Approaching GFRC to Sell a Collection: Do's and Dont's

Originally published on August 10 2017

For individuals who know me well, they understand that I'm a to the point person. Time in the semiconductor industry was extremely valuable due to managing multiple projects, a company P&L and dealing with a broad range of international customers. I expected meetings to be focused and to the point. Presentation slides were expected to illustrate a clear message within 10 seconds of reading.

In the past several weeks, I've been approached by three individuals who wish to sell their Liberty Seated coinage collections. These individuals are long time collectors and are not interested with consignment process, rather they wish for a quick outright sale and securing cash. Two of the collections are valued in the $15,000 range based on collector purchase prices. Another is probably valued in the $40,000+ range. Unfortunately, there is a prevalent belief that collections can be sold to a dealer at current price guide retail or prior purchase prices even though many were acquired in the last five years.

As much as I would like to help individuals dispose of their collections and continue sourcing quality inventory for GFRC customers, there is a basic reality that GFRC is not a non profit organization. The LSCC is a non profit organization with incredibly dedicated volunteers. However, GFRC is a for profit LLC with ongoing business costs to cover prior to realizing a profit for the expended time and resources. This should be apparent but is explicitly stated today.

Since being contacted by these collectors with similar mindsets and negotiation styles, I thought that a segment in the Blog might be appropriate to cover this topic and save everyone some unnecessary discussions. My time is incredibly precious and play/pass decisions will be quickly made on potential numismatic purchase offers. So here are basic guidelines to consider if you wish to contact me concerning the sale of a collection.

Do's

Respect the fact that, as full time dealer, I an entitled to make a profit for relieving collectors of their financial responsibility for numismatic purchases.

Carefully analyze the current market and options for divestment. Study CoinFacts and auction results for the current market. Divestment options will have associated fees or costs. Here are several to consider:

• Major Auction House: an option for a large collection with average price per coin at or above $1000. Fees and lost of control of your coins are issues.


• Consignment: There are several firms, GFRC included, that will handle coins on consignment. Commission fees are well documented. The consignment route allows the collector some level of control on asking price and net results, if coins sell.


• Outright Sale: I will pay cash for a collection and place into inventory or will wholesale the portions that are not consistent with my product lines. I have a cash carrying cost associated with an outright sale and also inventory risks. Inventory risks are coins that do not sell immediately, become stale and must be discounted to sell. GFRC sales profit must offset costs, risks and leave a small profit at the end of the day. These factors must be captured in the offer price.

Recognize that recovering 100% of a collection's purchase price is probably an unrealistic goal when offering a collection for outright purchase. This rule of thumb is wise if the collection was constructed in the last 5 to 10 years. Most coins have not appreciated enough to allow collectors to fully recover their purchase price during this timeframe unless technically superior for the grade. If your collection is superior and you were able to have most pieces CAC approved, then this is a different story.

Be prepared to ship your coins to GFRC to secure a fair offer. If most of the coins were purchased from GFRC and I have the records in the COIN system, then a quote can be made sight unseen. Otherwise, plan to ship your coins for a quote or arrange for a transfer and quote at a major coin show or by appointment.

Don'ts

Approach me with a proposal to purchase coins at current retail or near term purchased prices. This sends immediate signal that the transaction is a zero sum proposal and collector has not done his homework on retail and wholesale value. I'm not in this business to work for free and take financial risks to relieve collectors of responsibility for their purchased items.

Ask me to quote purchase prices based on a list of coins with TPG grades. If collectors have been reading the Blog and understand the GFRC quality rating system, then it should be apparent that sight unseen purchase are not viable given the wide range of quality (or lack there of) in TPG holders.

Ask me for a firm quote based on images. I've repeatedly advised that collectors not purchase coins at auction based on images. There is simply to much risk given the number of images that are "juiced up" and lack color accuracy or may hide subtle defects. When presented with auction house images and a request for quote, I will again ask that the coins be shipped for review and offer.

Bottom line

I believe in supporting GFRC customers and other collectors who purchased coins from other sources. If you've not purchased coins from GFRC and wish to sell to me, then be prepared to follow my requirements. You will find that I'm easy to deal with if guidelines are followed. If guidelines are not followed and you insist on engaging in long emails negotiations, then I will simply pass on the opportunity and suggest that the collection be presented to another dealer. My time is too precious these days.

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Customer Feedback

Cleveland Collection consignor, was complimentary to my post. Since the Blog commentary was from a dealer's perspective, this individual addresses the matter from a collector's viewpoint. He writes the following:

Hi Gerry,
I found your blog about your role as a dealer helpful and informative. It revolves around the idea that coins are not like stocks that have a very definable value and can be traded for a few dollars per transaction.

For me as a collector, it means the following:

1. Decide whether you are primarily an investor or a collector.  If you're an investor, buy highest quality key coins and hold them for a very long time.  If you're a collector, you can build and upgrade sets, but don't expect to make a lot of profit.  If handled with some foresight, one can enjoy the hobby and make out OK financially.


2. Whether one is an investor or a collector, buy the highest quality coins available and use the advice of reputable dealers to do so. Also work on developing your ability to judge quality, recognizing your limitations.


3. Try to hold coins for 10 to 20 years or longer.  This way, the 10-30% discount in selling a coin can be spread over many years.


4. When selling coins, allow plenty of time for the right buyer to appear, one who needs the coin for his/her collection and is willing to pay at or close to retail.


5. Recognize the high cost of upgrading.  Try to determine the highest grade of a particular coin that you can afford and do it in a single shot.  I learned this the hard way.


6. Don't keep changing collecting objectives.  This costs a lot of money, too. Decide on one or a few focuses and stick with them.


7. Develop a personal relationship with one or more reputable dealers and treat them with courtesy and respect.  This is helpful in effectively buying and selling coins and adds to the enjoyment of the hobby.