From the Jan. 24 Numismatic News E-Newsletter:
Are Mint profit margins too high for collector coins?
Here are some answers sent from our e-newsletter readers to Editor Dave Harper.
Are the Mint’s profits high? Let’s see. As of this writing, silver is at $19.89 and the Mint just charged me $49.95 for the Civil Rights Act coin. That is a 251 percent profit. Taking into account that there are wages, costs to run and maintain machinery and other incidentals, let’s drop the profit down to 200 percent or even 150 percent.
The average manufacturer’s gross profit percentage varies between 25 percent and 35 percent.
But let’s also look at the cost of older commemoratives on the market, i.e., a 1986-S PR-70DCAM Statue of Liberty dollar selling for $135, or to the lower end a 1993-S proof James Madison Bill of Rights selling for $50.95.
Is the government profit made from its citizens too high? Yes, I’d say so, but if they were a private enterprise then I would say no, considering what the market demands.
Is this a trick question?
To look at the meager seven people that took the poll, it should be obvious no one took you seriously.
I used to buy items from the Mint until 2010 and had subscriptions for a number of items, mostly silver products.
The cost of these items turned out to be cheaper to purchase on the secondary market, so why would I buy them from the Mint at their overinflated costs?
I have no plans to ever buy another item from the Mint again and based on the comments I read in Numismatic News I am not alone.
It all depends upon which side of the coin you are on. I’m sure the Mint does not think it is charging too much as they are in it for the profit. However, as a coin collector for some 55 years, I have seen the price of Mint products climb to prices that I believe have forced many would-be collectors out of the hobby. I have stopped purchasing almost all Mint products not only because of cost but also because of poor and shoddy products. Since I am retired and living on a fixed income it is almost impossible for me to afford the products the Mint puts out because of the high prices. Coin collecting was at one time only for the those well heeled. For a few years the prices were kept to where those with a modest income could afford to enjoy the hobby. However, at today’s prices a lot of coin collectors have given up and left the hobby. So, in my opinion, the Mint is charging too much for most of its products.
John T. Tinney
Yes, the Mint is definitely gouging collectors on coins. They know that if we have been collecting certain sets or specific coins for years, then we have no choice but to pay their inflated prices.
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