Coin dealers follow market shift

You might be forgiven for thinking that coin dealers are a thing of past. Many local coin shop owners have been in business for many years, in fact.

But just because local coin dealers and their shops have been around for decades doesn't mean their business has stayed the same. For one thing, they don't only work with rare, old coins anymore.

Most local coin dealers said the industry has moved over the years from people having an interest in collecting coins to developing more of an investment approach - people looking to make money from buying and selling coins and other metals.

Ron Pettit, owner of Ron's Coins in downtown Cedar Rapids, started his business in 1980 and has definitely seen this shift.

'When I started out, there were kids coming in buying coins to fill out their blue books,” said Pettit, who himself started collecting coins at the age of seven. 'More and more we are moving toward investment buying or selling.”

Brian E. Fanton, owner of B.E. Coins in Hiawatha said most people coming in the store these days want to buy or sell bars of gold and silver.

'But you can't be in this to make a quick buck,” said Fanton, who has been a coin dealer since 1969. 'You have to be in it for the long haul,” noting that the industry typically goes in a 10-year cycle regarding the prices of metals.

While the industry has moved to more of an investment approach, the process of buying and selling remains consistent.

'We try to stock what people are looking for, and we pay top price for items brought to us,” Pettit said. 'When we buy items, we pay based on the metals market and a percentage of the retail price on collector coins.

'Our markups are very little as we are more focused on volume of sales.”

The markets

The influence of the metals and stock markets is a huge factor controlling the industry. The price of gold, for example, has a great effect on the pace of business.

'The metal market has been flat for about a year now,” Fanton said. 'This is our biggest time because everyone is buying.”

He said gold, for example, is around $35 an ounce currently, whereas five years ago it was about $19 per ounce.

'The market has also taken a big dip, so many people are buying now. It's hard to keep items in stock,” Pettit agreed.

'It's an ever-changing industry,” Fanton added. 'It depends on the economy, the world situation, the government and home and gas prices.”

Keeping up with the changing market is something that Fanton said he and other coin dealers need to follow throughout the day.

'The prices of metals are worldwide now,” he said. 'I can look in New York in the morning, London midday and at Hong Kong at night. Of course it is a lot easier now with the technology we have.

'But there's a lot of speculation in this business,” he said. 'It's a roller-coaster ride, so I just hang on as best I can.”

While most coin shops operate with just one or two employees, B.E. Coins has contracted out employees to make sure they offer a breadth of knowledge, especially when offering appraisals.

At Ron's Coins, Pettit transitioned from having a traditional retail shop, which he operated for about 20 years, to working in a smaller location and meeting with customers by appointment only.

'In a retail setting, people can walk in and buy something at the counter, but then everyone in the store can see what you purchased and what you are leaving with,” Pettit said.