More than 10 years ago, I served for two years as the only coin dealer on the American Numismatic Association Future of the Hobby Committee. Former ANA president John Wilson chaired it. David Harper of Numismatic News was one of the other members. Among the subjects we kicked around were the changing ways that people would pay for transactions and how numismatic material would be collected and marketed.
We discussed how the Internet may impact the numismatic market. To the best of my recollection, today’s reality surpassed what any of us envisioned at the time.
At the time, we thought that dealers would use online marketing to augment their store, coin show, or mail-order operations. Although we expected a massive expansion of Internet usage by collectors and dealers, I don’t think we fully considered what that would do to existing brick-and-mortar coin shops – especially those in smaller markets.
As I travel around the country, I like to visit coin shops. While on vacation last week, I visited one in a city with a population of less than 50,000. The store had a sizable showroom with a variety of products on display. But I didn’t come across any numismatic items on view. When I asked one of the staff to direct me to such displays she explained that there were none, but the owner could help me if I was seeking something specific.
I don’t want to embarrass anyone by identifying the city or the dealer’s name, but he told me a story that I am starting to hear regularly. He said it wasn’t worth his effort to display coins or paper money for sale in his store. In the store, he almost exclusively buys such items from the public, and then ships them out to wholesale buyers or online retail customers.
This is close to the same story I heard at a shop in the Dallas/Fort Worth area last month when I visited stores before and after the ANA National Money Show. One dealer I visited for the first time after others told me that he had a nice inventory of numismatic material. No such luck. The display cases were filled with gold and silver bullion products. On counters there were just a couple of junk boxes of low-priced material that customers could pick through.
The owner explained that he had recently changed the focus of his business. He had grown tired of customers asking to buy his carefully selected quality coins at the lowest prices offered online for run-of-the-mill or lower quality specimens. Between his in-store customers and online operations, though, he was selling lots of bullion-priced precious metals.
I heard the same story twice last spring in smaller towns in Michigan. In the first shop, the displays were about 90 percent devoted to items you would find in antique malls. That owner told me that he no longer could sell better-date coins and paper money in his store, but could find buyers online. However, he did have success selling very low priced coins and paper money that he displayed in the store.
The second Michigan dealer is one I had visited a handful of times over the years. This past year, he had sharply cut back the display space devoted to numismatic material. Instead, he replaced this freed-up space with other kinds of collectibles.
The reality of changing collector and dealer patterns was reinforced when I was helping a repeat customer earlier today. He made a nice purchase of several items from different numismatic categories and some supplies. If he asked about something that we did not have in stock, such as 2016 5-ounce silver America the Beautiful issues and some obscure supplies, he commented that he would just buy them online. He did comment that we had a sizable amount of material on display and that he really enjoyed looking at it, but he was obviously aware of alternative sources to obtain stuff we didn’t have on hand at the moment.
As collectors can more easily go online to find multiple sources of most numismatic items and also examine high quality photographs of items encapsulated by grading services, the value of patronizing brick-and-mortar local coin shops is diminishing. Focused coin shops in larger markets are likely to survive, but small-town enterprises are at risk of disappearing. The same thing happened to focused stamp shops over the past 30 years. This pattern is now being repeated by coin dealers.
Patrick A. Heller was the American Numismatic Association 2012 Harry Forman Numismatic Dealer of the Year Award winner. He is the owner emeritus and communications officer of Liberty Coin Service in Lansing, Mich., and writes “Liberty’s Outlook,” a monthly newsletter on rare coins and precious metals subjects. Past newsletter issues can be viewed at http://www.libertycoinservice.com. Other commentaries are available at Coin Week (http://www.coinweek.com). His radio commentaries titled “Things You ‘Know’ That Just Aren’t So, And Important News You Need To Know” can be heard at 8:45 a.m. Wednesday and Friday mornings on 1320-AM WILS in Lansing (which streams live and becomes part of the audio and text archives posted at http://www.1320wils.com).