to be pretty special to get me interested.

3. Interesting coins sell. People like coins which can be summarized in a few words or less. The 1838-C half eagle is popular because it’s a first year of issue and it’s the only Classic Head half eagle from the Charlotte mint. Even if you aren’t a specialist in Charlotte coinage, you are likely to quickly discern the appeal of this coin. In the same series, an 1844-C half eagle may not be an easy to sell. It is clearly a scarcer date than the 1838-C but its range of appeal is limited to collectors who specialize in Charlotte gold coinage; whereas the 1838-C might appeal to type collectors, date collectors and people who just like neat coins. There are other “neatness factors” that appeal to collectors: very low mintage figures, unusual designs, key date status, good pedigrees and large size are all positive attributes. If a coin which I am being offered for sale has one or more of these attributes, the chances are good that I will add it to my inventory. A collection that contains interesting coins is a collection that I would be very pleased to purchase from its owner.

4. Coins have to be properly priced. In this day and age, it is reasonably easy for a collector to determine how much the last four AU55 1840-0 quarter eagles have brought at auction. If I price a coin comparably to these four auction records (and it is a decent looking piece) the chances are good that it will sell. If I price my coin at 50% more than the last four records, it won’t sell. Now there are exceptions to this rule. Coins that do not trade regularly at auction (like the same 1840-O quarter eagle but in MS63) are much harder to price. And certain coins (like an 1880-O eagle in AU50 or better grades) are clearly undervalued and are worth more than most published pricing guides suggest.

5. Rare coins sell. This sounds obvious but it is a point that needs to be reiterated. Whenever I list a really rare coin for sale (like an 1861-D gold dollar, an 1847-O half eagle or an 1870-CC eagle) it sells quickly and receives multiple enquiries. People want to own rare coins, especially if they are attractive and fairly priced. If I had to chose between, say, an 1870-CC eagle in EF45 and an 1873-CC eagle in AU55 (an issue which is rarer than the 1870-CC in higher grade yet priced comparably) I would always choose the former. Unless you are putting together a date set, focus on the rare dates for each series.

So what doesn’t sell? Obviously, I don’t go out and try to purchase coins for my inventory that are going to sit around for months and stagnate. But there are patterns I see on my website and these are patterns which you should avoid when assembling your collection:

1. No matter how rare the coin, certain series are really hard to sell. An example of this would be Liberty Head San Francisco eagles. Even if I have a really attractive, fairly priced example of a very rare issue like an 1863-S this is a hard coin to sell unless I happen to be working with a specialist collector who needs this specific date. I try to avoid thin, highly specialized markets.

2. Even if they are cheap, I avoid ugly coins. On more than one occasion, I’ve bought a coin at auction because it’s been too cheap to resist. But it’s been cheap for a good reason: it has heavily abraded surfaces or it is obviously scrubbed or it is very poorly struck. You get what you pay for and if you are buying coins based solely on price, you are destined to have a collection full of duds.

3. Ubiquitous coins are hard to sell as well. If I listed a bunch of common and semi-common Liberty Head half eagles or had a long list of common Saint Gaudens double eagles, the chances are good that they wouldn’t sell, even if they were genuinely nice coins for the grade or if they were priced competitively. Buyers go on my website looking for rare gold coins. You are building a rare coin collection. Always keep the word “rare” in mind when you are considering adding a coin to your set.

Online Coin Images

More and more I find myself buying and selling gold coins based on the images on my website and on other websites. Is this a good thing? I am a very strong advocate of the adage that there is absolutely no way that you can accurately grade a coin based on an image. But in today’s Internet-driven numismatic market many collectors and dealers have to make important and potentially expensive decisions based on images.

The reason that I hesitate to make certain decisions based on images is that, frankly, most of them are not very good. The large coin companies, who often handle hundreds if not thousands of coins at a time, are not able to take the time on each coin image that is required for them to be accurate.

There are a few things that I like about coin images. For one, they make nice, original coins look better than the typical coins offered for sale. In the past few years, I have become very “image conscious” when I buy coins. If a coin is overly bright or has funky color, it will not image well and will be a hard coin to sell. If a coin is crusty with dark, natural color and nice surfaces it will image well and, hopefully, be easier to sell.

Coin imaging is still unable to accurately capture a coin’s luster—which is best sensed in three dimensions, with the coin being spun back and forth. That’s one major reason why I am always very hesitant to buy a high grade Uncirculated or Proof coin without seeing it in person. Lower grade coins are different. I feel fairly comfortable buying circulated coins (up to AU50 or so) based on images because on these pieces luster is not an essential characteristic in determining grade.

There are other things to keep in mind when looking at coin images. Many people forget that the typical plastic slab has lots of wear and tear and this often makes the surfaces of coins look scuffy and scratched when they aren’t. In my experience, gold coins in PCGS holders photograph better than those in NGC holders. While I can’t offer scientific explanations as to why this is, my guess is that since coins are jammed tightly into white holders, this makes them a much more difficult subject to image than PCGS coins which float more loosely in clear holders.

As you become more familiar with certain rare coin firms, you learn more about their imaging. All of DWN’s images are taken using natural light and no coins are enhanced with Photoshop or other imaging software. But I can think of at least one major retail firm that blatantly uses Photoshop to make their Proof gold coins seem virtually flawless and an auction company who so totally enhances their color images that the coins in person look absolutely nothing like they do in the catalog.

There is still no substitute for buying coins based on seeing them in person but coin images are clearly getting better all the time and are becoming a huge factor in retail and auction sales. It will be interesting to see how this develops over the next few years, as digital cameras get better and better and new technology emerges that will enable websites to contain three dimension reproductions of coins and other flat objects.

Changes in the Coin Auction Market

Has any segment of numismatics changed more in the past ten years than auctions? A hypothetical collector who pulled a ten-year Rip Van Winkle and suddenly rediscovered coin auctions would note a host of differences including the following: The Internet now plays a huge role in auctions. Ten years ago, the Internet was a non-entity when it came to coin auctions. In today’s auction world, a large percentage of the lots are sold online; often times to collectors who have never seen the coins in person and are relying solely on the images.

Many auctions now play out in nearly empty rooms. Ten years it was not uncommon to see a hundred people bidding live in an auction room. Today, many big buyers never set foot in a live auction.

The numbers and dollar values of coins sold at auction have grown astronomically. Ten years ago a $10 million auction was front-page-of-Coin World-news. Today, it’s nothing. In fact, for many of the big firms a $10 million dollar sale would be a disappointment. And the physical sizes of the sales themselves have grown immensely. For certain firms, a 5000+ lot auction is routine. Ten years ago, auctions were seldom more than 2500 lots. And let’s not even mention the size of the catalogs themselves. You could use many of today’s catalogs for weight training devices…

The catalogs have become better and more sophisticated. The average auction catalog in 2006 is much slicker and glossier than it was in 1996. Most of the descriptions have gotten better and the photography has, for the most part, improved. In 2006, most coin auction catalogs compare favorably to the catalogs produced by Sotheby’s and Christie’s for their major art sales.

The players in the coin auction business in 2006 are remarkably similar to who they were in 1996. But the power structure has changed radically. Heritage has gone from an also-ran to the dominant force in the business while Superior and Bowers & Merena have become far less significant. Stack’s has kept its business model fairly consistent and has lost business as a result. The new kid on the block, ANR, has basically become what Bowers & Merena was ten years ago.

The entire numismatic auction business has become more transparent and information-driven. Heritage posts the reserves for every coin it sells and has a prices realized archive with over 1 million lots included. It is only a matter of time before other firms become more transparent and it seems likely that someone will take the Heritage archive and enlarge it to include other firms’ lots. In 1996, coin auctions were about as un-transparent as you could imagine and it was not uncommon to see consignors bidding on their own coins at auctions in an effort to drive up prices.

While the entire coin market is a very different animal today than it was a decade ago, it seems that more of these changes are noticeable in the auction arena than anywhere else. It will be very interesting to see how different the landscape looks in 2016.