Timing in the Coin Market

Assuming you want to sell coins at auction, does it make a difference when you do? In my opinion, timing in the coin market is everything. Here are some tips about when to sell and when not to sell at auction. Traditionally, people have assumed that it made more sense to sell coins at auction during major conventions like FUN or ANA. In the past, this was definitely true. Today, with the emergence of the Internet and a new mentality that an auction could occur on Mars and the buyers would still be there, I do not feel this is necessarily true.

It is expensive for a firm like Heritage to conduct a sale at a major convention. In addition to the fees that they have to pay to the organization who conducts the show (ANA, FUN, CSNS, etc) it costs more to run a sale in a major urban area. A seller has to ask himself if it is worth more money to sell coins at a major show than a not-so-major one. If it costs 4 or 5% more to put coins in the ANA auction that a pre-ANA sale, is this worth it?

This last question is an interesting one to ask. I can see the validity of both a yes and a no answer. Some people will contend that an ANA or FUN show brings out more buyers than, say, a Long Beach or Central States show and it is worth paying the extra money. Others people feel that, as I mentioned above, the buyers are going to find the coins regardless of what show the auction is being held in conjunction with and paying the premium price is a waste of money. I tend to agree with the former theory rather than the latter.

From experience, I have learned a couple of tricks as far as selecting a time and place in which to sell coins at auction. If I had a collection of “sophisticated” or historic coins (like Colonials or early type), I would sell them at an east coast sale since that’s where many of the buyers for these coins live. Logic dictates that a collection of Charlotte or Dahlonega coins should be sold in a venue like Atlanta although this is not always the case. And, as I will discuss below, New York City is an exception to every rule because of its incredible size and wealth.

There is no question that in 2007 Manhattan is the undisputed center of the world as far as selling art. Incredible amounts of money are in or near New York and it’s nice to think that some of this will be flowing into the coin market. I think this is true from the standpoint of people who already like coins and there are certainly a lot of serious collectors in the New York/New Jersey/Connecticut tri-state area. But it’s a pipedream to think that the guys who just dropped $15 million at the Christie’s Contemporary Art auctions are going to wander into a New York coin auction and be factors there.

When you are deciding on when to sell your coins at auction, use a calendar and a little common sense. This year’s pre-FUN auctions didn’t do well because in order to properly view the lots and figure your bids, you had to fly down to Orlando on either December 31st or January 1st. Realistically, how many people (even coin dealers) don’t have better things to do on New Year’s Eve or New Year’s day than flying to Orlando and slogging through a bunch of coins?

Is the auction you are considering being held on the Jewish holidays? Even those of us who don’t attend services think it’s tacky to be spending the High Holy Days at a coin auction.

Certain times of the year are traditionally slow in the coin market. November and December are always slow months due to the fact that there are few major shows and traveling becomes difficult due to bad weather and holiday conflicts.

Certain venues are traditionally bad coin towns as well. I have a personal grudge against St. Louis as a coin town and despite the fact that I’ve probably gone to ten coin shows there in the past two decades, I have had continually bad numismatic experiences in the Gateway City. Therefore, I’m just not going to put coins in an auction that occur in St. Louis; even if Tony LaRussa personally comes to my office and solicits a consignment.

What about when there are numerous auctions stacked up against each other during short periods of time; like before and during the ANA when three or four competing firms all have sales? Which sale do you pick—the first one (when people will be fresh and have money to spend) or the last one (when they will be burned out and broke)? The answer is not as cut and dry as you might think.

Can You Determine a Market Trend From One Auction Result?

Can you determine a market trend from one auction result? A few mixed results from a recent coin auction caused a number of clients to call me and ask me this question. My answer(s) were that, in each case, I did not feel that changes in the market could be determined from these results. Let me be more specific. In the November 2006 Heritage sale there was an 1845-O quarter eagle in NGC AU53 offered as Lot 1937. If you’ve read any of my articles on New Orleans quarter eagles, you’ll know that I LOVE this date and almost always try to buy it. But this coin was an exception to the rule.

Although you couldn’t really see them in the Heritage online images, this 1845-O quarter eagle had some really detracting marks on the surfaces. They were the sort of marks that, eight out of ten times, NGC would have no-graded the coin in question for “damage.” Which was sort of a shame, as the coin, with the exception of the marks, was not bad looking. But I decided to pass on the coin as I though the marks made it too hard to sell.

The coin was reserved for somewhere in the $5,000 range which means that it could have been purchased for $5,750 including the 15% buyers charge. In my opinion, $5,750 for an AU53 1845-O quarter eagle is very reasonable. Except in this case.

After the sale, a client called me (one who owns a nice AU58 example of this date, by the way…) and asked me if the fact that this coin didn’t sale indicated a weakness in the market for 1845-O quarter eagles. I told him that I didn’t think so, given the fact that the coin in question was not very nice.

Another lot in the same sale provided another interesting test case. This was an 1879-O double eagle graded AU50 by NGC and it was Lot 2570.

If you follow New Orleans double eagle prices at all, you know that nearly any 1879-O that has been offered at auction in the past four or five years has sold for full Trends or, in many cases, considerably more. But the 1879-O in this sale sold for around 75-80% of Trends. Did this suggest, my client asked, that the market for this date was getting weak and could he finally buy one for a reasonable price?

I had viewed this coin in person and hated it. I thought it had zero eye appeal. It was not only overgraded, in my opinion, but it had some detracting spots as well. Apparently other bidders agreed with me as well as it brought at least $5,000 less than what a nice looking example would have.

Does this weak auction result mean that the market for 1879-O double eagles is tanking? Not in the least. Now, if this trend continues for the next two or three times that an 1879-O is offered, my opinion would change. Especially if any of the future coins that sell cheaply happen to be nice for the grade.

The bottom line is this: I do not think you can make any profound analysis about values decreasing (or increasing) for a specific issue based solely on a single transaction.

Rating the Numismatic Auction Companies

For better or worse, auctions have become a more integral part of the numismatic scene than at any time in recent memory. In 2006, hundreds of millions of dollars worth of coins traded at auction and a number of price records were set. How do I rate the auction companies and what are their strengths/weaknesses? I thought it would be interesting to share my opinions of the five major American numismatic auction firms. There are five categories that I feel are important to consider: catalogs (and the ability to accurately catalog coins), websites (ease of use, usefulness, technology, content and images), customer service (how well do these companies handle problems), prices realized (what types of coins bring the most money at each sale) and overall strengths and weaknesses. Each of these categories is then ranked as follows: excellent, very good, good and poor.

1. Heritage: In the past few years, Heritage has clearly become the industry leader. It is now common for Heritage to conduct a $20-30 million dollar sale which features a huge variety of coins ranging in value from a few hundred dollars to hundreds of thousands of dollars. Heritage has become dominant for two reasons: their use of technology is incredibly innovative and they are extremely aggressive when it comes to securing consignments.

Catalogs: Heritage produces a good catalog. Their use of graphics is exceptional and the design is far more professional than any other firm. Their photography is not as good as certain other firms but I would attribute this primarily due to the fact that they tend to have so many more coins for sale that they can not spend enough time on quality control. I regard their cataloging as good to very good. They write nice, accurate descriptions of coins but tend not to have enough time or manpower to do much in-depth, original research.

Website: No one has a numismatic website with more useful bells and whistles than Heritage. It is incredibly easy to bid online in their sales and their auction archives feature is wonderful. My one complaint about the Heritage website is that it is a bit cold and impersonal. But its overall ranking is excellent and no other numismatic auction firm even comes close.

Customer Service: Since Heritage sells more coins than anyone else, they make more mistakes. But I’ve found them to be excellent at dealing with these issues in a timely and fair fashion. I would advise the collector to find someone at Heritage they like and build a long-term relationship with that person. I personally recommend Sam Foose.

Prices Realized: Prices in a typical Heritage sale tend to be strong, especially due to the fact that they have dramatically more retail buyers participating than anyone else. The areas that Heritage does best in are 20th century issues and Registry Set quality coins. Their weakest areas tend to be the more sophisticated, esoteric areas that Stack’s/ANR excel in.

Strengths and Weaknesses: Heritage has the best website and the greatest number of bidders of any numismatic auction firm. They are extremely easy to do business with despite their size. My major complaint with Heritage as a consignor is that their sales are way too big and coins can get lost in 5,000+ lot sales. But they are clearly the leader in this segment of the market and this does not appear to be changing any time soon.

2. Stack’s Rarities: In the fall of 2005, Stack’s and American Numismatic Rarities merged. I am basing my ratings for this new firm primarily on ANR as I’ve had many positive experiences with this firm in the past unlike Stack’s who I have not.

Catalogs: ANR, hands down, had the best catalogs in the numismatic auction business. No one does a better job of cataloging coins that ANR, especially rare and esoteric items like tokens, medals and colonials. With the exception of colonials, I thought Stack’s cataloging was inconsistent, at best. Stack’s color photography was exceptional while ANR’s wasn’t as good. Assuming these firms can combine the best of each world, their new catalogs should remain the best in the industry.

Website: Stack’s website was very poor for many years but in the last two or three years it improved considerably. ANR’s was decent but could have stood to have been updated and given a technological makeover. The new combined website is good to very good but it still is long ways away from comparing to Heritage’s.

Customer Service: I always thought ANR had excellent customer service while Stack’s was poor. It will be interesting to see whether the new firm is friendly and “small townish” like ANR or rude and “New Yorkish” like Stack’s. My two “go to” people at ANR have always been John Pack and Cynthia LaCarbonera and I think very highly of both of them.

Prices Realized: ANR and Stack’s were both capable of realizing extremely strong prices for fresh, original collections. Their prices for the more mundane meat-n-potatoes items which constitute the bulk of most sales were never as strong as Heritage’s due to the fact that neither firm had an active online bidding presence.

Strengths and Weaknesses: It will be interesting to see how the combination of Stack’s and ANR works. There is a tremendous amount of talent present at the two firms although this talent tends to be more academic while Heritage’s is, in my opinion, more market-savvy. I would expect that the new Stack’s Rarities firm will never replace Heritage as the top dog in the numismatic auction world but it will continue to at least keep Heritage from getting too complacent.

3. Bowers and Merena: The last few years have been a roller coaster ride for Bowers and Merena. As recently as the early part of this decade, Bowers and Merena was one of the major forces in the coin auction business. A disastrous stretch during the middle part of the decade almost destroyed this firm’s reputation but the last year or two have seen considerable improvement.

Catalogs: The graphics and design of a B+M catalog are good but the overall quality of the cataloging and the images could stand improving. However, I have noted a marked change for the better in the past year. B+M still needs to hire photographers who can make coins not look like lumps of coal.

Website: The B+M website is attractively designed but it does not have many interesting features. Bidding online is easy and secure. I would rate their website as good but it could certainly stand to be improved.

Customer Service: I have had a few problems in the past with B+M but they have always been resolved to my satisfaction. The biggest problem that this firm has had in recent years is considerable turnover which makes it difficult to establish a relationship with a capable person. I would personally recommend dealing with Debbie McDonald as I have found her to be very competent and honest.

Prices Realized: In the past year or two, Bowers and Merena has begun to create a niche as a company who is able to get strong prices in the various 20th century series. Their ability to get collections which are strong in 18th and 19th century material is not yet as well developed.

Strengths and Weaknesses: After a rough few years, Bowers and Merena has established itself as a strong #3 in the coin auction business. But in order to become more competitive, they will have to show they are capable to doing something that distinguishes themselves from their competitors.

4. Goldbergs: As someone who runs a niche business himself, I admire the fact that Ira and Larry Goldberg have a clearly defined goal as a company. They do not want to be as big as Heritage and they want their sales to be small, manageable and held in their own backyard of Beverly Hills. They have created a well-run, solid company that consistently offers good coins.

Catalogs: I think the Goldberg catalogs are very nicely designed with excellent graphics. Their cataloging is weak and their images appear to be enhanced. I would not personally feel comfortable bidding on a coin in one of their sales based on the image in the catalog.

Website: The Goldbergs website is solid if unspectacular. It is sometimes hard to find a specific coin due to an unsophisticated search feature. I do not personally care for their online images although I think they look more realistic and accurate than the ones in their catalogs.

Customer Service: The level of customer service in this firm is very good and when problems arise it is easy to deal directly with one of the owners. I personally recommend dealing with Glenn Onishi who I have known for many years and who I think is extremely trustworthy.

Prices Realized: Like any coin auction firm, the Goldbergs can get great prices for fresh, original deals. They tend to have recycled dealer consignments in their auctions and these coins typically bring exactly what they are worth. My one complaint with their sales is that some coins are too aggressively reserved by consignors.

Strengths and Weaknesses: If you live on the West Coast, this firm is a good resource. I’m not certain that I would travel all the way from the East Coast just to attend a Goldberg sale but the fact that they are typically held in conjunction with the Long Beach shows makes them convenient for dealers. The best compliment I can give this firm is that if I were creating an auction company, it would have many of the same basic goals as the Goldbergs do.

5. Superior: This is another firm that appears to have seen better days. Back in the 1980’s and 1990’s, Superior sales were massive and featured extremely interesting coins. In the last few years, the volume and quality of their sales appears to have shrunken considerably although they still get the odd interesting fresh deal every now and then.

Catalogs: Superior’s catalogs are unimpressive from a visual standpoint. Their cataloging is underwhelming and their images are poor. To remain competitive in the marketplace, they will have to improve in these areas.

Website: Not to pick on Superior, but their website is by far the worst of the five firms discussed in this report. It is confusing, sloppy and difficult to navigate. This is another area that will require a comprehensive overhaul by the powers that be at Superior if they are going to remain relevant in this increasingly web-driven business.

Customer Service: I’ve found customer service at Superior to be well-intentioned but erratic. One person at Superior who is very competent and knowledgeable is Larry Abbott. I have also had good experiences with Paul Song.

Prices Realized: Prices at the last few Superior auctions have ranged from very strong to indifferent. These sales are generally not well-attended and have little retail participation.

Strengths and Weaknesses: The numismatic auction business is very competitive and Superior finds itself (currently) lagging. The future of this firm depends on whether or not they can retain their key personnel. I’d guess that if Superior’s next two or three sales are not successful then the signs are ominous for their future.

Misc. Reader Questions

was recently asked a few interesting questions by a reader and thought it might be interesting to answer them. In no order, here they are: Q: In auction catalog descriptions, are there certain giveaways that lead you to think the cataloger doesn’t like the coin?

A: A good auction cataloger is like a good journalist: impartial and able to state facts without imposing personal prejudices. That said, catalogers are only human and it is possible to “read between the lines” and figure out subtle hints that catalogers don’t like the coins they are describing. I’ve always thought a good clue was when the cataloger talks about every possible thing except the coin itself. In other words, he mentions the coin’s rarity, its history and its contextual significance but “forgets” to mention what the coin itself looks like. There are other little clues like describing a circulated coin as “bright” or referring to coloration as “unusual” or “smoky” or “hazy.” I’d also beware of instances when a readily visible mark isn’t mentioned. If a mark is mentioned, it generally isn’t that bad. If it is “overlooked” than it is often so bad that the cataloger can’t find a way to nicely mention it.

Q: Why are different gold coins different colors?

A: There are actually two different answers to this question: the classic, “old school” answer and the “today’s market” answer. In the classic sense, a gold coin is a certain color because of the alloy used in its production. As an example, early Charlotte and Dahlonega gold often used Appalachian gold which had a considerable amount of silver included in the alloy. As a result, these coins often display a green-gold color. San Francisco coins used gold from California which had a high copper content which gave the gold a reddish or rose-gold tint. Unfortunately, few circulated gold coins remain that have not been dipped or which have not been recolored. Today’s color gradations are often more a result of the chemical that was used in recoloring the surfaces. As an example, many gold coins are seen with an unnatural tangerine-orange hue which is the result of a certain type of chemical used to recolor the surfaces.

Q: Why are NGC gold coin populations so much higher than PCGS populations?

A: I think there are two answers. The first and more politically correct is that NGC simply grades more rare date gold coins than PCGS does. Many of the major submitters of these coins send the majority of their coins to NGC and, thus, more have been graded. This is especially true with Liberty Head issues. For 20th century gold coinage, PCGS has actually graded a fairly comparable number of coins and, in the case of certain generic issues, they have actually graded more than NGC. I notice a huge difference between populations on rare dates in AU58. I think the reason for this is the combination of the fact that NGC is looser with this grade than PCGS and PCGS has done a better job, especially of late, in cleaning up their population report.

Do you have any interesting questions? Please send me an email and, if possible, I will answer them at some point in the future.

Heritage August Signature Sale Preview

I recently returned from Dallas where I was viewing auction lots for Heritage’s August Signature Sale. Heritage never seems to run out of coins to sell and, as usual, their catalogs were massive. In fact, I am thinking of charging them for a chiropractic visit as a result of a throbbing shoulder courtesy of having to schlep the catalogs through DFW and Portland airports in my now-deformed briefcase. Now that I’m back home, I’ve had a chance to analyze the Heritage sales and thought I’d share my thoughts about the coins that are being sold.

For the most part, I was more impressed with the non-gold in the sale than the gold. One item that really caught my eye was Lot 5055, which is an amazing NGC MS67 1862 Indian Cent die cap. For the most part, I am not a really big fan of errors but this was the error to end all errors. A die cap is caused when a planchet gets stuck in the die and the planchet is repeatedly struck. As a result, this die cap shows amazing detail on the coin itself and a stunning fan-shaped pattern with no less than eight distinct tabs. If I am not mistaken, this piece was in an ANR sale around three years ago but, for whatever reason, it really caught my attention this time. I would not be surprised to see this spectacular piece break the $50,000 mark.

Another coin that was pretty remarkable was Lot 5264, a 1906-S half dollar graded MS69 (!) by NGC. This is the only business strike barber half dollar ever graded this high by either service and the coin was awfully nice. Did NGC get carried away a little with the grade? Probably. Does a finer business strike Barber half dollar exist? Possibly. But, man, was this a seriously lovely coin!

Enough of this non-gold chit chat. You are reading this blog to know my thoughts on the gold coins in the sale. My overall impression was that the quality was spotty. There were some great single coins here and there and a nifty collection of Liberty Head double eagles but I did not find this to be one of Heritage’s more impressive offerings of gold.

It was interesting to compare the coins in old holders (i.e., the ones that were “fresh”) versus the ones that were “maxed out.” An example of a lovely fresh coin was Lot 5417, a PCGS MS61 1796 No Stars quarter eagle. Unlike most of the examples of this celebrated date that have been offered in recent years, this piece wasn’t stripped of its original color and had a lot of luster below its attractive color. But just so you don’t think that I automatically go ga-ga over any coin in an old green label PCGS holder, the next lot, a PCGS AU58 1796 With Stars quarter eagle showed an old cleaning on its obverse and, even by today’s inflated standards, was not really high end for the grade.

I have to mention the NGC PR67 1879 Flowing Hair Stella because I can’t resist writing the following: it was one Helluva Stella. If I were in the market for a killer example of this type, I’d buy this coin. It was superb.

I was fairly underwhelmed by the rest of the early gold and much of the branch mint issues although a few treasures did poke their little plastic heads up from time to time. You have to begin to wonder, are there any original Charlotte and Dahlonega coins left? Have the coin doctors gotten to every last piece? It was interesting looking at the high grade Philadelphia coins, which had original surfaces and comparing them to their doctored branch mint counterparts. One coin I did love was Lot 5507, an 1856-C half eagle in PCGS MS63. It was easily the finest example of this rare date that I have ever seen.

And, believe it or not, there were some Proof gold coins in the sale with original hazy surfaces (!) I was beginning to wonder if any of these had survived the dipping trays and chemistry sets of America’s coin dealers… If you’d like to know what a piece of original Proof gold looks like, study Lots 5514 and 5516.

For me, the most interesting deal in the sale was the Wyoming Collection of Liberty Head double eagles. I had sold some of the coins in this set to the owner and was excited when I heard his collection was for sale.

The star attraction of the collection is the 1861 Paquet reverse double eagle (Lot 5623). While not really widely known outside of the gold collecting community, this is actually the second rarest regular issue American gold coin, trailing only the 1870-S Three Dollar. Only two examples are known and it will be very interesting to see what this piece will bring. I predict it will bring between $1.5 and $2 million.

The sale includes a full run of New Orleans double eagles including the very rare 1854-O and 1856-O. Both are graded AU50 by PCGS and it will be interesting to see if prices for these two coins continue the amazing upwards march that they have shown for the past five years.

I will be attending the Heritage sale on August 13th and August 14th and would be pleased to provide you with auction representation service. If you are interested, please contact me immediately.

July 2006 Coin Market Assessment

When’s the last time you a coin dealer told you the market was going to be slow for a while? Take a deep breath…July is going to be a slow month. I think a short-term slow-down in the market is actually much needed and will, in the long run, be good for everyone’s mental health.

Just think about it. For the last few years nearly every month the coin market has seen never-ending auctions, continual shows and intense flurries of activity. I, for one, am tired. I’m not asking for this paragraph to be accompanied by strings but I could use a break. And you know what? I’m going to take it easy for the next few weeks.

A number of factors are conspiring to make the upcoming four to six weeks a slow-down period. First of all, with the exception of the Baltimore show (July 13-16), there are no significant conventions. Secondly, there are (as amazing as it seems…) no major auctions until the middle of August. Thirdly, the slowdown in metals prices has brought some activity to a halt. And, finally, it’s the summer. People are taking vacations and enjoying the nice weather.

Now I know some dealers just never slow down and they will tell you that they’ll be as busy as ever in July. Don’t believe them because they won’t be. There are just not a lot of coins available now and even the seemingly-insatiable demand of early 2006 has slowed down.

Will this fallow period last long?

Nope. Be prepared for a very active August as the pre-ANA and ANA auctions come around and then the ANA convention takes place. I personally think this year’s ANA will be a true barn-burner and am bracing for one of the busiest shows of my professional career.

I’m told that between the auctions being conducted by Superior, ANR, Bowers and Merena and Heritage that there will be well over 10,000 lots with a value of over $50 million available for sale. Am I worried if the market can absorb them? Not really. This has now happened for the past three or four summers and every year, despite dire end-of-the-world prognostications from certain quarters, the market seems to be doing just fine, thank you.

What really worries me is how I’m going to physically handle viewing four auctions, attending God knows how many sessions, being at the coin show for four or five days for ten hours each day and, gasp, having to wear nice clothes for a week.

I’m planning on enjoying my new place of residence (Portland is phenomenally nice in the summer, FYI), working on a top-secret new book project and getting a tan so I look spiffy in those nice clothes that you’ll see me in Denver this August.

Importance of Expert Assistance During Auctions

A recent auction experience reminded me why it is so important to view coins in the proper condition(s) and why it is so important for collectors to have an expert look at auctions lots for them. At the 2006 FUN show I was walking by the table of a West Coast auction firm who happened to have a group of coins on display for future sales. Included in this group was an early gold coin that was a major rarity and which had an excellent pedigree. I excitedly called a client of mine who I knew would be interested and told him about the coin. I hurriedly viewed it without magnification and using harsh convention center lighting. It looked magnificent to me and I relayed this to my client.

At another show a few months later, I looked at the coin again. It still appeared to be nice.

Prior to the June Long Beach sale, I touched base with my client and reminded him about the impending sale of this coin. Was he still interested? Very. Was he willing to pay what I felt he would have to in order to own this great coin? He said he was.

I viewed the coin again but this time with a 5X glass and using my special coin light that I bring with me to auction viewing rooms. As I tilted the coin into the light and rotated it on its axis, something looked wrong. I checked the coin again and realized that it had, in fact, been subtly wiped many years ago. To the naked eye, the coin looked like a virtual Gem and I had wondered why it was only in an MS62 holder. And given its impeccable pedigree, it had to be a great coin. Right?

Well it was a great coin. But it wasn’t going to upgrade and it did have a subtle but definite problem that might well have made it difficult to sell down the road. And I shuddered thinking about what would have happened if my client bought it and had me crack it out in an attempt to upgrade it. The coin might have wound up in an MS63 or even an MS64 holder. Or, it might have no-graded and we would have had a five-figure problem.

What’s the moral of this story? There is no possible way that the problem that this coin had could have been determined without seeing it in person. And even seeing it in person, it was very hard to detect the wipe lines with a good glass, a good light and an expert’s eyes looking at it. Considering that this coin was worth well north of $100,000 it presented a unique set of circumstances that I feel could only have been properly handled by a very knowledgeable dealer.

Coin Consignment Questions

As a dealer there are few things I like more than getting coins on consignment. To my way of thinking, you’ve got to love receiving nice coins for inventory without having to write a check for them. In a market like this, where it is very hard for me to buy nice, fresh coins, I am enthusiastic about receiving consigned coins from gold collectors. But I have noticed that many potential consignors do not fully understand the process. Here are my answers to some consignment related questions. What consignment rate do most dealers charge?

The usual rate ranges from a low of 5% to a high of 10%. The rate depends, of course, on the size of the consignment, the relationship of the consignor to the dealer and what sort of coins are involved. If one of my very best clients was consigning a nice group of fresh $5,000-10,000+ coins, I would be likely to charge a lower rate than for someone I barely knew offering me a group of slightly better date Type Three double eagles. Consignment rates are generally lower when the money generated by sales is applied towards new purchases from the firm chosen to handle the consignment.

What should consignors expect from dealers?

The consignor should expect full paperwork from the dealer explaining the consignment rate and the expected length of the consignment process as well as payment and return terms. The consignor should also expect that the coins will be imaged and described in a fairly prompt period of time. The image(s) and description(s) should be of a similar quality to the dealer’s regular inventory.

What consignor requests are considered unrealistic by dealers?

Some consigned coins sell quickly and some take a long period of time to sell. Don’t expect the dealer to sell all of the coins in a week. Price your coins fairly. If the consignor paid too much for a coin from another dealer do not expect the dealer who is now trying to sell the coin to be a miracle worker. The dealer should not be expected to write unrealistic descriptions or to make an ugly coin look nice through the miracles of digital photography.

Are consignment sales better than putting coins in auctions?

This really depends on the coins and the firm(s) in question. Without blowing my own horn too loudly, I would say that in most situations my firm is a far better choice to sell certain coins than a major auction company. The main reason for this is personal service. At an auction, you’ll be one of 100+ consignors at any given time while at my firm, you may be one of only two or three consignors. I tend to know the coins I specialize in far better than an auction company and, in my opinion, can do a better job pricing and marketing them. But my ability to outperform an auction company is probably best exhibited in my ability to sell United States gold coinage. I do not think I would be a great choice to sell a collection of Peace Dollars. I think the same can be said for most specialist-dealers when they operating outside their realm(s) of expertise.

In most cases, consignment sales can be a true win-win situation for dealers and collectors. It is a scenario in which both parties are working for the same goal and one that, as long as everyone understands what is expected of each other, should turn out well.

Advantages of Using Auction Representation

If you bid sight unseen on coins at auction there is a better than average chance that you will buy an overgraded, low end item. I recently spoke with a collector who was new to the rare gold coin market. He purchased a few books from me and we chatted about various branch mint issues for around thirty minutes.

The next thing I knew, he called me and told me that he had entered bids on around fifty lots in a major firm’s auction. I didn’t know this person well enough to yell at him (plus he was way too nice a person for me to raise my voice at) but, after talking for a few minutes, I found out that he had literally looked through a Heritage catalog like it was the latest offering from a clothing retailer and ordered one of this and one of that; like it was pants, shirts and ties.

Here’s the problem with blindly bidding at a coin auction. Despite what you might think, it is IMPOSSIBLE to accurately grade or determine the appearance of any coin based solely on an image. To see the fine nuances of a coin, such as luster and the quality of the surfaces, you absolutely must see it in person and view it in three dimensions.

When I mentioned this to the collector, he stated that the descriptions in the catalog told him most of what he needed to know. I, in turn, mentioned that these descriptions are written by employees of the auction company and while interesting to read, they tend to dwell on the positives of a coin rather than the negatives.

It is a huge disadvantage to a bidder to not see a coin. He is bidding against experts such as myself who are not only more knowledgeable about gold coins than he is but have had a chance to see the coins in person, view them in good lighting and use a magnifying glass if necessary. With these advantages, there is just no way that a sight-unseen bidder stands a chance against me.

Unless there is something wrong with the coin. Here’s a good rule of thumb for coin auctions: the worst lots in the sale—the ones that dealers pass between themselves during pre-sale viewing and giggle about—are the ones that ALWAYS wind up selling to “smart” collectors who bid sight unseen.

The collector has a few options in his arsenal. He can hire an agent to view the coins for him. He can establish a relationship with the auction company and have lots sent to him for pre-inspection. Or if he’s really lucky, he can find someone he trusts at the auction company to look at the coins for him and give him judgments.

Auction companies have dome a masterful marketing job convincing the new collector that the auction experience is totally without pitfalls and the fact that there is an underbidder for every coin means that no purchase has more than 5 to 10% downside. Wrong! What if the other bidder(s) on a certain lots is also uninformed and the smart bidders (i.e., those who had actually seen the coin) dropped out at 30 or 40% lower?

Bidding at auction is a great way to add rare coins to your collection but just remember that if you are bidding based solely on images, flowery descriptions and price histories from other auctions you are setting yourself up for a potential disaster.