By Mark Ferguson – MFRareCoins.com
During the past several years coin auctions have been taking business away from coin shows and the rest of the trade. Auctions have become the preferred way to sell collections for many, and much of the time they have worked out well for these sellers. But while auctions are a very good way to sell many types of coins, especially very high end coins, they aren’t always the be all and end all way to market quality rare coins in order to receive the maximum return on your money.
A couple of instances come to mind in which the owners of some very famous coins got into “pickles” regarding auctions, but fortunately everything worked out fine in the end. One story occurred several years ago when one of the 1913 Liberty nickels was consigned to an auction and a minimum bid of $5,000,000 was required to buy it. No bids came in and after much promotion the auction sale of this coin turned out to be a non-event. The coin later sold privately in a transaction in which all parties came out pleased and the sought after price was attained.
Another incident involved an equally famous coin – one of the 15 known 1804 silver dollars. In fact, one of the principles who owned the 1913 nickel, referred to above and who has also owned an 1804 dollar, remarked to me that these two famous rarities often leapfrog one another in setting alternate price records. In other words, one sets a price record, then the other sets a higher record, and so forth over the years.
The 1804 dollar I am referring to came up for sale at an auction several years ago, and the owner of another 1804 dollar wanted to protect the high price he paid for his coin, so he placed a bid on the one which came up for sale later on. Well, no one else bid on the coin and this bidder became the “proud” owner of not one, but two 1804 dollars – by mistake! Fortunately, that “mistake” has appreciated handsomely in value for the buyer since that time.
While these may be fun stories for the rest of us to tell, they serve as learning experiences for the people involved and obviously involve serious sums of money in terms of the rare coin market and these buyers and sellers. Coin market history is peppered with many other similar examples of coin deals that have taken work and savvy to make happen – whether in auctions or in private transactions.
Major rare coin auctions obviously provide the coin market with a valuable service, but there are often private ways to creatively market collections – both of outstanding quality and rarity, or more average in scope. I know of one truly outstanding collection that was privately sold several years ago for a price reportedly between $6 and $7 million, and not even a whisper was heard about this transaction in the market. It was one of the highest-priced sales of a rare coin collection ever! The terms were that the original collector who built the collection wanted it sold intact.
Another masterful marketing plan was accomplished by the A-Mark company back in the 1970s when it marketed the Redfield Hoard of more than 400,000 Morgan and Peace silver dollars. Most of these coins were in Mint State and included multiple “S” Mint dollar issues as well as lesser amounts of Mint State “CC” issues and “P” Mint issues. The exact inventory list was never released to the public. One would normally expect this huge quantity of silver dollars to flood the market, causing prices to plummet, but exactly the opposite occurred – demand was created and prices rose higher…much higher for many of the issues.
Smaller collections, especially of outstanding quality can often be marketed privately to achieve similar results. If buyers know that such a collection will not be sold visibly in a major public auction they will often go to great lengths to “get in” on the deal, and will usually be willing to step up to the plate, so to speak, and pay strong prices if the coins are appealing. This can benefit both buyers and sellers who can save buyer and seller auction fees if an agent can creatively market a collection privately. Sometimes a printed brochure or website is helpful, or just getting the word out to the right people will do the trick. A good example is marketing a collection within a small collecting community like that of early copper coins.
Two important keys are needed to market collections privately for the highest prices. First a competent dealer/agent must know the market and be able to research and determine the highest prices the coins should sell for. Second, this agent needs to know what dealers and collectors to “pitch” the coins to, or “let in” on the deal. Ultimately, a savvy coin marketer can save a seller a 5, 10 or 20 percent auction consignment fee and save buyers the typical 15 percent auction buyers fee, which obviously also gets sliced right off the top of what a seller receives, because typically without such a buyers fee, the auction buyers would raise their bids and end up paying more money.
I don’t mean to say that selling privately to save these fees is the ultimate answer to receiving top dollar, because after all, there are many instances when very scarce high quality coins bring run away prices at auction – often more than reasonable expectations. But especially for coins that are more common and regularly found in public auctions, private sales may be a good way to go. The coins can be offered by dealer/agents at coin shows, on websites, dealer trading networks and private offerings to customers. Consignment terms can often be very reasonable, saving higher auction fees, and of course they’re negotiable.
There are times in slower coin markets when sellers have been reluctant to consign coins to auctions for fear they’ll rack up high fees and receive less than strong prices because of a soft coin market. While today’s coin market is focused on very high end coins and bullion related items, this may be one of those times to consider exactly how you want to sell your collection of nice, but less than the rarest of the rare kinds of coins in order to receive maximum return. But if it’s high visibility you want for your collection, it’s difficult to beat the promotion value of a major auction. You must weigh your options.
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).