Learn Lessons from Others

Sit back, and let me tell you a tale. The story is fiction to protect the innocent and the not-so-innocent, but the core elements of the story quite frequently happen in coin shops around the country.

Ralph is working behind the front counter in his coin shop when a customer presses the button requesting entry into the shop. Ralph pushes the switch releasing the lock and allows the customer to enter.

As the customer walks with a purposeful swagger toward the counter, Ralph says, “Good morning, what can I do for you today?”

George, the customer, pulls a coin from his front pocket, places it on the counter and belligerently replies, “I’ve researched this coin on the internet and found it is worth between $1000 and $1800. I want to sell the coin, but I won’t take less than $900 for it.”

Rather than respond to George’s aggressive tone, Ralph picks up the coin and looks at it, first with regular eyesight, then with a strong loupe. Ralph closely assesses both the obverse and reverse. Then he says, “OK, you’ve got me. I’ll pay you $900 for the coin.”

George takes the money and exits the store. He smiles and thinks, “I showed him. I did my research and got the price I wanted for my coin.”

Ralph waits until George leaves before he puts a big, happy smile on his face. You see, George didn’t do enough research to know that his coin was a rare variety and worth several thousand more dollars than the $1000 to $1800 range he determined his coin’s value to be.

Now, before you get angry at Ralph for “taking advantage” of George, think about this from a business perspective. At no time did George ask Ralph what his coin was worth. George declared the price he wanted for the coin, and Ralph agreed to pay.

Ralph, as a businessman, is not obligated to pay a higher price than a vendor places on his goods. In this case, George was a vendor selling his goods, a coin.

If you’re still miffed about George’s plight, put the shoe on the other foot for a minute. You visit a coin shop and see a coin you want at a really good price, a price much less than you expected to pay. Would you offer the dealer a higher amount of money or would you buy the coin at the price listed? Or, would you try to negotiate with the dealer to reduce his price even further? Be honest with yourself.

Now, let’s get back to the lesson to learn from George’s experience. He actually offers two lessons – one from a good practice and one from a bad habit.

George’s good practice includes research to determine the collectibles’ worth before attempting to sell them. But, George negates his research with the bad habit of thinking he learned and knows all he needs to know. He should have asked Ralph what amount he would offer to buy the coin.  And, even if Ralph countered with, “What do you think it is worth,” George should have said, “I’ve done some research, but I’m interested in your offer.”

Coin dealers won’t offer to buy at market rates. They do have to make a profit. But, most coin dealers in their shops and at coin shows offer fair prices for rare coins. The research you do helps you make sure they offer fair prices.

Ralph and George are fictional characters, but many variations of this same story happen frequently. If you plan to sell, do your research beforehand, then ask the dealer what he will pay for the coin(s).