by Louis Golino for CoinWeek…..
Coins from the Perth Mint in Western Australia are eagerly collected all over the world and are renowned for their high quality and innovative designs and themes. More than most other world mints, Perth has pushed the envelope of modern world coins into all kinds of interesting areas that involve the use of color and other techniques. And their bullion coins have a strong global collector base and impressive price track record.
American customers are believed to make up a major, possibly the largest, segment of buyers of Perth numismatic products. Over the past year when several limited edition Perth releases were made available on the mint’s web site (www.perthmint.com.au), it was virtually impossible to successfully place an order because so many people were on the site trying to order at the same time, and Perth’s ordering system was overloaded. The U.S. Mint regularly faces the same problem.
The Perth Mint made several changes over the past year to improve this situation such as using a queue system that staggers orders. That was used to good effect for the release of the high relief dragon earlier this year.
But Perth has also been using another technique, namely, preventing American customers from being allowed to order certain high demand, limited edition releases. Instead those buyers are directed to an American company to order the item.
This approach was used recently for the 2012 high relief Kookaburra coins, which American buyers had to purchase from Paradise Mint. When they first heard about it, many people were concerned that prices would be higher than Perth’s issue price, which does tend to be quite substantial, probably because there is such strong demand for their products. Buyers were also worried that coins would only be sold already graded, or that raw coins would be cherry picked.
As it turned out, the high relief coin sales went smoothly at Paradise because plenty of coins in their original packaging were available at about the same price as at Perth. Paradise also sold graded examples.
American collectors were also not allowed to order the 2012 five-ounce proof Koala coin, which was released to U.S. customers through Asset Marketing Services, Inc., which owns New York Mint.com and Gov Mint.com.
From the time it was announced dragon collectors were excited about the five-ounce proof coin. Relatively few dragon coins in Perth’s Lunar II series have been issued in proof without color.
When the five-ounce coins were listed for sale on June 5, American buyers found that once again they had to purchase the item from a U.S. company instead of from Perth.
It turns out that the five-ounce dragon project was actually the New York Mint’s idea. The coins will available there beginning July 16, and the coins will be sold graded, including first strikes.
I suspect a lot of American collectors will be disappointed by the plans to release graded examples of the 5-ounce proof dragon through New York Mint. This will almost surely increase prices. The coins are also only available through direct telephone sales at 800-642-9160.
Perth officials also told CoinWeek that “Although the New York Mint did suggest that the Perth Mint produce a 5 ounce size of our popular Australian Lunar Year of the Dragon coin, the release was part of the Perth Mint’s ongoing program. A significant portion of its mintage, however, was consumed by the New York Mint for customers in the US. With regards to it release, the Mint has suggested that customers call them on their sales number and they will capture names and orders for when they arrive.”
On the issue of why Perth is releasing more coins through exclusive distribution arrangements, “The Perth Mint’s distribution arrangements are purely commercial decisions that we believe overall best satisfy our markets.”
U.S. buyers can obtain the dragon sooner by ordering on e-Bay, particularly if they want one in original government packaging. There are several European and Asian sellers who have the coin in stock.
Some American collectors feel that having some advance notice would have been helpful, but these are business decisions by Perth. Nevertheless, the lack of notice compounded the sense of disappointment for American dragon collectors.
If the Perth Mint continues to release high-demand, low-mintage coins this way, there is a danger of eroding its American customer base. For more on how the lockout of American customers may affect Perth’s business and some alternative suggestions for the release of such coins, see this blog post.
In 2010 Perth used a similar arrangement to distribute the high relief Kangaroo.
In addition to issuing the five-ounce proof Dragon on June 5, Perth also issued a number of other coins including an Australian map-shaped proof Kookaburra coin, that sold out quickly, a series of one-tenth-ounce colored platinum coins for the Discover Australia series, and others.
Louis Golino is a coin collector and numismatic writer, whose articles on coins have appeared in Coin World, Numismatic News, and a number of different coin web sites. His column for CoinWeek, “The Coin Analyst,” covers U.S. and world coins and precious metals. He collects U.S. and European coins and is a member of the ANA, PCGS, NGC, and CAC. He has also worked for the U.S. Library of Congress and has been a syndicated columnist and news analyst on international affairs for a wide variety of newspapers and web sites.
Louis,
Good article, I am glad to see this topic getting some exposure in the press. One of my concerns is that if these practices keep up, this will morph into a situation similar to the situation which developed with the 2010 AtB bullion coins. I also think your suggestion of searching for reliable third party dealers is a good one. If people truly want the coin, it doesn’t make sense to boycott Perth, they should instead seek to “evade” the lockout and buy the coin from reasonable dealers.
I’m a bit sorry that map-shaped coin you mentioned sold out so quickly. I was thinking of folding it into my next series of purchases from the Perth Mint. Perhaps it will reappear on their website at some point given how it’s only listed as “unavailable.”
I liked the graphic you used for this article. :-)
Thanks, Captain.
Perth Mint also did this with 2011 and 2012 5 oz Silver Koala. Also 2011 1 oz and 2 oz Gold Koalas and they are planning to do the same with 2012 1 oz and 2 oz Gold Koalas.
Separately, 2012 Australian Olympic Team $1 Five-Coin Set is only available to Australian Customers, but that may be related to IOC rules.
Thanks, Shutter.
What’s the Problem?
Surely it is beneficial for U.S. customers to be able to buy from a local (U.S.) supplier. This makes payment, currency conversion, shipping, import duties and taxes much easier for the customer, and for the shipper. Of all the world’s mints, we find the Perth Mint in Australia are by far the easiest and friendliest to deal with.
Our own British Royal Mint are painful and autocratic to deal with.
In the past, when we have enquired about buying direct from U.S. and Canadian Mints, we have been told they would only supply direct to north American companies (this may now have changed).
The Perth Mint are also prepared to listen to and talk to its customers, so if a major dealer suggests a product idea to them and is prepared to commit to a large percentage of the issue, then this also makes commercial sense, and otherwise the product in question may never get made.
Sure, if your local dealer seeks to profiteer from the arrangement, you should probably complain to and about the dealer rather than the Mint.
We have a positive example for:
Perth Mint recently released a fabulous pair of Australian 2012 Queen’s Diamond Jubilee proof coins, each weighing one kilo. One of the coins is .999 fine silver, while the other is .9999 fine gold.
Australian customers could buy direct from Perth Mint, who tell us their own allocation of the silver coins is now sold out. We have stock and availability, and while our main markets are the U.K. and E.U., we are happy to ship directly to collectors world wide, or through other dealers.
We set our own prices for both, but they are actually very similar to Perth Mint’s own prices, which are extremely reasonable.
To illustrate this, please consider the British Royal Mint recently issued one kilo silver proof coins for the 2012 London Olympics £3,000; and the Diamond Jubilee (£2,600), our price for the Australian coin is only £1,295! Less than half the price of the similar Royal Mint products.
They (the Royal Mint) also issued kilo gold proof coins for both events, priced at £100,000 and £60,000. Our price for the Australian coin £39,500. You could buy 4 from us for less than the price of 2 from the Royal Mint.
By the way, why anybody in their right mind would want to buy “graded” coins, we do not know, and as for so-called first strike coins, it might be more polite for us not to speak our thoughts.
If your readers would like to see photos of the Australian coins, we have them here:
http://www.flickr.com/photos/lawrence_chard/7314831644/in/set-72157628091212230 (gold), and:
http://www.flickr.com/photos/lawrence_chard/7222001840/in/set-72157628091212230 (silver)
As far as production quality goes, most years we have some British Royal Mint products which are defective or sub-standard, but I cannot remember receiving anything similar from the Perth Mint.
Service-wise, the British Royal Mint will not directly replace faulty goods for us, we are obliged to ship them back to our suppliers, mainly outside the U.K., who have to ship them to the Mint, who ship the replacements to the intermediary, who then re-ship them to us.
If there is a downside to buying from us, it’s that we don’t like credit cards (we do however have US$, Can$, and EUR€ bank accounts for wire transfers), and we don’t always manage same day shipping. If that makes us sound slightly old-fashioned, then we will confess to the accusation, but on the other hand, we do understand what it is like to be a consumer, and we do like to try and offer our customers good old-fashioned good value.
Just as every every collector is human and different, every mint is entitled to be different (they are run by humans), and dealers are human too, so should be expected to do things their own way also.
Lawrence,
Your reply could almost be an article in itself!
While your conjecture of local dealers being easier to deal with seems reasonable on its face, in practice this is almost never true. Whenever possible, I seek to do business with national mints directly as dealers tend to hike premiums quite steeply using the price offered by the national mint as a “baseline.” This isn’t always true 100% of the time – many third party dealers are charging much less for Perth’s 1 kilo gemstone dragon than Perth itself is, and occasionally I get lucky and find one which is not overcharging – but it’s true often enough that I prefer to use third party dealers as a last resort.
Furthermore, in the case of the five ounce dragon proof, the entire US allocation has been sold to one dealer, which is infamous for charging very high premiums. Your comment about the local dealers deserving the blame for profiteering also makes sense on its face, but human nature being what it is, Perth will take some of the blame for it, whether it is deserved or not.
Your comments about Perth being easy to deal with are precisely why I prefer ordering directly from them and why this sudden trend of regional lockouts is so dismaying to me personally.
I also want to make it clear I am not aiming my comments about third party dealers at your business personally (as I have never done business with you before), but am speaking just on my general buying experiences over the last few years.
CaptainOverkill,
I was surprised to hear that most US dealers charge more than the issuing mint, although I have noticed a lot of small UK dealers who seem to do just that, mainly on eBay.
Our company also tries to give buyers a good deal on British new issue coins, typically pitching our prices about 10% less than the Royal Mint. although we suspect the Mint don’t like it. This year we took 500 of the 2012 proof gold sovereigns, out of 5,500 mintage. The RM price was £500, and I can’t remember off the top of my head whether our “pre-release” price was £425 or £450. Last time I heard, we only had 2 pieces left. It may surprise you that we did not buy our allocation direct from the Mint.
We only raise our prices later to retain some stock, if the issue has been a sell-out, and in response to market forces.
We knew you were not including us in your criticism.
By the way, we just saw the new 2013 silver dragon coin, and some other forthcoming Perth Mint products, and they do look good!
i think if the 5oz dragon is a standalone coin and solely the idea of that specific dealer, like the new zealand silver dragon for gainsville or titanic for apmex, it should be fine. but this one is not the case.