Royal Canadian Mint question

mmissinglink

mmissinglink

Active Member
Does anyone here know whether or not the Royal Canadian Mint offers its collector proof silver coins to dealers at a better price than to the general public?

I know that the U.S. Mint does not; whether you are an individual collector or are the main buyer representing a large coin dealer, you pay the same exact price for a proof collector silver coin if you are buying it from the U.S. Mint. Of course, bullion coins are a different story and I'm certain that both the U.S. Mint and the RCM sell their respective bullion coins (ASE and SCML) strictly to large dealers.

The reason I ask about the collector proof coins is because I've noticed that some dealers will end up selling some of the RCM proof silver coins on eBay for up to 65% off their original issue price a couple of years after the initial release date even if the spot price has not changed noticeably. I can understand 10% or even maybe 25% off the original issue price, but how are dealers able to sell some of these coins with a significantly greater discount unless they are buying it at a significant discount.....which brings me to my first question. Does the RCM sell collector proof silver coins to dealers at a lower price than to the average collector?





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mmissinglink said:
Does anyone here know whether or not the Royal Canadian Mint offers its collector proof silver coins to dealers at a better price than to the general public?
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Yes, they receive a discount

I know that the U.S. Mint does not; whether you are an individual collector or are the main buyer representing a large coin dealer, you pay the same exact price for a proof collector silver coin if you are buying it from the U.S. Mint.
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This is incorrect, dealers are able to receive a discount.

http://catalog.usmint.gov/bulk-purchase-program-landing.html?_ga=1.237371976.954174606.1455806045
 
Thank you db23. How much can the bulk discount be....roughly? If I had to ask about a specific numismatic product from the US Mint, I'd ask about this: "America the Beautiful Five Ounce Silver Uncirculated Coins". And does the discount get larger to the dealer based on tiers of spending or is it the same level of discount no matter how much the dealer buys of a particular coin just so long as it meets the minimum purchase requirement? Does this work roughly the same for both RCM and US Mint bulk purchases of numismatic coins?

If dealers can price these coins only at a small percentage below what a private individual like me can buy direct from the mint then it probably means the bulk pricing isn't more than 30% below retail but if I am seeing dealer prices that are more than 50% below retail, then that must mean something else.

I do wonder though, do dealers ever sell for a loss on the original purchase price? I have to assume yes, for a small percentage of cases, but by-and-large, no.

I suppose with the reward of being able to get bulk discounts and selling to the general public for a profit comes risks for dealers. I'm sure there are plenty of risks but what are the most feared risks for dealers?



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Perhaps the coin dealers are buying the coins over the counter (near spot, etc) then turning around and selling them retail. That's how I get my cool stuff cheap. At some point the original buyer or his heirs decide to dump the coins at the local coin store then they get re-sold.

I know that not all US Mint products can be purchased by dealers at a "discount". The US Mint sells bullion only to authorized dealers. I know for a fact on some items like new silver dollar commemoratives and such the dealers can't buy them direct for a discount; they must buy them just like you or I do. I have discussed this with a dealer who asked me to buy my allotment of certain coins to sell to him right away (he offers a certain amount over what I paid so it is a guaranteed return) so he can retail it- he also has his employees do the same. These are usually new releases with limited mintages, etc.

EDIT:

I spoke to one of my dealers and asked him, and he said they have a "list" of things they can get "for a discount" from the mint to re-sell: presidential sets, yearly silver/ non silver proof sets, mint sets, etc. Some items are not on the list like silver dollar commemoratives and other special limited mintage items, etc. He said they can't buy bullion eagles "for a discount" and that only the national authorized dealers can buy them from the mint like that. He has to get his new eagles from the authorized dealers, then sell them to the public, etc.

Jim
 
Jim4silver said:
Perhaps the coin dealers are buying the coins over the counter (near spot, etc) then turning around and selling them retail. That's how I get my cool stuff cheap. At some point the original buyer or his heirs decide to dump the coins at the local coin store then they get re-sold.

I know that not all US Mint products can be purchased by dealers at a "discount". The US Mint sells bullion only to authorized dealers. I know for a fact on some items like new silver dollar commemoratives and such the dealers can't buy them direct for a discount; they must buy them just like you or I do. I have discussed this with a dealer who asked me to buy my allotment of certain coins to sell to him right away (he offers a certain amount over what I paid so it is a guaranteed return) so he can retail it- he also has his employees do the same. These are usually new releases with limited mintages, etc.

EDIT:

I spoke to one of my dealers and asked him, and he said they have a "list" of things they can get "for a discount" from the mint to re-sell: presidential sets, yearly silver/ non silver proof sets, mint sets, etc. Some items are not on the list like silver dollar commemoratives and other special limited mintage items, etc. He said they can't buy bullion eagles "for a discount" and that only the national authorized dealers can buy them from the mint like that. He has to get his new eagles from the authorized dealers, then sell them to the public, etc.

Jim
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db23's link from above actually gives details about which numismatic coins can be purchased by dealers in bulk from the US Mint.

As for numismatic coins that dealers buy from people at as close to spot as they can, I know this happens but usually these are for coins that are at least several years old I would imagine.....or at least in the vast majority of cases.

What prompted me to start this thread is that I recently saw on eBay some 2014 Canadian boxed numismatic silver coins that are being won at auction at prices that are less than 1/2 of the original retail price. These are probably not coins that have been held by someone for some time (years) and the person died and the coins were then liquidated in desperation by some family member who knows nothing at all about coins....these are 2014 boxed numismatic silver coin that had a retail price of about CAD $115 on the RCM website not too long ago.

So this makes me scratch my head as to how sales such as this can be profitable to a dealer on eBay....or might the dealer be losing money on these coins?

I can't imagine that the bulk discount price for silver numismatic coins for dealers is 50% off retail prices let alone significantly more so that when the coin is sold on ebay the dealer still makes a little profit.



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thecoinanalyst said:
Those RCM coins were sold most likely at a loss apparently because the dealer had financial problems.
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I feel sorry if that's the case but on the other hand, one person's loss is anothers' gain.




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I was in a Canada Post Office the other day and they had a number of RCM collector coins on display which were discounted 30%.
I believe there is only one authorized dealer for RCM bullion in my city and the other dealers have to buy it from him. The authorized dealer also sells his bullion at a higher premium to the general public than the other dealers. He probably does that on purpose so that he doesn't have to deal with little buyers like me.
 
A lot of misinformation here about this.

As a dealer I can tell you discounts go lower than 15% on RCM products.

Higher value items like Gold Coins, even 5oz Silver coins get the lower end of the stick. After that the regular 1oz/2oz stuff is slightly higher but those discounts are tiered.

Many dealers sell coins at a loss (including myself). These are products that don't sell well and its more effective selling them at a loss and making cash available for use in other products from where profits can be obtained.
 
Ok, so if a dealer takes a loss to free up cash to use to make a profit, would he then not restock and avoid those coins that don't sell well? As its RCM coins, maybe they don't sell because customers are avoiding milk spot issues? Will the RCM wonder when dealers stop buying from them?
 
PeterS said:
Ok, so if a dealer takes a loss to free up cash to use to make a profit, would he then not restock and avoid those coins that don't sell well? As its RCM coins, maybe they don't sell because customers are avoiding milk spot issues? Will the RCM wonder when dealers stop buying from them?
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The milk spot issues are not with their numismatic products, just with the bullion products.

Typically when a coin comes into the market you can't always accurately predict what will do well and what will not. RCM in the last couple years started thinking more about short term profits rather than long term, and as a result pumped out a lot of garbage. It's one of the reasons we did not buy any RCM product in the 2015 calendar year (outside of the $xx for $xx coins which you can't lose money on).

But my point was...if a dealers been sitting on a product which hasn't sold in a year for example. There's an opportunity cost to holding that product. If the expected income on putting that cash on a new release is higher than the loss taken, then its worth it to do.

Just to give you an example, We purchased around 500 World Money Fair Privy Maple Leafs back when they were released. We sold about 400 of them at a profit....the 100 that were left after demand fell down, we slowly lowered prices where we first sold at cost, and then continued to decrease to the point where we were losing about $5-10 per coin we sold on about that last 30 or so coins. I think we still have a couple of these left. And this was just so we don't have to sit on inventory and can use the cash elsewhere.

Overall, we made a nice return, and the losses we took on a few coins were nothing compared to the profits on the majority.

Even outside of the coin industry, nearly every industry does this. Walk into a Walmart or Best Buy and they're sometimes clearing out games that were previously $70 for only $5. It's literally just to get rid of the item and clear cash/inventory space.
 
Hey wsd. How's the Voyager selling for you guys. I got one of those awhile back, and had it graded PF70. I was stoked.
 
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