SMS Posted June 19, 2010 Report Share Posted June 19, 2010 I felt this may be a more appropriate place to post a response. Want to get your opinion. Ebay seems to afford a large audience. Usually I can put an item up for $9.99 and it will be bid up near the trend. How do you find Coinbug? Does it take a long time to sell an unpopular coin like an obscure Canadian 20 cent piece? How do you come up with a price? With the way silver prices are modulating this years books are already outdated? eBay does, indeed, afford a large audience. However, it is not the size of the audience so much as it is the quality of the audience. eBay affords quite a few speculators diving in to try to get a steal on something they may believe, for whatever reason, may hold enough value to turn a quick profit. When these speculators jump in, there is a chance that ignorant hobbyists (or even an investor or two) may misread these actions and follow through, causing the bid price to raise. You really have just as much chance of meeting up with "trends" (although that term itself is a very subjective and broad term, as there are many different "trends"), just as much as you have the chance of failing at well below wholesale market levels and losing money. With a venue such as Coin Bug, you have a less generic audience. Because you have a specialized audience, you have a much smaller one. However, the quality of this audience is much higher. You will have a more highly educated audience with regards to the items you are selling, and therefore, a much lower chance of having problems arising from the transaction. Any possible problems aside, with regards to the venue, eBay has a much higher cost of selling than other venues such as eBid or Coin Bug. If you are investing (ie. buying and selling with a long term commitment for the purpose of generating an acceptable return) then the cost of selling is very important...even more important than the investment term to an extent. If you are trying to "sell quick" then you are either a speculator, or a dealer trying to offload inventory. In the case of the latter, then a loss is more than acceptable in order to turn the funds back into the game as quickly as possible so as not to lose any opportunity. This is akin to a wash sale. In the case of the former, there are many reasons why a coin may attract "trend" prices. It could be that people believe they "see" something in the photo that may indicate some form of variety, or the description may be hyped and over-rated, even on the borderline of being deceptive and/or misleading. You may even have bidders looking to artificially create a loss by over-paying for your coin just to have a loss on the books for tax reasons. There are many reasons why a coin could reach or exceed a "trend" value. But, more importantly, as an investor, the bottom line should be considered. The more money you are paying in venue and money processing, the less your investment is returning. This is the most important aspect of investing in coins of any kind, whether they are common classic coins, or rare varieties. If the length of time you must hold the investment is really that important to you, then you are more a speculator and are playing a quite more dangerous financial game with coins than I'll get into here. Now, with that said, the rest is fairly quick and to the point. Coin Bug is quite a different monster than eBay. eBay has a number of different ways of selling in their venue. You can have a straight no reserve auction, auction with reserve, auction with or without a direct buy price, fixed pricing schemes, fixed pricing with offers, classified type listings, etc, etc. Coin Bug, on the other hand, has two general ways to sell: Fixed pricing and fixed pricing with offers. Now, because you have a fixed pricing scheme, that is going to cause most speculators to pass the venue by. eBay is a venue of speculators. So, with a venue such as Coin Bug, you are most likely to have the more serious-minded, educated buyer. If you want to attract the quick sale in a venue such as Coin Bug, you would need to price the coin at below "trend" but to such a level that the bottom line produces an acceptable return on your investment. Yes, a venue such as Coin Bug could take longer to sell than on eBay, but you are also able to possibly sell the coin at a lower than trend price and still have a higher bottom line! Comparing apples to apples, a fixed price listing on eBay for a coin is going to cost you $.85 + 12% of the price of the sale + 2.9% of the total amount collected + the amount of actual packaging and shipping + the capital gains tax. With Coin Bug, you have as low as 3% of the total amount collected + the amount of actual packaging and shipping + the capital gains tax. You practically wipe out the $.85 + 12% of the sale price! If you trade as little as 100 coins a year, that's a savings on your investment of over $200 on low cost $10 coins. As well, you are not restricted to utilizing an eBay owned, or eBay approved, money processing service. Even comparing the costs of an auction started at $9.99 on eBay, you will still save over $100 on those same 100 sales. A more comparable site to eBay would be eBid. On eBid, you can utilize both auction style and fixed price style listings just as you would on eBay. However, there are more useful functions as well, such as auction extension like Yahoo Auctions used to have. This is where a bid made in the last minute of the auction automatically extends the auction time (this is an optional feature). They also have a program that you can pay a one-time lifetime fee of $50 to have no final value fee. Being that basic listings are free on both Coin Bug and eBid (costs incur for "extra" features), your costs would be completely paid with only $550 in sales compared to eBay. So, any sales receipts over $550 with a lifetime member fee would be equivalent to saving $1.89 for each $10 coin you sell! You would be able to sell that exact same coin at eBid for only $8.20 and still make a larger profit if you accept a check or money order! Sales and payment venues are one of the key factors in determining whether you are going to make a good and acceptable return on a coin as an investment. Prior to the "age of the internet", coins were, in fact, a very viable and plausible means of investment. The cost of both the sales venue and payment venue were negligible compared to the overall return. With the internet, however, we now see that the sales and payment venues are eating up the majority of the returns on any form of coin investment. And, as always, with a more obscure coin, it will most definitely take longer to sell. Using eBay to sell an obscure coin is really, in my opinion, not a very intelligible decision. You would be open to a loss due to underselling the value of the coin. Speculators are usually very intelligent individuals. They will not let in to others that they are considering a more obscure piece and will usually wait until the last moment to make their move on such pieces. Just as a seller will try to gauge the value of a piece, the speculator will also do such. Regardless of the price of precious metals, the "trend" books are always outdated. In fact, most people do not even understand what a "trend" is. "Trends" are not listing of historic nor current values. They are speculations of future values based on historic data and current market acceptability. It is true that some use these "trends" (even the wholesale trends) to value their coins and set prices based on these values. However, these "trends" are good indicators of the market value of a coin. Investigating the historic value speculations on a coin can very well help to understand if a coin is, first of all, becoming sought after, a sleeper, or over-rated. Once you understand the historic trend, you can interpret the current market data better. The best market data to use is data from the venue you select to use. If you are going to use an auction venue, research recent sales of similar, as well as identical, items from various venues. Include all costs incurred by the buyer to determine the overall purchase price. This includes handling fees, shipping fees, membership fees, buy premiums, etc, etc. You should also utilize unsold data to determine ask price levels that the market did not accept. This will help to offset any inflated sales data you may encounter. When selling coins, you want to present yourself as knowledgeable of the item you are selling. Inflated, as well as suppressed, ask pricing for a coin indicates an ignorance of the coin as well as its value. As an investor, you want to make the market, not follow it. You want the market to accept your ask offer, not perform your ask in accordance with the market's desire. If holding the coin until the market outlook changes, then that's what you should do. Investments are for the long haul, even in coins. It takes quite a bit of research and time to make a good return. Assessing the costs is the most important aspect of making a return on your investment. On the internet, this means selecting the proper venues for both sales and money transferring. I hope this information helps a little for everybody when it is time to sell your coins for investment. Quote Link to comment Share on other sites More sharing options...
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