IS THERE REALLY SUCH A THING AS A COIN SHOP?

“Hey Dad – Is there REALLY Such a Thing as a Coin Shop? And Do They ONLY Sell Coins There?”

That is the exact statement my 14 year old son made to me a just few days ago. You would be forgiven if you thought that my family would be even slightly better informed about the coin hobby than the average person on the street.

On the Internet I may have hundreds of thousands of subscribers who hang on my every word (OK – maybe those are slight exaggerations). But at home I'm just a dad with a weird day job.

Still – I was surprised by what he said. Sadly, he was absolutely serious.

I told him that when I was growing up, pretty much every town in America had a coin shop or two. He couldn't believe it. Nowadays, I explained to him, there are only a few legit coin shops in each state.

I also explained to him that what is happening now in the coin hobby is actually a very good thing even though it doesn't sound like it at first. While it was lots of fun to visit a coin shop when I was a kid, in retrospect the selection was very limited and the supply of accurate information was sparse.

Coin shops may be largely an artifact of the past, but in the meantime our coin hobby grown larger than ever. The people who dreamed up the Internet (I'm talking to you, Al Gore) could hardly have designed a more perfect business to adapt to the web.

After all, our hobby consists of collecting small, intricately detailed (and occasionally colorful) metal objects. Accurate, gorgeous pictures of these objects can be taken and sent to thousands of people in the blink of an eye at zero cost. Detailed information on every aspect of collecting coins can be compiled and accessed for all to see – again at little or no cost. These objects can be easily and cheaply shipped all over the country and beyond (try stuffing your 1968 Corvette into a FedEx box, for example).

So in the “coin shop” era that I grew up in, a dealer might only pay $25 or $40 for a coin he would hope to sell to a customer for $100. Most of that seemingly huge profit margin was swallowed up with running a store, and with holding all that inventory until someone wandered in the store who wished to purchase that item for $100. The coin might sell in 1 day, or it might take 3 years to sell.

Just about everyone would agree that today's coin market is much more efficient, and that buy-sell spreads are much tighter. That's all to the good.

What this all means for dealers like me who are fortunate enough to make a living in this business is – we have to continually find ways to add value and service while simultaneously driving down the cost of doing so. Those who do not do this – or do not adapt fast enough to the new reality – will simply not survive.

The coin businesses that do add value while cutting costs will thrive and will be part of the Golden Age of coin collecting. That Golden Age is right here, right now. We are living in it. And collectors are the ones reaping all those benefits.

To read Dave's newsletters online, see:
http://www.davewcoins.com/newsletter

Wayne Homren, Editor

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