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To Deal Coins or Not
 | By Alan Herbert, Coins Magazine
January 29, 2008 |
Apparently there's a lot of mystery about being a coin dealer. It usually starts with a question to me, my answer, and then the person goes away mad.
It works like this: "How do I become a coin dealer?"
My answer politely suggests that if the person needs to ask, they probably are not suited for the job. Something on the order of: If you need to ask the price of a Mercedes, you probably can't afford it. I usually add some standard advice, but I always have the feeling that my advice is ignored.
They leave angry, but educatedif they take the advice to heart. I am blunt when necessary and this is one of many places where you can't sweet talk a person into becoming a businessman or a businesswoman.
There is no point in assuring the potential dealer that learning the business is a snap. They will find out soon enough that the exact opposite is true.
Consider that the average coin dealer spent at least a few years as a collector, learning, before trying to go into business. Consider that you have to put money in before you can even think of taking money out. Going into business, even with a substantial collection to draw on, can be a strain.
Sadly, the average wannabe wants a six-figure income the first year in a business. He or she knows little or nothing about the business and starts with no stock on hand. Go figure! I won't even go where that guy is frantically waving his checkbook, yelling, "How do I invest in coins?"
Dealer questions come across my desk with great regularity, and it is a frustrating experience each time it occurs. Frankly, in most cases, if you write to me to ask the question, you are probably lacking one or more of the basic qualities needed to become a successful coin dealer.
If you have been collecting for a period of time, you should have been alert to how coin dealers operate. One possible place to start is with your local coin dealer, who can tell you more about what you need to know in five minutes than I could if I used an entire book.
If you don't know more than the average collector about coins, don't have a head for figures, don't know grading backward and forward, don't know how to run a business of any kind, aren't an aggressive or successful salesman, then you probably should consider another line of work and leave coin dealing to those who do have the right qualifications.
There are no licensing requirements at least in this countryand there are no schools that you could attend. The only tax and other licenses required are the same for any business, although some states may impose licensing requirements on some aspects, such as handling bullion sales or lumping coin dealers in with pawn shops. Since the requirements vary widely from city to city and state to state, the best suggestion I can offer is to find a job with a local coin dealer and learn the trade.
You become a coin dealer by knowing more about coins than the majority of collectors who are your potential customers. You can't just announce you "are" a dealer and suddenly get huge discounts on the coins you buy.
One of the other key elements in success is ample training in operating a business of any kind, and perhaps the most important is a keen business sense. Without these and other factors working for you, your dreams of being a coin dealer are going to be just that, dreams.
Dealers earn their discounts by buying large quantities of coins to stock for their customers. Many collectors assume they can get similar discounts just for buying one or two coins, but it doesn't work that way.
Right behind this question is another regular: Do you have a list of dealers who wholesale coins?
Your best bet is to check the ads in this publication, as the dealers who wholesale coins usually mention it in their ads. Talk to established coin dealers and you can often get sources from them. You will also find a lengthy list of dealers at the American Numismatic Association's Web site: www.money.org.
Switching from one side of the counter to the other is not just a matter of walking around the end. It takes knowledge, a good business sense, and lots or experience, as starters. Did I mention ethics?
Alan Herbert, "The Answerman," may be reached by e-mail at: answerman2@aol.com. Questions may also be directed to him via "Coin Clinic," which appears in each issue of Coins.
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