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Digital Subscriptions > COINage > August 2019 > Tips and Tricks for Coin Convention Auctions

Tips and Tricks for Coin Convention Auctions

Major coin conventions generally feature an official auction of coins and related items. Auction companies compete to become the official auctioneer of a convention. Over the past few years, summer American Numismatic Association (ANA) World’s Fair of Money conventions have featured auctions by two different companies: Stack’s Bowers Galleries and Heritage Auctions. As so many items are auctioned at major conventions, and most coin buyers in attendance are focused on the bourse floor along with other events at the respective conventions, there are oft en opportunities for collectors to buy coins in such auctions for what in my opinion are sometimes weak to moderate prices. There can be good deals, for sure.

Of course, many auction sales are not good deals at all. In some cases, bidding goes crazy, or collectors pay beyond retail prices for coins that they feel that they “just have to have.” It is important to become aware that different bidders participate in coin auctions for different reasons.

The categories of bidders are not mutually exclusive. There are collectors, investors, wholesale dealers, retail dealers, and crack-out artists. Auction prices cannot be understood just by reading prices realized from the present and past. There is a need to refer to market levels, independent of the auction results, and to think about the likely reasons why particular coins were purchased at auction. Coin auctions are so large that hardly anyone can even think about all the coins in one auction. It takes time for a dealer, a cost-conscious collector, or an investor to research market levels and determine how much to bid for any one coin. For many coins, only dealers compete. A wholesaler will figure that he must buy a coin for a price such that he can sell it or “memo it” (send on approval) to a retail dealer to eventually sell to a collector.

Wholesalers of en buy coins at auction for inventory, and they pay prices that are two stages away from a final retail price. For example, a wholesaler may buy a coin for $5,000 and later sell it to a retail dealer for $5,500, who,in turn, sells it to a collector for $6,500.

MARKUPS WILL VARY DEPENDING UPON THE POPULARITY, RARITY, QUALITY, AND CURRENT DEMAND FOR EACH RESPECTIVE COIN. BUSINESS PRACTICES VARY AMONG DEALERS, TOO.

Markups will vary depending upon the popularity, rarity, quality, and current demand for each respective coin. Business practices vary among dealers, too. One retail dealer may have a much higher asking price for a coin than another retail dealer would for the very same coin in the same holder.

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CoinAge August 2019, Ultimate Secrets of Coin Auction, Gold Scam Protection, First Circulating Currency of the U.S, And More....