|The Very Highest Quality Advice...|
|Buying Coins on eBay|
As leading coin dealers for over 40 years, we believe we are quite well qualified to offer some advice about buying coins on eBay, especially as we also sell a small proportion of our stock through eBay.
What Do You Want to Buy?
It may seem very obvious, but you should start by deciding what you want to buy, is it a particular rare date of coin, or is it simply a bullion coin such as a krugerrand?
Two questions in one here! Why do you want that particular coin? Is it purely to invest in gold? If so, you may be better off checking out prices and availability through established dealers. Of course, if it's a rare collectors coin you have been trying to find for twenty years, then that's a perfectly good reason. The second part of the question is why you think it better to buy it on eBay than elsewhere. If it because you think it will cost less bought in an auction, or from a private seller, then you may be making a costly mistake. Every week, we get the pleasure and delight of finding a number of our eBay items selling for more than we are asking on our website. A recent example...
Cheaper Off eBay?
About a month before writing this page, we bought in a number of krugerrand proof sets from another dealer. We decided a fair price for them was £650 each, and listed them on this website at that price. If we had got only one set, that would have been all, but because we had a fair surplus of them, we decided to offer them on eBay also. It cost us about £20 in selling costs to sell a £650 item on eBay, and a £2 listing fee if it does not sell. The first set we decided to start at £0.99 for two reasons, first to minimise the listing costs, secondly to allow us to gauge the level of interest. It received 16 bids from eight different people. The first twelve bids were all below the scrap gold price (we had shown this in our description). In a ten day auction, after one day, it had reached about £435, and it stayed at this price for another six days. Despite having an excess stock, we would have been delighted to pay considerably more than this ourselves for any quantity. Then it moved up further to about £560, at which we were still losing money. Two days later it was still at the same price and were beginning to think that we had made a mistake with the £0.99 starting price. With about half an hour to spare, the price jumped to £670, getting us what we wanted in the first place after taking eBay's fees into account. We relisted the item at a starting price of £650, in the knowledge that at least one other person was prepared to pay this, and it sold for £670 again. At the third relisting we got £701! Perhaps we are offering these too cheaply on our website! One of the things which surprised us was that the first sale was to a dealer who could have phoned us direct and got a (small) trade discount off our £650. We wonder who he is selling to, and for how much? He is obviously making enough profit not to bother worrying about how much he paid for it!
You may think this is an isolated example, but it is far from it, every single week, and most days, at least one item sells on eBay for more than through our website. We could have cited a 2002 proof sovereign, £195 on our website, which received eighteen bids on eBay and sold for £265.99!
Don't Ask the Seller to Cheat eBay!
One repercussion from this is that some people research the going price only after they have won the auction, and then come and ask us can we cancel the eBay auction and they will buy the item directly from us. We are always reluctant to do this, first they have made a legally binding agreement with us to buy the item, they would presumably be livid if we decided we had changed our mind, secondly, they are asking us to contravene eBay's rules. We even had one guy get nasty on the telephone because we were not prepared to cheat eBay out of their commissions, even though he was trying to bribe us by offering the buy a number of extra items from us. We are long established dealers with our reputation to protect, even though eBay are so impersonal they will probably never realise, and never give us any credit or recognition for it.
Before you bid, do your homework and find out the going market price, then decide you much you want to pay. Try a search on Google, the only good search engine. We suggest you could use the title of the item you are thinking of bidding on as a search term. Check with a local dealer, and perhaps contact the seller direct.
Know Your Seller
Look at the description. We are always influenced by poor spellings, and badly written descriptions. Perhaps rather snobbishly, we think if the seller is illiterate, perhaps the item is stolen or at least wrongly described. If the seller can't be bothered to use a spell checker, then what other corners will he cut? Does he give his contact details, or has he chosen to remain anonymous. A seller may have perfectly good reasons to conceal his true identity and address, he may want to avoid being burgled or robbed for example, but we would have far more confidence buying from a seller who is not afraid to advertise his identity, address, and generally make contact easy. Check out the sellers "shop" page or "about me" page. He may list his own website on his "about me" page.
Take note of his suggested or preferred contact method. Many eBay sellers are part time dealers, and prefer enquiries by e-mail or at weekends, other including us much prefer potential buyers to contact us by telephone during our normal opening hours. It's more personal, more direct, more interactive, and we can give you all the information you need much more quickly than just answering the question you asked by e-mail.
Check out the sellers eBay feedback rating, but do watch out for fake feedbacks, some conmen set up 50 different eBay accounts and buy 50 items from themselves for 1¢ each, and so acquire a feedback rating of 50 before listing a very expensive item.
Look how long the seller has been registered, but again some conmen plan well ahead, and set up multiple identities well in advance, knowing that they will abandon each as they get rumbled. EBay's vetting procedures are almost none-existent, and quite pathetic, bumbling would be a good description. Ebay main concern appears to be to protect eBay's fees, rather than any buyers.
If there is any negative feedback, take a look why. We ourselves have only got a 98.0% positive feedback rating, which we find quite frustrating. Repeat positives don't count. As we wrote this our feedback statistics said:-
|Members who left a positive||1445|
|Members who left a negative||29|
|All positive feedback received||2844|
How does your seller accept payment? Does this include PayPal? If so, do you know that eBay own PayPal, which is why they push it down everybody's throats. As a seller, there is no way to remove the "Pay Now Via PayPal" option which eBay show on every successful auction, even if the seller does not take PayPal. EBay charge the seller between 2.9 and 4.9% commission to use PayPal, they may charge the buyer also, we don't know, but we believe there are other transaction charges also, probably extortionate foreign exchange costs, we have seen some traders claim that PayPal can cost up to 10% of the transaction amount. It your seller accepts PayPal or credit cards, are you paying too much? If you are buying gold as an investment, why volunteer to pay over the odds to move your money?
If you are buying a coin where condition matters, can you trust the seller to describe the coins accurately? About the time we started selling on eBay, we had been supplying gold sovereigns to a small dealer who was reselling them on eBay. He always wanted the cheapest coins, hardly bothering about their condition. We noticed that the week after we sold him an almost VF rare date sovereign, he was offering an EF one on eBay. Of course, we can guess he was simply reselling our coins but exaggerating the grading by at least one grade. Presumably, most of the time his buyers were so ignorant or inexperienced that they did not know the difference. Over half the coins we see offered on eBay are wrongly described, overgraded, or both.
Can you be sure that the coins you are buying on eBay are genuine. There are many fake gold coins about, both forgeries and counterfeits. Does your seller know the difference, or care? Do you? Could you get your money back if the coins you received were fakes? Has the seller got any experience, reputation, and is he likely to be around in a few years time?
How do you know that the seller owns the coins, and that they are not stolen?
Are the coins properly described? Over half the eBay listings we see are inaccurately described. One typical get-out is for the buyer to claim he knows nothing about coins, he is not an expert. OK, this may be true, but it may be an advance excuse. One quick example here might be interesting. When we first started offering Maria Theresa silver thalers on eBay, we noticed one auction in which a someone, and there was a rather confusing suggestion that they were a charity) purported to have had a coin collection checked by an expert. They were offering a Maria Theresa as though it was minted in 1780, whereas all are restrikes (not fakes). Theirs sold for £16 owing to their fraudulent description. We describe ours accurately and honestly, and they usually sell between £5 and £10. On our first listings, we put a link to their finished auction, and they eventually noticed and complained to eBay. EBay asked us to remove the link, but took no action against the fraudulent seller! It seems to us that eBay don't want the general public to learn just how many crooks, fraudsters and conmen sell on eBay. This is a shame as it makes it harder for honest traders to compete on a lever playing field, and we suffer the distrust they cause.
Bid Once - Bid Early
Assuming you have decided to bid on something whether it's a gold coin or something completely different, decide how much you want to pay, submit this bid amount, then leave the auction alone until it closes.
Add a Few Pence or Pounds
Instead of bidding £50, bid £50.01, or maybe £50.12, you will be surprised how often this will make a difference. As sellers, we get to see all the bids at the close of each auction, except the maximum limit of the highest bid, although sometimes we can work this out. In a large proportion of our auctions, we see the underbidder fail to buy because he failed to add a few cents. We often see a bidder place a bid of say £100, get outbid by another bidder at £100.01, and then put in another bid at £102.01; sometimes omitting to add one penny ends up costing £50 or more.
Many, many eBay buyers believe that sniping - lurking around watching, then bidding with 3 seconds to spare works. Sometimes it does, but only because the losing bidder has failed to bid his limit in the first place, and prefers to creep the bidding up by the smallest possible step each time. Sniping can fail because sellers sometimes decide to cancel their auction because it has not reached a high enough amount. Yes, we know now that it's against eBay's listing rules, but most causal sellers don't know or don't care, and cancel anyway.
There are web sites and pages giving advice about how to snipe, and even sites which offer to provide the service for you, or software for sniping. Naturally they are going to tell you the advantages of using their method or product, and to the naive it does often appear to work, but take our word for it , much of the time sniping is a silly, and losers, game.
Sniping sometime does work, and there are two reasons for this. Firstly, if you submit the highest bid, you are going to win the auction whether you enter your bid first or last. If it gets you a bargain because you didn't leave the underbidder enough time to revise his bid, it is because he is so stupid that he does not understand he eBay's proxy bidding system works. EBay spell it out at every opportunity, so it's hard to avoid learning about it, it's just that some people expend more energy avoiding learning, and why break the habit of a lifetime?
At the risk of doing eBay's work for them, we will try to give a brief explanation. Let's say the starting price for an item is £0.01, and you think £100 is a fair price. Place a bid for £100.02 or £101.01 as soon as possible. If yours is the only bid, it will register as being for the stated starting price, in this case £0.01. If by the end of the auction, yours is still the only bid, you will have won the item for one penny! It's more likely that there will be other bids, but as long as yours is the highest bid, that is nobody bids more than your limit you will still win the auction. Let's say the second-highest bid is £50, eBay's proxy bidding system will increase its bid on your behalf to £51, that is £1 more than the other bid. EBay's bid increments increase in steps, from 5 pence at under £1, to £100 when over £3,000.
Now for the other really clever reason to bid early, is that if someone else decides to bid exactly the same amount as you have, you will win, because your bid was entered first. To outbid you, somebody else will have to pay more, £2 more at £100 plus, but conversely, if the auction price is still showing at £0.01, because yours was the only bid, and a smart person comes along and bids £100.02, he may win although he has only beaten your £100.01 bid by a measly penny, that's why it's important to add a few pence to your limit, and much smarter than trying to snipe.
Strangely, we once had a buyer who repeatedly bid £64.99. You would think he was trying not to win, but we assume he was placing his bids in euros, and the exchange rate was responsible for the weird bid amounts. He should have looked at the sterling conversion and adding two or three euro cents to each bid. He would actually have saved many pounds over a period of time, and also created himself less work bidding and losing on the same items week after week.
Most traditional auction houses offer a similar proxy bidding system, and undertake to bid on your behalf, as cheaply as possible, subject to their bid increment rules, up to your stated limit. We once read an ill-informed article by a Guardian journalist state that the proxy bidding system was a difference between eBay and traditional auctions, poor misinformed hack, well, maybe not so poor, he was getting paid for writing such inaccurate dribble, perhaps we should have said poor misinformed Guardian readers! Actually it was not the only error in his advice...
Don't Ask Stupid Questions - Not By E-Mail Anyway
In the same Guardian article, on the Guardian Online page, where the Guardian pretend to give expert advice about using the internet and e-mails, the journo advised the readers to ask a stupid question by e-mail!
It drives us absolutely crazy when people ask stupid questions. Now, we are a long-established company with a fair turnover, over £5 million per annum. We have been selling coins mail order for over 40 years. One of the principles we try to observe is making our descriptions, trading terms, postage. etc., as idiot-proof as possible (K.I.S.S.). Just imagine, we have spent 40 years honing the art of giving clear accurate, simple information. It's bad enough when people are too lazy or too stupid to read what we have taken the time and trouble to write. Most of our replies start with "As it states..." We try to be efficient, and we also keep busy. We also ask people to telephone us with queries rather than e-mail, we can talk about 5 to 10 times quicker than we can type, and the telephone is also more interactive. Sometimes we don't get time to answer all our e-mails in time, some get lost or spam-filtered, quite often the e-mailer duplicates his enquiry by telephone, making us do the work twice. If that were not enough, some dumb-assed journalist advises his readers to send a stupid question by e-mail, to test whether the seller is genuine. Our theory is that genuine buyers will get fed up answering stupid questions, but crooks will have plenty of time to give the "right" answers, the answer he knows the buyer wants to hear. We did consider e-mailing the journalist or the Guardian to tell them the error of their ways, can you guess why we didn't? That's right, the journalist did not list his e-mail address, and neither was there an e-mail address for the Guardian Online section either, and this is for the online web connected section of the paper. The journalist who advises his readers to plague genuine eBay sellers with stupid e-mails does not have an e-mail address, or if he does have one, he is not stupid enough to divulge it in case anyone writes to correct him, or God forbid, asks him a stupid time-consuming question. The Guardian Online doesn't have an e-mail address either or else it chooses not to make it public, precisely because it doesn't want to encourage stupid questions from its readers, but what advice does it give the same readers? e-mail every potential eBay supplier! Our suggestion for Guardian readers is to cancel their order or subscription, and switch to the Daily Telegraph instead.
Auctions versus Dealers
We note that auction prices were cited. It is strange that many people automatically believe they will get a better price at auction, or that they will get a better buy at auction. While we would not argue with the theory behind auctions, that they find open market prices, we believe many people would get better deals selling or buying through a dealer.
Auction houses, like all other businesses face competition, and have seen expenses increase considerably in recent years. Auction houses have to spend money on producing catalogues and in advertising, otherwise they would attract no sellers and no buyers. Most auction houses now charge about 15% to 20% commission to the seller, and most charge 10% to 15% buyers premium also. There is VAT to pay on both lots of charges, which cannot usually be reclaimed. this means that the "spread" between prices the seller realises and the buyer pays can be between 23.5% (unusually low) and 41.12% (rather high), with most at about 30%. As an example, we recently purchased multiple lots in a coin auction. We paid about £95 each for the items, the vendor got about £70 each. If the vendor had approached us directly we would have been delighted to pay between £80 to £85 each, and he would have got paid immediately.
If you want to find the value of a coin you own, please take a look at our page I've Found An Old Coin, What's It Worth?
|...at the Lowest Possible Price|
32 - 36 Harrowside, Blackpool, Lancashire, FY4 1RJ, England.|
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The URL for our main page is: https://24carat.co.uk