By Tom Michael
Sometime in April I received a mistaken call from an old colleague at Educational Coin Company. She had dialed my number by accident and left no message, but when I called back to check what was up, we ended up having a nice conversation. I was pleased to learn that the company’s wholesale business was doing well and that the staff was all in good health. After disconnecting, I got to thinking about other folks in the industry. There are many people with whom I keep in close contact, but also many more that I only hear from occasionally. “How is everyone doing during the pandemic?” I thought.
Like everyone else, I had been keeping in touch with family, reading the news and doing my part both to distance from and support my friends and neighbors. Like many in our industry, I was watching the coin market change across the globe and piecing together in my mind where it was all leading. But within our hobby, I really did not know how everyone was faring.
My good friend, Numismatic News Editor Maggie Judkins, and I discussed the matter, and she pointed out that if I was wondering and concerned, perhaps our readers might also want a better view of how people in the hobby are faring during the pandemic. I began compiling a list of people to contact and a short series of questions to ask them and sent them out during the first week of May. Responses have been coming in, and the news has been enlightening and generally very good.
This will be the first of a two-part article relating what we learned about our friends and our hobby under the pressures of coronavirus and subsequent COVID-19 concerns. Because we were not able to contact everyone, I encourage you to write in and let us know how you are and what you have been doing to pursue your hobby interests during the pandemic.
After fielding a good number of replies and enjoying many conversations, there are a few basic conclusions we can draw about how work-from-home and stay-at-home policies designed to slow the spread of coronavirus have affected the coin market. The first and happiest news is that most people we spoke with thus far have remained healthy. That includes the personal contacts, their working staff, and families. I was extremely pleased to hear this but remain painfully aware that not everyone has been so blessed. In New York and New Jersey, we were told of some relatives having the virus and recovering slowly.
From a business viewpoint, the pandemic has affected the coin market in two major ways. First, the absence of coin shows after February has made it very difficult for some dealers to secure supply of coins for their customers.
Jeff Garrett, owner of Mid-American Rare Coin Galleries, told us, “The biggest change for me has been the cancellation of coin conventions around the country. I have traveled to a coin show every few weeks for 45 years without interruption. Coin conventions are an important part of the rare coin supply chain.”
This is very true with the rare coin market, being a secondary market in terms of supply. But we are buoyant folks in this hobby and often have to redirect to new avenues as times change.
“We have been selling more ancient coins and mass market coins to companies who have holes in their sales calendar due to the shut-down of Mints around the world. Rare coins are selling but in a somewhat diminished number. Bullion sales have been brisk, however.” Garrett commented.
Garrett’s mention of mints reminds us that, with some remaining operational and some closing for periods to reorganize, supplies are hit and miss.
Ola Borgejordet of the Royal Scandinavia Mint, a distributor for modern issues relayed, “We’re ordering less because we’re more careful with inventory during these times. Collectors need to react quicker if they want timely delivery of products. If not, they could be pushed back to second-round delivery some weeks later. As an online retailer exclusively of foreign coins, we are experiencing delays from mints worldwide as they operate on limited schedules or delay shipping until certain dates. This is frustrating both to us and to our customers.”
We hope to bring you more news of pandemic challenges at the world’s mints in our second installment.
Some folks working in the primary supply chain of new issue coinage are experiencing some advantages.
Longtime distributor Arthur Friedberg of Coin & Currency Institute had this comment on pandemic business: “Since we don’t deal direct with the public, it has hardly changed at all, except for the fact that we are going to pick up the mail and drop things off with less frequency. We are working the same as normal. One thing we have noticed in the last few days is a marked pick up in internet and telephone orders, with this past weekend being one of the busiest we have seen in a long time thanks to the announcement of the opening of the order period for the 2020 Netherlands Gold Ducats.”
Altering their way of conducting business has been a challenge for many dealers, but the pandemic has proven to be an especially daunting business challenge for those who operate without a brick and mortar store and for dealers who have not been able to open their stores due to non-essential business designations in many states.
“Our office is now closed to the public, and for the last 5-6 weeks my employees have been working from home,” said Garrett. We are trying to catch up on long put-off chores – sorting coins, filing, marketing, etc. My wife and I have been coming to the office throughout to answer the phones and receive shipping.”
Those whose primary source of supply that came from shows are experiencing the most severe downturns in business. They have strong customer demand, but do not have the coins to sell them.
Longtime gold dealer Robert Steinberg, owner of Steinberg’s, Inc., related that, “we do 90 percent of our buying at coin shows and since all of the shows have been cancelled since the Atlanta ANA in February it’s been difficult to find new material. If we could find fresh material we could easily sell it on our website – as people have more time to check out coin dealer websites during the quarantine!”
Steinberg is one of the best world gold coin dealers around, and shortly after hearing from him I saw that he had circulated a list of newly acquired coins for sale. Goes to show, you can’t keep a good man down!
Those who had already built a customer base online and maintained it through active updating are positioned well for business during the pandemic. Author and coin dealer Bob Reis did just that.
“My website, anythinganywhere.com, had been operating since 1998 and had got in a rut,” said Reis. “We opened a new website, goldenruleenterprises.org, last August and things started moving more or less immediately. When COVID hit I got precisely two avisos from overseas clients to the effect that, you know, the situation, they’re out of the collecting business for the time being. A steady stream of new and returning customers are more like: well, I’m stuck here at home and I’m not broke yet, I’m going to buy some coins. Apparently there’s always a market for quality and value, as it were. We’re historians, us numismatists. The 14th century was in every way worse.”
Dealers and auction houses that had already developed a larger online presence prior to the pandemic are faring better, even on resupply. The cost of resupplying stock is rising, particularly on silver and gold bullion, which is becoming very difficult to obtain against increasing demand.
As Robert Mish, owner of Mish International Monetary, Inc, explained it, “premiums have increased because existing minted product has been bought out and resupply cost is driven up.”
Mish’s shop remained open in the Bay Area of California, considering their business an economic necessity. They have been doing plenty of commercial bullion trading, but the premiums have risen. While an ounce of gold used to be bought at about 2 percent over melt value and would be resold at about 3 percent over melt, current market has a buy of roughly 6 percent over melt and is selling around 8 percent over melt. The demand is definitely there, but supply can be a problem.
Kenneth Lewis, CEO of APMEX told us, “Our biggest challenge outside of adjusting to the new norm related to the pandemic has been the availability of inventory. We have had to be super creative to get inventory. One example is we have actually had to fly over 1M ounces of silver from Switzerland as it was impossible for us to meet our needs with inventory in the U.S.”
APMEX has seen huge increases in volume but has been happy to be able to maintain delivery, while still protecting their staff.
“In March, we made the decision that all non-operational employees would start working from home,” said Lewis. “We would use products like Microsoft Teams, VPN, IP phones, etc. to help stay on top of the business. Our customers who call in will not notice a change. For our operational areas and anyone else that enters the building, we have implemented many of the CDC recommended guidelines.”
Almost everyone who responded to our first round of emails has been able to maintain nearly all their business services, with some shifts in approach.
Lee Crane, owner of L&C Coins told us that, “The only service we are not able to offer our local customers is in-shop showing or purchasing of coins. We have been able to pretty much operate fully in regards to our mail customers. The interesting thing is that we are discovering ways to streamline our processes. We will also be adjusting our inventory in the future to carry coins that are more popular with our customers.”
Unfortunately, those whose businesses had been structured primarily on face-to-face contact through travel, shows or open shops have been the most affected due again to the cancelation of coin shows, closing of shops and banks, and the near total absence of overseas and even interstate travel. As a business based in personal contacts, numismatics is now having to change.
Mitchell Battino, owner of Hudson Rare Coins, expressed to us, “This business model had been in a slow but steady decline, it’s viability in question long before COVID-19 abruptly halted it. The ability to buy and sell online, already well-developed by auction houses and dealers large and small, has enabled them to not only survive without physical interactions with clients, but to thrive in the current climate of strong demand for physical gold and numismatics.”
In sister publication, World Coin News, I have touched on the subject of auction houses shifting entirely to online auction sales. From my personal observations, those businesses that had already established online auction sales, both in live and timed formats, have made the transition to doing all their sales that way much more smoothly.
Daniel Frank Sedwick, owner of Daniel Frank Sedwick, LLC, let us know that “Our day-to-day business has remained mostly unchanged. We have a private office and can focus mainly on online, eBay and phone sales, which have been steady if not slightly higher than usual. Our next Treasure Auction is coming up on May 27-29 and we’ve had around 50 percent more bidders register compared to the same point in our previous May auction. Since we were unable to show lots in person at the Central States coin show, we’ve posted additional photos and even videos of lots in our auction so bidders can have a better understanding of the material.”
Quick adaptation to circumstances seems to be the best asset anyone in the business of coins can have during the pandemic.
Coin dealers who depended on shows and shops for sales have also transitioned to online dealer trading pages and have done so quickly if they were already familiar with the format. We have seen on Facebook dealer trading networks and even a few live auction sales pages. We hope to cover this aspect more fully in our next installment.
My personal observation is that everyone will have to move more in these new directions in years to come. On the plus side, I believe that many collectors have already become accustomed to searching for their hobby collectibles in online locations, so those skills and that mindset have already been developing. I look at it as just another change in our hobby and one that can lead to a bright future if we follow the path that has been laid out for us.