Coin Market Value

     Though only recently introduced to numismatics, the term “fair market value” has actually been used in other businesses or markets for a while.  In terms of coin collecting, however, it indicates the amount of money a professional dealer demands for a particular sample, and normally exceeds the wholesale price.  In order to be able to buy wholesale, as dealers do, you must want to know the coin market value and also be willing to take on similar risks, such as setting up your own business, dealing with the insurance and legal complications, and finding assistants, whom you will, of course, have to pay.

     Furthermore, many dealers have gone to a great deal of trouble to become well-versed in numismatics.  This is not surprising, as, from their point of view the field is not just a pastime, but a way to support themselves.  Even so, some collectors are far from being mere amateurs.  Their expertise may rival that of a good dealer. Furthermore, numismatics can be more than just business, whether you are a dealer or a collector.  People on both ends of the deal may develop a genuine devotion to this field.  When you work with a dealer, evaluate the market and competition, as well as his or her attitude, resources and reputation so you can decide whether dealing with him or her will benefit you. You must also consider the coin market value.

     In fact, competition is one of the ways in which to ascertain which dealers are the best.  In order for competition to occur, there have to be many dealers, and in order for enough dealers to survive, they must be able to make a sufficient profit from their sales.  Therefore, allowing the dealers their profit by paying fair coin market value is good for collectors, as well.  Otherwise, a monopolistic or oligopolistic system may arise, and the few powerful dealers remaining will have too much leeway to dictate their own prices.

Questions regarding coin market value:

     Now, you may ask how one arrives at an amount which is called a fair market value.  Simply, this is what dealers charge after they have marked up the wholesale coin market value.  Of course, this begs two questions.  Firstly, how does one arrive at a wholesale price, and secondly, how does one decide how much to mark up a coin?  The answer to the first question is research.  Any competent, fair information source on coin market value will have done research in order to find the lowest possible wholesale coin market value.  The markup, however, depends on how rare the coin is.  The more samples there are of a specific coin of a particular grade, the more rivalry exists between the dealers that sell and carry that coin.  Therefore, they will be competing with each other to see who can offer the lowest and most attractive price.  Conversely, the scarcer the coin, the higher the dealer’s profit margin.  It is only fair. 

     Coin collecting is an ancient activity that has been around for thousands of years.  Many processes and attitudes have changed over the years, but one aspect of numismatics that has remained constant is the enthusiasm that both dealers and clients have for evaluating coins first-hand and checking coin market value.  This attitude is one that has been observed by experts who have been in the coin collecting business for many years, and have been able to observe it from several points of view as they moved through the ranks.  However, this state of affairs was complicated in the 1980’s with the rise of the so-called encapsulated coin, which is basically a coin that has been sealed in plastic.  As you might imagine, such coins are difficult to see and inspect first-hand.  Therefore, the market attempted to work with and around these coins by transitioning into a stock market-like mode of operation.  This way, people were supposed to be able to purchase coins without ripping them out of their sheaths and inspecting them.  However, the very nature of coin-collecting is not conducive to such a transformation.  If coins could be bought and sold like stock shares, their uniqueness would be separated from their value.  The individuality and uniqueness of each coin would have no meaning.  However, this very uniqueness is at the heart of numismatics, and, truly, at the root of most serious types of collecting.  If coins are no longer regarded as unique and concrete, and instead treated as abstract, interchangeable stock shares, what is the point of collecting them?  One would be buying the idea of a coin, not the thing itself. 

     This is why the many thousands of numismatists around the world still prefer to look at coins themselves.  A dealer will only be willing to pay a good price for a coin if he likes its appearance, and the dealer’s hypothetical buyer would only be willing to pay a fair market value on a coin that looks pleasing and valuable to him or her.  If people were not willing to pay these prices, than the listed wholesale and retail prices of coins would have to be lowered in order to make a sale.  Therefore, the fair price value attached to a coin by a trusted authority can give a good indication of its value, and even convince people that a particular coin is worth a look, especially if they had suspicions or second thoughts about it. 

     Still, one must be very careful when viewing information about very rare coins, such as those that are one-of-a-kind.  In such cases, many dealers simply charge the price they want, since there is little competition.  You are advised to look at other similar coins, to see if the price you are being charged is worth it.  If not, you might want to buy something else.     The owner of this site has done a great deal of research in order to post the information here.  However, site users must remember that the coins and prices posted here are not guaranteed to be of the best value available.  Serious coin collectors should still do some of their own research.  Remember that a well-informed clientele keeps dealers competitive, and competition helps to lower prices.  The information on this site is well-researched, and is easily available to you.  Even so, it would benefit you to do some other reading, in order to take the best advantage of the dealers and services available to you as a coin collector.