Daily Blog Greatest Hits

Coin Marketplaces

Originally published on March 7 2015 and January 25 2017

Speaking of current marketplace, I took a short break yesterday from the daily GFRC coin/image processing routine and studied eBay and a number of major dealer websites. Competitive benchmarking was paramount in the semiconductor foundry industry as one constantly needed to stay current with process technology and circuit design feature enhancements. The same is true for the numismatic marketplace as the TPGs and major dealers/auction houses alter their online strategies for attracting customers and generating sales. There were several observations from a combined collector and customer friendly dealer perspective. These are personal observations and I'm sure there will be those who will disagree.

eBay is used primarily for two purposes; moving problem coins or less attractive pieces at discount prices or secondly, a marketing tool for better quality coins at elevated prices. To be honest, I have stopped using eBay as a new purchases source as the exercise is frustrating as one has to look through so many problem coins to find the needle in the haystack. As tempting as eBay can be to new collectors, my advice is always caution...especially on raw coins. Avoid eBay (or be highly selective) if you are planning to build a quality collection and leave this market place to the cherry pickers and value collectors.

Large volume dealers and auction houses are cross marketing coins. As I search around, many of the same coins are seen listed on multiple websites at different prices. This environment is highly transactional in nature with coins treated as a commodity to be flipped against sales volume goals. Can high volume dealers truly differentiate the better from average coins and advise collectors? Specialty dealers remain online with limited inventories of better quality coins as these coins sell quickly if priced at reasonable levels.

The 2014-2015 timeframe may become a black eye for PCGS given the wide grading variance seen for Seated coins in their new holders with the reverse Dupont hologram. PCGS invests a substantial amount of monies into website development but the core service remains accurate grading. I have become acutely cautious when looking at PCGS coins in these new holders as too many problem coins have been certified. There is almost a sense of relief when viewing PCGS coins in older blue label holders. It is paramount that collectors learn to grade along with understanding the appearance of naturally toned silver. It is a skill that is applicable to all silver coins regardless of the country of manufacture.

As stated in earlier blogs, CAC approved coins should be considered when attempting to build a noteworthy collection. This statement is predicated on fact that John Albanese maintains consistently strict standards and employs the same graders/evaluators on a long term basis. CAC does not evaluate modern coins, world coins or colonials. This is a clear statement that graders do have a limited bandwidth and evaluating coins within their sphere of expertise is critical towards maintaining a consistent output.

Ok, I will step down from my soapbox. These comments were made as personal observations as a collector recently turned dealer. The collector blood still flows in my veins and I don't have corporate sale goals to meet. Rather, my purpose for building GFRC is to provide an alternate online platform for collectors of all capabilities and financial means. One customer just commented that I reminded him of an old time dealer that provides old time personal service.

Where have all the good coins gone? I spent time on Tuesday going through eBay to assess the condition of that marketplace. The conclusion? eBay is mostly a numismatic junkyard. Have you ever visited an automobile junkyard to retrieve a used auto part rather than buying new? Those of us over 50 years of age probably remember walking through a huge yard of stripped cars seeking a working electrical generator or water pump. I was reminded of this while touring eBay. The offerings are mostly problematic coupled with major dealers using the venue to market their quality coins at premium asking prices to cover eBay fees.

Yesterday's eBay tour once again reinforced the fact that top quality coins are in collector hands. Our numismatic hobby remains strong as quality coins are quickly absorbed at full retail prices when arriving to market. The overall market may appear weak as the amount of off quality and problematic coins are not finding homes with collectors and piling up in marketplaces like eBay. Collector education through online resources, like GFRC, are having an impact. Major auction houses prices realized may be dropping a bit against the guides but that is easily explained by looking at individual lot quality and TPG gradeflation.

Customer Feedback

I am quite humbled this morning by the community that continues to grow around the Daily Blog and GFRC business. Many emails and text messages arrived during the past 24 hours. One in particular is from the Ft. Lauderdale consignor that is well written and addresses several topics brought forth in the Blog.

I really like where you are going with the community registries and being able to pull up old coins for provenance purposes. Being able to trace back a coin through different owners is fascinating to me. Our lifespans are so short compared to them. I think about what those bust quarters might have seen! It's also an invaluable resource for looking at different toning patterns for the different series. Looking through top tier dealers' stock has been a very worthwhile exercise over the years.

I had to laugh a bit in regards to your eBay post. It definitely is a place where substandard coins go to purgatory. Intermediate to advanced collectors of the classic series are often (not always) educated about obvious problem coins. eBay reflects this with many coins that are continually relisted for years because of glaring issues without a corresponding discount. I think many sellers are waiting for that 'fish' to take a damaged coin off their hands for PCGS guide prices. That being said, the occasional diamond in the rough does crop up and can be worth bidding on, as long as you know what sellers to avoid. Still, much better off with coin shows and t reputable dealers to get quality material. There is no replacement for in-hand inspection.

Here are several responses to my eBay junkyard comments.

Agree with your blog this morning. eBay has loads of junk. Heritage prices have slipped I believe due to the grade inflation mentioned. The old adage, buy the coin and not the holder is still strong among savvy older collectors.

eBay has become the "great wasteland" for coins, temporarily replacing those awful infomercials hawking melt Morgans for 20 times what they're really worth. Some of the "details" coins sold on major auction sites find their way to eBay as "raw" coins from "Ye Olde New England Estate", ad nauseum. Unfortunately that's a huge problem when people find out their hundreds of dollars (if not thousands) is basically worthless and they've just been taken. Just like the "Romanian Box" scam of old - "Just put in a dollar bill, turn the crank and a 20 will appear. I'll sell you the box for $50 because I just want to share". What was it that P.T. Barnum said? "There's a... " . That's why your (and a few others') education on coins is of utmost importance.

Love the daily blog. eBay Junk Yard! Luv it!