Two small questions about selling silver

[TheSilverMustFlow]

Hello all,

I recently started buying mint-sealed tubes of silver coins and selling the coins individually for a small profit, and I had 2 small questions:

1. I keep hearing that the best way to know a coin's true value is to look at the "sold auctions" on eBay. I was wondering if this advice refers only to the amount paid for the coin itself, or does it also include the shipping fees? For example, if a coin sold on eBay for 100$ + 20$ for shipping, should I be trying to sell that same coin for 100$ or 120$ ?

2. When buying sealed mint tubes of silver coins, some of the coins inside will inevitably have damage and/or milk spots. First off, is this considered acceptable or should I try returning the coins? And if I keep the coins, do I need to notify potential sellers that a certain coin has a small nick, scratch or some milk spots? If so, am I expected to sell it at a discount? I think we can all agree it's annoying to pay for BU coins and get a damaged product, but I'm hoping that doesn't mean I have to sell those coins for no profit or even at a loss.

Thank you in advance for any help, it's greatly appreciated.

[Pete]

Welcome to the silver addicts club !!

Answer to Q1
Sold prices on eBay are a good barometer for market prices and there is little merit in looking too far back in time.
Ignore any 'Buy It Now' prices with no bids etc as these are "chancers" and generally bear no relationship to the market.
Only look at the completed sales and the price paid has to include shipping costs.
The price is the price and a buyer factors this into the equation so $100 + $20 = $120 which is the same as $120 with free shipping.

If selling to any dealer you will struggle to get spot price meaning scrap value of the metal.
Spot price changes literally every second except at weekends so one day you may suddenly see a big difference in price - both up and down.
Forget what prices dealers sell for as a private seller is not always likely to get the same.

Answer to Q2
Bullion coins are only guaranteed for weight and purity and not cosmetic appearance.
Some Mints issue better quality than others but often there is a higher premium to these coins which tend to be shipped from the Mints in capsules.
Sealed mint tubes mean ABSOLUTELY NOTHING in terms of coin quality.
All this means is they haven't been handled by others but many will show scuffs, scratches and milk spots if that particular mint is renowned for producing c.r.a.p. bullion.
When selling you do not need to worry about offering any discounts as on eBay for example the bidding will address this.
You should however always show clear photographs or if selling a bulk lot perhaps avoid stating condition other than regular bullion meaning subject to small imperfections, spots etc. If a particular coin is in bad shape the picture will show this and leave it to the buyer to make a decision.

Whether you can make a profit depends mainly on the spot price of the metal.
If you buy from a dealer when spot is trending near its highs then you will find it very difficult to sell and make a profit, and often impossible if spot has fallen by say 5% or more.
If however spot jumps up 5 or 10% and you bought at a good price then sure, selling individually can make a nice profit but factor in all your costs and fees.
Many fellow stackers buy and hold then sell some inventory perhaps a few years later when prices have changed.
In these instances prices have moved by 25% or more and any bulk discount you obtained is also profit selling individually.
Keeping records is very important to show true cost of purchase and net sale after all deductions.

[TheSilverMustFlow]

15 minutes ago, Pete said:

Welcome to the silver addicts club !!

Answer to Q1
Sold prices on eBay are a good barometer for market prices and there is little merit in looking too far back in time.
Ignore any 'Buy It Now' prices with no bids etc as these are "chancers" and generally bear no relationship to the market.
Only look at the completed sales and the price paid has to include shipping costs.
The price is the price and a buyer factors this into the equation so $100 + $20 = $120 which is the same as $120 with free shipping.

If selling to any dealer you will struggle to get spot price meaning scrap value of the metal.
Spot price changes literally every second except at weekends so one day you may suddenly see a big difference in price - both up and down.
Forget what prices dealers sell for as a private seller is not always likely to get the same.

Answer to Q2
Bullion coins are only guaranteed for weight and purity and not cosmetic appearance.
Some Mints issue better quality than others but often there is a higher premium to these coins which tend to be shipped from the Mints in capsules.
Sealed mint tubes mean ABSOLUTELY NOTHING in terms of coin quality.
All this means is they haven't been handled by others but many will show scuffs, scratches and milk spots if that particular mint is renowned for producing c.r.a.p. bullion.
When selling you do not need to worry about offering any discounts as on eBay for example the bidding will address this.
You should however always show clear photographs or if selling a bulk lot perhaps avoid stating condition other than regular bullion meaning subject to small imperfections, spots etc. If a particular coin is in bad shape the picture will show this and leave it to the buyer to make a decision.

Whether you can make a profit depends mainly on the spot price of the metal.
If you buy from a dealer when spot is trending near its highs then you will find it very difficult to sell and make a profit, and often impossible if spot has fallen by say 5% or more.
If however spot jumps up 5 or 10% and you bought at a good price then sure, selling individually can make a nice profit but factor in all your costs and fees.
Many fellow stackers buy and hold then sell some inventory perhaps a few years later when prices have changed.
In these instances prices have moved by 25% or more and any bulk discount you obtained is also profit selling individually.
Keeping records is very important to show true cost of purchase and net sale after all deductions.

 

Many, many thanks for this Pete, you went above and beyond what I asked, lots of great info that I wasn't aware of before. I'll be reading this over this several times to help me determine how to proceed forward. 

For this purpose I was wondering if you could clarify two points in your post, if you have the time.

You wrote: "Forget what prices dealers sell for as a private seller is not always likely to get the same."

Do you mean that I will typically get less when selling a coin than a dealer would get for the same coin?

You also wrote: "You should however always show clear photographs or if selling a bulk lot perhaps avoid stating condition other than regular bullion meaning subject to small imperfections, spots etc."

So if I understand this correctly, if I sell a bulk order I should state the condition as being "regular bullion"? But I don't need to state the condition when selling individual coins, because there will be a clear photo of that specific coin? In that case, what if I make an ad for selling a coin, but mention that I have 20 or so of that coin available - do I need to show pictures of all 20 coins, since it's not really a bulk lot because I'm selling the coins separately?

I hope I was able to communicate clearly what I meant. Thanks for bearing with me, thanks again for your terrific reply, and thanks for welcoming me to the club!

 

[Centauri167]

I think on your question: "Forget what prices dealers sell for as a private seller is not always likely to get the same."

My opinion is that Pete means that a private seller will/ should always ask less than a dealer. What is normal if you ask me. ( @Pete, if I am wrong, please excuse me )

 

About your other question. If you sell coins with problems ( milkspots, scratches, ... ) you should always mention it clear in the description. When a potential buyer than asks for more info you can show him a photo. If the buyer knows enough because of the description, you were correct and did it right.

 

Your reputation will be everything when you start dealing pm's, so always be correct or this adventure will not last long.

 

Good luck !

[TheSilverMustFlow]

1 hour ago, Centauri167 said:

I think on your question: "Forget what prices dealers sell for as a private seller is not always likely to get the same."

My opinion is that Pete means that a private seller will/ should always ask less than a dealer. What is normal if you ask me. ( @Pete, if I am wrong, please excuse me )

 

About your other question. If you sell coins with problems ( milkspots, scratches, ... ) you should always mention it clear in the description. When a potential buyer than asks for more info you can show him a photo. If the buyer knows enough because of the description, you were correct and did it right.

 

Your reputation will be everything when you start dealing pm's, so always be correct or this adventure will not last long.

 

Good luck !

 

Thanks very much for your advice, Centauri, this is extremely helpful. I suspect you're right that that's what Peter was saying about pricing, that makes sense. I also fully agree with what you said about reputation, it's why I started this thread because it's really important to me to start out right, I don't want to accidentally do anything that might be considered shady or dishonest - both for the sake of my reputation and also because that's just not how I roll.

Can I just ask one more thing? You said I should always mention in the description if a coin has a problem - when you say "problem", do you mean literally any small scratch or blemish, or just more serious problems like dents or deep scratches?

Thanks again! 

[Centauri167]

2 minutes ago, TheSilverMustFlow said:

 

Thanks very much for your advice, Centauri, this is extremely helpful. I suspect you're right that that's what Peter was saying about pricing, that makes sense. I also fully agree with what you said about reputation, it's why I started this thread because it's really important to me to start out right, I don't want to accidentally do anything that might be considered shady or dishonest - both for the sake of my reputation and also because that's just not how I roll.

Can I just ask one more thing? You said I should always mention in the description if a coin has a problem - when you say "problem", do you mean literally any small scratch or blemish, or just more serious problems like dents or deep scratches?

Thanks again! 

Every problem, how small it is, I would mention. If you sell an individual coin you must really go deep in the description and mention it as good as possible.

If you sell a lot, let's say 20 coins you don't have to go in every coin individual but just mention the general problems. Like: selling 20 coins, some with milkspotting and a few has scratches.

And always mention that the buyer may ask extra info/ photo's if wanted.

[TheSilverMustFlow]

7 minutes ago, Centauri167 said:

Every problem, how small it is, I would mention. If you sell an individual coin you must really go deep in the description and mention it as good as possible.

If you sell a lot, let's say 20 coins you don't have to go in every coin individual but just mention the general problems. Like: selling 20 coins, some with milkspotting and a few has scratches.

And always mention that the buyer may ask extra info/ photo's if wanted.

Thanks for such a detailed answer, now I understand and I know what to do. Much appreciated.

[Centauri167]

1 hour ago, TheSilverMustFlow said:

Thanks for such a detailed answer, now I understand and I know what to do. Much appreciated.

You are very welcome.

 

Good luck !

[Pete]

Selling single coins is easy by providing a clear photograph of both faces.
If you see spots or scratches then just simply state, regular bullion with a few marks, spots, fine scratches as shown in the pictures.
If there is a particular noticeable defect like a chip or deeper scratch then you could describe the coin as having e.g. a 3 mm scratch on the Queen's cheek etc.
No-one ever lists every defect because it would scare away all buyers and for sure someone will find under the magnifier a spot that you omitted.
If you don't see any obvious defects then you are generally quite safe in describing the coin as in new condition etc but always refer to regular bullion.

Selling a tube you can always state you are selling a mint tube of bullion and coins may contain common rub marks and milk spots as received from the mint.
Personally I would quickly check each coin to see if any are particularly poor i.e. stand out as such.
This does not entail scanning every millimetre with a magnifier.
Just a cursory look in good light and at different angles will show up anything really noticeable.
If a couple show milk spots say 2mm diameter then maybe show a separate photo of the bad one(s).
On this site I would lay the coins out in a matrix and photograph front and back.
Modern cameras even on phones give a good resolution and when zoomed tend to suffice.
On eBay I wouldn't bother.
Having said that I did once sell a new mint sealed full tube of American Eagles that were rejected because they showed a slightly unusual background sheen.
Absolutely perfect mint fresh uncirculated coins, but to an inexperienced buyer, so on eBay the buyer wins every time usually so I had to refund the buyer.
Fortunately on this site most members are very fair and reasonable and those with experience will work with you.

 

[TheSilverMustFlow]

Thank you for such a detailed explanation Pete, that clarifies everything I wasn't sure about. Very much appreciated, now I can't wait to try my hand at selling silver. Thanks again and have a good one!