1. Don’t worry about learning how to grade; learn how to recognize what a nice coin looks like.
Many young coin dealers aspire to make their money via grading. This can be by cracking coins out of old holders, “making” coins which were previously raw, or by crossing coins from one service to another. Let me preface this by stating that the number of dealers who make the bulk of their livelihood via the upgrading route has shrunk by at least 75% since the early 2000s. I would say that unless you are in the top 5% of all coin graders in the US, you are not making many grading scores.
Grading is essentially pattern recognition. To grade well requires an encyclopedic knowledge of surface textures, color progressions, grading “lines” at the various services, and much more. It will take you years to become a reasonably good grader and many dealers—including some very well-known ones—simply never learn to grade well.
My suggestion is that you be more concerned with learning what makes a coin “nice” instead of what it grades. In my opinion, a “nice” coin is one which displays a good degree of eye appeal. This is a combination of factors which include originality, luster, surface preservation, color, and sharpness of strike.
Taking the last paragraph one step further, my point is that it is more important to recognize that a 1922 Peace Dollar is really nice instead of being able to clearly pinpoint its grade as MS66+. The holder that you buy the coin in may state “MS66+” but it is up to you determine if the coin is nice or is it simply average. This is especially important in series such as Morgan Dollars, Silver Commemoratives, or 20th-century series (i.e. Buffalo Nickels, Standing Liberty Quarters, Walking Liberty Half Dollars, etc.) where two coins in the same grade can be worth substantially different amounts.
In my opinion, it is extremely important to learn about surface alterations. It is an unfortunate fact that significant numbers of third-party graded coins have in some form been altered. These alterations include spot removal, puttying, overdipping, enhanced color, thumbing, and more. Your ability to detect these alterations is essential to your success as a dealer.
2. Make a network of coin partners.
I have been a professional coin dealer for over 40 years and despite knowing hundreds and hundreds of dealers, the majority of coins which I buy and sell are from a small network which I refer to as The Circle of Trust.
What does it take to earn my trust? I have to know that I can count on you to make good on your promises. If you tell me that you are going to deliver me 20 MS65 Saints on Wednesday at $2,300 per coin, I expect to receive the coins on the day we agreed to at the price we agreed on. If you tell me a coin is nice and I agree to purchase it from you sight-unseen, don’t send me a coin that has a prominent scratch on Liberty’s neck. If I tell you I want to be paid within a week on a package of coins I sold you, don’t send me a check with a sticky-note attached which states ‘DEPOSIT IN 30 DAYS.” If you do this to me a couple of times you are out of my network; no ands, ifs, or buts.
As a retailer, it is essential for me to have a network of contacts that will offer my first shot of fresh coins at competitive prices. This does not mean offering me coins that are straight out of well-publicized auctions (unless this is disclosed when they are offered). I also would prefer you not offer me coins with extra baggage (by this I mean coins with a “story”, which translates to them being wildly overpriced).
I also don’t want to be lied to. The upper end of the coin market is extremely small in terms of active dealers, and if you lie to me about a coin’s price or its provenance, then there is a better-than-average chance that I will catch your lie. I don’t mind if you tell me that, in your opinion, a coin is PQ or that it is the second-finest that you’ve ever seen. But please, be transparent and truthful!
When I have bulk items (such as common modern coins, Proof or Mint Sets, or junky cheaper coins), I offer them to one dealer who has bought these items from me for years. He pays me quickly, he is fair with his offers, and he’ll buy everything. If you open a coin shop you’ll get inundated with this numis-schlock and it is important to have an outlet (or outlets) for selling them quickly and efficiently.
3. Your reputation is everything in the coin market; here’s how not to screw it up.
In a business where four-, five-, and even six-figure coins are routinely sold with handshake agreements, your reputation is absolutely essential. And your reputation is likely to be made or broken very early in your career. This means if you bounce a check on someone, or if you brag about doctoring coins, or if you are just plain weird, you’ll acquire a reputation that may possibly stick with you throughout the duration of your career. It is possible that you’ll be able to shed a negative reputation but it won’t be easy.
You’ll also earn a reputation based on the types of coins you buy and the process by which you buy them. If you constantly make counter-offers on coins, you’ll earn a label as someone who is difficult to sell to. If you buy low-end coins, you’ll earn a reputation as a bottom feeder and it is probable that you’ll never be offered nice coins.
Sometimes, reputations are misguided. I have a reputation as an ultra-finicky buyer who will only buy exceptionally choice or rare coins. While both of these claims are factual, I will also buy more mundane coins or coins which are nice but not absolutely flawless. I will sometimes ask a younger dealer why he won’t offer me coins and he’ll say something like, “I don’t have anything nice enough for you.” Let me make that decision; don’t make it for me.
If you are a 15-year-old aspiring dealer, you’ll likely respond to the comments I made in the second paragraph of this section by saying “my budget doesn’t allow me to buy nice coins.” Your budget may not allow you to buy nice $25,000 Proof Gold Dollars, but it certainly will allow you to buy nice $500 Small Size Bust Quarters. And if I look at your box of coins at a show and I see that you consistently buy nice, original coins at your most comfortable price point, then I’m likely to tell other long-time dealers that “Joe Smith has a great eye and sells nice coins.”
Conversely, if you show me a box of no-grades or baking-soda’d Morgan Dollars, I’ll likely think of you as someone who has no eye or who is taking shortcuts.
4. Find a niche that’s right for you.
Good coins are expensive, and most young dealers don’t have the resources to build an inventory which covers every area from Type One Liberty Head double eagles to South American silver. I suggest that you consider finding a niche.
Many younger collectors have figured this out and their niche might be wildly toned silver coins or 19th-century tokens. There are, in fact, a number of areas where nice coins are reasonably inexpensive and there is a reasonably good degree of liquidity.
I have some hints and suggestions.
First, pick an area which is popular but under-serviced by dealers. One series that fits this profile is Bust Half Dollars. This is a very versatile series with coins available from $100 to $100,000+.
Another series which seems under-serviced by specialized dealers is Classic Silver Commemoratives. These are very affordable and very collectible. If you decide to focus on these, I’d recommend you learn which mega-grade coins merit huge premiums, and which are just average quality for the grade.
Once you get established in your niche, you can expand your horizons (the Bust half dealer might branch out to Bust dollars as well) or become pre-eminent in your niche by writing detailed articles or even books.
5. Going Big or going small: the pros and cons of working for a mega-firm.
Many of you will no doubt enjoy an internship at one the “Four Giants” of the numismatic world: Heritage, NGC, Stack’s Bowers, and PCGS.
I think it is critical to your future in numismatics to intern in one or more of these firms. For some of you, it will be a perfect fit. For some, like me, a big firm is a bad fit as I don’t play well with others. I’m of the belief that if I generate $500 profit on a coin, I want to bank the full $500; not split it so many ways that I wind up netting $6.27. I want to do things my way, and I don’t want to be criticized for not doing my business the “Heritage” way or the “Stack’s Bowers” way. For others, the regimentation of a big firm is a perfect fit.
That said, I would have loved to have had a partner who was as savvy at business/marketing/IT as I am at coins.
6. The internet is your friend/the internet is your enemy.
I was an early adapter to the internet, having built my first website in 1994 or ’95. I went from a small mainly wholesale business to a leading specialized rare US gold firm totally as a result of my ability to consistently buy attractive, photogenic coins, and to articulate their rarity and desirability in 250 words or less. The internet is clearly my friend.
Even if you plan to be a 100% wholesale dealer, I would urge you to build a high quality website; if only to let people know who you are, where you are located, what your contact information is, when you are open, and what kind of coins you buy. You can hire someone to build a really nice simple site very affordably.
If you do put up a website, make certain that you update your information. If I can easily tell that your site hasn’t been updated since 2021, it tells me that you don’t really care about your public image and–therefore–you are likely someone I won’t choose to do business with.
This is a perfect spot to segue to my contention that the internet can also be your enemy. Before you post a video of yourself inspired by the YOLO attitude, remember that the internet is forever and the chances are good that someone clever will be able to find this picture in 2023, 2033, or even 2043. The same caution goes for your numismatic posts, whether they are blogs, chatroom posts, or TikTok videos…
7. You make your money buying a coin, not selling a coin.
Many young dealers don’t understand that you make your money on a coin buying, not by selling it.
Let’s say you find a 1911-D quarter eagle at a small show and it is marked as a 1911 with a price of $300. You buy it, send it to PCGS, and it grades AU58. The coin has a value of around $5,000 and this is true whether you purchased it for $300 or if you paid $6,000 for it as a breakout candidate in an OGH PCGS AU58 holder which you felt was a lock MS61.
When you make a big score like this, you’ll be sorely tempted to sell it as quickly as possible. But your cost is just $300, so what’s the rush? Why not send it first to CAC to see if it stickers? If it does, you’ve added another $1,000+ to its value. Better yet, why not consign it to a retailer when it comes back from CAC with a green sticker at $6,500 for 30 days?
Don’t misinterpret what I’m saying here and try to rip all the coins you are offered from the public. There is nothing remotely ethical about knowingly buying the hypothetical 1911-D quarter eagle from the proverbial little old lady who has no idea what she has.
There are coins that you should be in a rush to sell if you make one.
Let’s say you buy three Gem original rolls of 1947-S quarters and you send them in to PCGS for grading. One of the coins comes back MS68+ and it becomes a population 1/0 with a probable value of $7,500++. Your cost is likely less than $50 for each coin including grading. As I see it you have three options:
- Take it around a large show priced at $6,500 and see if anyone bites
- Contact a dealer who specializes in coins such as this and offer it to them on consignment at $6,000
- Consign it to a Heritage auction and see if the two ultimate end users for this coin (assuming there are two) will battle it out and run the coin to 10k+; have Heritage send it to CAC if you haven’t already
Whatever you decide, speed is of the essence because this is a $500 coin in MS67+ with a PCGS population of 73. As soon as a second coin is graded MS68+, the value of this date as a population 2/0 drops by 50%.
8. How to source coins.
As a coin dealer, you are going to need a stable supply. The availability of what you buy is going to depend on the rarity of the coins. If you specialize in MS70/PR70 Modern coins, it will be very easy to find reliable, steady sources. If you deal in Gem VF and EF 19th century silver U.S. coins, it will be difficult to maintain a steady flow.
The obvious sources for coins are other dealers. But how you source these coins is going to play a large role in how well you are able to maintain a good supply and whether you are buying at wholesale or retail levels.
You have the following options to buy coins:
- You can buy at coin shows. If you are looking for very high-end coins, this is going to be frustrating as even grizzled veterans such as myself are finding it increasingly challenging to spend money at shows.
- You can buy online via websites such as mine. This is likely to be your most expensive option, but it has advantages over the first option. For one, you can research the coin and determine if it is good value without a dealer glaring at you across the table. You can also view the coin(s) in more optimal lighting conditions.
- You can buy the coins at online auctions. The four leading auctions firms are Heritage, Stack’s Bowers, GreatCollections, and Legend. All offer an excellent variety of coins in a broad range of prices. Remember that you are competing against retail buyers in all of these sales so prices will often be very high. Also remember that the auction house works for the seller—not the buyer—and if a coin you win has an issue which wasn’t described by the cataloger or which didn’t show clearly in the images, you are basically out of luck.
- You can buy from the public. This can be accomplished in a variety of ways. You can open a coin shop which has numerous plusses and minuses. You can advertise extensively online (or via traditional media), but this tends to be expensive and hit or miss. You can establish yourself as a go-to expert in your community through exposure at coin clubs or by becoming known to local banks and/or lawyers who might handle estates which contain coins.
- You can buy through specialized online groups on Instagram and Facebook. This has its plusses and minuses as well. The coins which are offered may not be the freshest or the nicest but they are often fairly priced. You will quickly learn who the legit sellers are on both platforms. You will also quickly learn that dozens of dealers are searching through listings even at odd hours and if you don’t act quickly, you will lose the coin. These are no-return sales and you might get stuck with low-end coins.
9. You need a mentor – how to find one.
Numismatics is a great business but it is a difficult one to master. You are going to need to find a mentor; someone with more experience than you who can help you navigate choppy waters. When I was a really young dealer, I specialized in Colonial coppers and I had two dealers who helped me. But they mainly assisted me with grading and pricing issues as I was too young and inexperienced to ask them about marketing or general business-related topics.
As I raced through my 20s, I became a specialist in US gold coinage and my mentor of sorts was David Akers, who knew more about US gold coins than anyone else. He would show me great coins from his personal stash and he would answer questions I had about specific coins, but he never seemed interested in helping me grow my business; understandable in retrospect, as I was a competitor.
The fact of the matter is that you actually need two mentors: one for the coin part of your business and one for the business part of your business.
I never took a single business class in college (big mistake) and yet I make 100% of the decisions for my company involving accounting, finance, marketing, SEO and web, advertising, and more. Quite honestly, I wish I had a successful business person to whom I could turn when I need help with an accounting problem or a tax issue or a decision about whether or not to advertise on a certain online platform.
I’d suggest you target a few older, more established dealers and start asking them a few questions at shows or via text/DM. You might ask them to critique a new purchase or two. If you bond and if your mentorship target is amenable, start asking him if there is some way he or she can take you under his/her wing. Remember that at major shows, most established dealers are extremely busy and they may not have much spare time to devote towards mentees.
10. Put a few good coins away every year.
If you love coins and you are good at buying them and evaluating them, it makes sense to put a few away every year. If you put away five or 10 coins every year and you begin doing this in you mid-to-late teens, you’ll assemble a potentially very valuable collection by the time you are in your late 30s/early 40s.
If you buy interesting fresh deals, pull out one really cool coin and put it away after you’ve had it graded. I wouldn’t necessarily choose the very best coin from each group but pick out a coin which speaks to you and which you would rather own personally than make an immediate profit selling it.
11. Why you should never sell your very best coins wholesale.
When you purchase a really special coin—be it for $500 or for $500,000—always try and place it with someone who you can get it back from. Whenever you sell a great coin to another wholesale dealer or you place the coin in an auction, that coin is no longer in your orbit. There are literally hundreds of coins which I have handled multiple times and I can think of one rare New Orleans double eagle which I just bought and sold for the sixth time in the last 17 years. Had I sold this coin to another dealer or placed it in an auction, the chances are virtually 100% that I would have never owned it again.
12. Make a database of coins you’ve bought and sold.
For those of you with analytic minds, there is nothing you can do that is more helpful than to create a database of all the major coins you sell.
As an example, I’ve got a database on the back end of my website which allows me to see every coin I have sold in the past decade. If I look up a coin and it shows that I’ve handled 15 different coins in the last seven years, I can make an assumption that it isn’t rare. I can also check the grades of the coins and if they are all AU50 and lower and I am being offered an AU58, I can determine that this is a really good coin. And, of course, if I see that I’ve handled just two in the last seven years and it’s a date which I would always buy if I liked it, I can determine that this is a really, really good coin.
My database doesn’t do a few obvious things which in retrospect I wish it did. For one, it doesn’t show who I bought the coin from. It’s important to track your suppliers to see who you do well buying from and who you don’t. If you’ve bought 14 different coins from Dealer X and you’ve lost money on all of them, you probably need to stop buying from this source.
One great thing my database does is that it tells me what I sold the coin for. Tracking prices over the years is extremely helpful especially when you are dealing with a date or a type which doesn’t often trade.
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About Doug Winter
Doug has spent much of his life in the field of numismatics; beginning collecting coins at the age of seven, and by the time he was 10 years old, buying and selling coins at conventions in the New York City area.
In 1989, he founded Douglas Winter Numismatics. This firm specializes in buying and selling choice and rare US gold coins, especially US gold coins and all branch mint material.
Recognized as one of the leading specialized numismatic firms, Doug is an award-winning author of over a dozen numismatic books and the recognized expert on US Gold. His knowledge and an exceptional eye for properly graded and original coins have made him one of the most respected figures in the numismatic community and a sought-after dealer by collectors and investors looking for professional personalized service, a select inventory of impeccable quality, and fair and honest pricing. Doug is also a major buyer of all US coins and is always looking to purchase collections both large and small. He can be reached at (214) 675-9897.
Doug has been a contributor to the Guidebook of United States Coins (also known as the “Redbook”) since 1983, Walter Breen’s Encyclopedia of United States and Colonial Coins, Q. David Bowers’ Encyclopedia of United States Silver Dollars and Andrew Pollock’s United States Pattern and Related Issues
In addition, he has authored 13 books on US Gold coins including:
- Gold Coins of the New Orleans Mint: 1839-1909
- Gold Coins of the Carson City Mint: 1870 – 1893
- Gold Coins of the Charlotte Mint: 1838-1861
- Gold Coins of the Dahlonega Mint 1838-1861
- The United States $3 Gold Pieces 1854-1889
- Carson City Gold Coinage 1870-1893: A Rarity and Condition Census Update
- An Insider’s Guide to Collecting Type One Double Eagles
- The Connoisseur’s Guide to United States Gold Coins
- A Collector’s Guide To Indian Head Quarter Eagles
- The Acadiana Collection of New Orleans Coinage
- Type Three Double Eagles, 1877-1907: A Numismatic History and Analysis
- Gold Coins of the Dahlonega Mint, 1838-1861: A Numismatic History and Analysis
- Type Two Double Eagles, 1866-1876: A Numismatic History and Analysis
Finally, Doug is a member of virtually every major numismatic organization, professional trade group, and major coin association in the US.