Through clever marketing by auction companies and prominent media coverage of all major auction sales, many sellers of rare coins have been “conditioned” to believe that auctions are the only venues available to sell their rare coins. Major auction companies do a great job of promoting their organizations and their auction sales; and the media has done a great job of covering auction events – before and after each sale. After all, the media has a real need to create news with which to inform and entertain their readers, and major auctions are much easier to cover than digging up interesting, newsworthy private transactions that often go unnoticed.
While major auction companies do a very good job promoting major collections and consignments, they aren’t the only effective means of selling your rare coins to realize fair market prices. Actually, after buyers’ fees and consignment fees are sliced off the top of the sales prices of coins sold at auction, consignors often end up with less money than they could get by establishing fair market values, often with the help of a competent dealer in the business, and selling them privately through the same dealer, for a much smaller commission.
Let’s face it, buyers at auction know they’ll have to pay the buyers’ fee, now typically 17.5% at the major auction houses, and they reduce their bids accordingly. Add this to the fee consignors also pay and it all adds up to a much reduced total dollar amount taken home by consignors. Of course it’s difficult to attract the attention auction companies are able to garner by promoting their sales, but does it really make that much difference if a seller ends up with more money by selling them into the market privately?
When you know what your coins are worth, by your own analysis, or with the help of a competent dealer or appraiser, you can retain more control over the outcome of the sales of your coins, rather than throwing them to the winds of chance in an auction. There’s often a reason many of the record-setting rarities have been sold privately, rather than through auctions. A few years ago, the finest 1913 Liberty nickel, one of just five that exist, failed to get any bids at all at a major auction and was reportedly sold several months later for $5,000,000 in a private sale.
During June, 2012, a 1907 Ultra High Relief $20 Saint Gaudens gold coin sold for $2,760,000 at a major auction, which was considered a bargain price, bringing much less than many people believed it would sell for. In fact, PCGS ran a contest to guess the price. And actually, the very same coin sold for $2,990,000 back in 2005.
But how do more common coins fare at auction? Obviously, they often sell for very strong prices. But, consignors are taking a chance between the time they place the consignment and when the auction takes place. The economy or market can change during that time. Witness the shock the country was in after the September 11th tragedy occurred, or during and after the financial meltdown of 2008. Sure, these events also affect the private coin market, but one has more control in the private market and can often act more quickly.
Auctions are also subject to who’s bidding on certain coins, or who’s not. Additionally consignors are often competing against each other. Some consigned coins are often competing against one, two or sometimes more like-kind coins listed right alongside their own. Additionally, keep in mind that dealers are the biggest buyers at auction. Sometimes they’re representing and bidding for clients, earning commissions as agents, but more often than not, dealers buy at auction for inventory.
So why not work with a dealer to sell your coins privately. Dealers who get around the country and are experienced in the market usually know who the best buyers are for the types of coins you’re selling. Sometimes these are collector/investors, and at other times they’re dealers who have customers who want to buy just the kinds of coins you have for sale, and consequently they’ll often pay favorable premiums to purchase those wanted coins.
Of course commissions are negotiable. 10% is often a fair price for a dealer to charge to sell coins by consignment. However, for very expensive coins, say coins selling for $25,000, $100,000 or $250,000, for example, many dealers are willing to work on much lower commissions. 5%, or even 2% or 3%, are within reason as fair commissions for selling major rare coins. But, on the other hand, for extremely common and inexpensive coins, or coins that take more than an average amount of work and expense to market and sell, a higher commission of 15% or even 20% could be considered fair. Remember there are insurance fees, travel expenses, possibly advertising expenses, etc. for a dealer to cover.
For upper-end coins, dealers are known to create brochures, DVDs, exhibits, etc. to creatively market the coins. Press releases can be distributed and articles written to make news about interesting rare coins, collections, hoards, etc. An expertly-researched and well-written information article about your rare coins and collection could be placed on CoinWeek.com, for example, to publicize the coins you have for sale, if they’re worthy of such an endeavor.
Consider the Redfield hoard of more than 400,000 uncirculated silver dollars that was marketed during the 1970s. The clever promotion and marketing of this huge group of better date and common issue coins actually stimulated the silver dollar market, and prices skyrocketed, rather than collapsed, as a result of clever marketing.
Shipwreck finds have similarly been given great coverage by the press, as have important collections sold privately. Some coins are even sold by a sealed bid process, and of course they don’t have to be sold if minimum prices are not met.
So if you have rare coins for sale you might consider discussing what you have for sale with a competent and connected coin dealer. There may be additional opportunities that you hadn’t thought of to realize strong market prices for your coins. For example, an experienced dealer can help you get your coins re-graded to your advantage, or point out the advantages you may find in having your coins examined and stickered by CAC.
The key is to establish fair market values for your coins before marketing them privately. However, be aware that this is often not as easy as looking coin values up in price guides or auction archives. There may be hidden opportunities to realize strong prices for your coins that a competent and trustworthy dealer can help you recognize and achieve. So check out your options with a seasoned pro! You could end up with much more money in your pocket than you originally expected for your coins.
For additional information, click here to read my article entitled, Seven Steps to Selling Your Rare Coins For the Most Money in the Private Market.
Mark Ferguson has been dealing in high-end rare coins and precious metals since 1969. He has graded coins professionally for PCGS and was the Market Analyst for Coin World’s Coin Values magazine between 2002 and 2009. He has written feature articles and regular columns for Coin World, Coin Values magazine, The Coin Dealer Newsletter, Numismatic News, The Numismatist, ANA Journal, Coin News – a British publication, and currently writes a weekly column for CoinWeek. He is a recognized authority in appraising rare coins and a recognized expert on the 1804 silver dollar, which is known as “The King of American Coins.” Mark can be reached at Mark Ferguson Rare Coins, LLC (www.MFRareCoins.com).