Today’s blog is for the advanced collector-investor who is interested in selling a high quality investment-grade coin collection. Building a portfolio of this caliber can take years and may be worth tens if not hundreds of thousands of dollars. Selling it deserves equal care and attention.
At Tri-State Rare Coins we know you have options for selling your high-grade collectible coins. One of these options is to consign your coins to a public auction. Chances are you may already know of the top two or three nationally recognized numismatic auctioneers. They will try to impress you with their hundreds of thousands of registered users, their extensive sales archives, their state-of-the-art information technologies, and their aggressive print marketing including award-winning auction catalogs. These great features and more come at a price paid by you the seller.
In this article we will show you the true cost of consigning your coins to an auction company.
Collectors and coin dealers (like us) attend coin auctions in search of bargains and coins trading below market value. Due to the sheer quantity of coins being offered, some coins get overlooked. A savvy (or just plain lucky) buyer may successfully bid on a coin with little competition and win it below full market value. The seller of this coin is the unfortunate loser in this transaction. The auction company won’t make as much but still receives its fees nonetheless.
You could try to guard against receiving too little by establishing a reserve or minimum price below which your coin cannot be sold. However, there are risks to this practice. Auction companies discourage sellers from placing a reserve by charging a buy-back fee when your coin does not sell. The buy-back can be nearly as much as you would expect to pay when the coin is sold. Depending on the size of the fee, a failed auction lot could easily turn an investment gain into a disappointing loss. Therefore, the decision to consign your rare coins to an auction should not be taken lightly and certainly not before thoroughly examining other options.
The sales archive from America’s leading numismatic auctioneer offers a telling portrayal of the coin auction market.
75 percent of coins sold were valued under $1,000
3 percent of coins sold were valued over $10,000
19 percent of 1.9 million coins in the archive did not sell
True rarities, valued in excess of $25,000, are highly sought after. They generally return prices above market value and make the best candidates for auction, but represent a tiny portion of the overall coin market. The vast majority (97 percent) of coins sold at auction are under $10,000. Such coins tend to under-perform at auction which means less money in your pocket.
Selling through an auction house requires significant pre-planning and patience. Coins must be submitted 30 to 45 days in advance of the auction date and payment is made 45 days afterwards. From start to finish you are looking at a 90-day waiting period and you typically receive about 80 percent of what the buyer pays. For its part, an auction house charges 5 percent from the seller and 20 percent from the buyer. In actuality you, as the seller, bear both of these costs and here’s why.
Let’s say you have a coin consigned to auction that buyers think is worth $12,000. Because auction participants know they will have to pay 20% on top of their bid they simply deduct it from what they want to pay. A maximum bid of $10,000 assures a potential buyer of paying no more than $12,000.
As seller, you should expect to pay a $500 fee – 5 percent of the winning bid – and receive a check for $9500. In total, the auctioneer receives $2500 in commission fees. So at auction, you can expect to make, at best, about 80% of your coin’s full value and often times less.
Because Tri-State Rare Coins does not have the overhead expenses of a large auction house, we can afford to work on a smaller profit percentage. As a result, when we purchase your coins you stand to receive more, and often substantially more, than you would by consigning your rare coins at auction. Furthermore, when you decide to sell us your coins, we pay you on the spot; no 90-day waiting period.
Internet auctions like Ebay are another outlet for selling coins. They are convenient for do-it-yourself types to sell all sorts of house-hold items. These venues are fraught with a different set of risks and challenges that we will discuss in a future blog.
So, if you are thinking of selling your high quality rare coins, you owe it to yourself to check us out. We are experiencing a growing demand for investment-grade rare coins. And due to a ready market for your coins we are a highly motivated buyer. Our financial resources are sufficient to purchase collections of significant value and we have the business stability of 34 years at the same location. Since 1981, sellers have trusted us to give them a fair price for their rare coins and paper money. You can too.
Tri-State Rare Coins is conveniently located approximately one half-mile east of Route 287 Exit 13 on Route 28 in Bound Brook, New Jersey. Visit us today for a no-obligation free written appraisal. You can find more info and FAQs on our website.
The Busiest Coin Shop in New Jersey is the Better Alternative.
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