I was out early this morning.
I passed a pet shop on my way to work.
On the front of the building was a sign that caught my eye.
It proclaimed, “Hedgehogs $199.99.”
Hedgehogs are pets?
I didn’t know.
Is this a new trend?
I have no idea.
This is probably how many people feel about coins.
It is widely known that you can collect coins.
But it is not widely known what factors determine value.
Scarcity is the number one value to determine the market price of a coin.
This seems to be fairly widely understood.
But the other half of this equation is demand.
1913 Liberty Head nickels are valuable because there are many more potential buyers of a coin with a mintage of five than there are coins available.
The balance is more subtle for other coins.
The 1909-S VDB with a mintage of 484,000 is the top most desirable coin in the Lincoln series among collectors.
That is because there are millions of Lincoln cent collectors.
However, a mintage of 484,000 for modern commemoratives or gold coins renders these pieces hopelessly common.
Potential buyers do not number in the millions.
There simply isn’t the level of demand existing to create a large collector premium.
These coins end up being valued as so much precious metal.
Then there is grade.
It is easy to know that MS-70 or Proof-70 is best.
The number implies desirability.
It is desirable.
It is the best.
However, it is easy to find an MS-70 or Proof-70 silver American Eagle.
It is virtually impossible to find a Proof-70 or MS-70 Morgan dollar.
This makes the Eagle routine and the Morgan the pot of gold at the end of the rainbow.
It is all a numbers game.
How many are there? How many collectors want to buy them?
None of this is rocket science, but it is not something you pick up among friends in the school yard or even the country club.
In that way, hedgehogs and collectible coins are the same thing.
Now that the pet store has gotten my attention, how would it go about trying to make a sale to me?
That is the eternal problem of the coin business.
When people become aware of coins, how do we make the sale?
That is why marketing is so important.
Buzz blogger Dave Harper has twice won the Numismatic Literary Guild Award for Best Blog and is editor of the weekly newspaper "Numismatic News."
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