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Let's enjoy the luxury of collecting coins

Numismatic News editor explains how coins are luxury items and advises collectors to just enjoy the hobby.
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I am a consumer of luxury goods. What kind of stuck-up snob am I? Do I drive a Rolls Royce? No. My 14-year sedan doesn?t qualify. Do I wear a Rolex? No. I have a pretty euro watch made by the Austrian Mint, but its cost is in the routine category. Perhaps I drink champagne like the late Grover Criswell and John J. Pittman. No to that, too. I wouldn?t know what vintage to order with my Monday night Lions meeting dinner, so I settle for a Miller MGD.

What luxury goods could I possibly be writing about? Well, it is as plain as the nose on my face. I am a coin collector. Coins are luxury goods.

Some might quibble with my use of the term ?consumer.? After all, how can you consume a coin? Whether you say collector or consumer, we are all participants in the luxury goods market.

Why do I assert this? Well, consider the evidence. Marketers of luxury goods know that they offer an exclusive product. Buyers know it, too. Price usually is very expensive, far more than a common garden variety item.

Quantities are limited so that not just anybody can have them. This helps support the high prices. Producers of the goods work very hard to make sure that they fully control the market so as not to undercut the exclusivity. This creates some pent-up demand and a clamor among buyers to keep buying. Counterfeiters do knockoffs because of the pent-up demand.

Perhaps the purest definition is that collecting coins serves no utilitarian purpose whatsoever. It is an activity that is purely an extra, a luxury.
Marketers who know how to cater to the collector sense of exclusivity do very well. Limiting availability is done by original mintages, sales numbers, or survival figures in population reports. The fewer there are, the more we collectors tend to want them.

If every coin collector suddenly wanted a 1909-S VDB cent, they couldn?t have one. Current owners know this and it gives them a psychological boost. Pick any coin at all, and there is an element of this, even down to the lowest Wheat-back cents. Hobbyists save Wheat-backs precisely because they are so much scarcer than current garden variety cents available in change. They are worth only a few cents over face value in many cases, but those few cents push them into a specific category of exclusivity that excludes the bulk of the American population.

Even markets of invented items, gold-plated reproductions and the like, cater to that sense of luxury good exclusivity. Sellers of the reproduction 1933 $20 gold piece somehow knew that telling potential buyers that the real one sold for $7.59 million would make some people want to pay $19.95 for the reproduction. That is a direct appeal to someone?s sense of luxury, even when it is drastically discounted.

Marketers who assume that everybody would be a collector if they were acquainted with the concept just don?t get it. If everyone had an 1804 dollar, would it be worth millions today? It is precisely because not everyone can have one that there are massive numbers of fake 1804 dollars available online. Even a fake appeals to some people?s sense of luxury. Go figure.

Numismatic News is a luxury good. You don?t need it to live, but it makes life better when you have it. If we could send out a copy of Numismatic News to every person in America, half would throw it away immediately because they are not collectors. Of the people in the other half who are susceptible to the collecting bug, nearly all of those would throw the paper away as well.

So much for a mass-market approach to selling subscriptions. If we can offer something that appeals to a potential subscriber?s sense of exclusivity, that helps clinch the sale. Silver American Eagles help fill this role. Back in 1964, Chet Krause was flooded with subscription orders for Coins Magazine when he offered a Kennedy half dollar as a premium. Why did it work? He had them first. If hobbyists wanted to share in the exclusivity, they had to send in a subscription. It was a luxury. Great, isn?t it? I don?t have to wear a tuxedo.