Collectors turn their hobbies into businesses

There's a box of coins of labeled “15 cents” sitting on the counter of CR Collectibles, a corner storefront at 529 Fifth Avenue SE in downtown Cedar Rapids.

The coins - from all over the world, made of various metals, imprinted with a wide range of dates, some with in odd shapes or with holes in the middle - are a draw for children brought in by coin-collecting parents.

It's an inexpensive way for children to become interested in coins and possibly become lifelong collectors. And collectors can become lifelong customers.

Shop owner Dave Vaughn was a young coin collector - a numismatist - who turned his hobby into a business. And coin collecting is possibly the most popular hobby because everybody in the world uses coins, Vaughn said.

The shop has been at its current location for about 12 years, but Vaughn has been in the coin business since 1975.

“Hobbies turn into a livelihood if you have longevity,” Vaughn said. “Basically you learn by doing. It's just experience.”

To go into business as a coin dealer, all one needs is an Iowa state tax certificate and a state doing-business-as registration.

His shop is where he buys, sells and trades coins and stamps as well as sells comic books and graphic novels.

The key to staying in business is, and always has been, low overhead, Vaughn said - he has never had an employee and he owns the building. He operated his shop at a mall for about eight years, and although foot traffic provided some advantage, the overhead was too high.

In his current location, he doesn't rely on walk-in traffic but, rather, regulars and true collectors.

“It's a destination business. Wherever you move, people will follow you,” Vaughn said.

The proof is in the steady stream of customers throughout the day. Some spend most of their time chatting with Vaughn at the counter while others walk in, flip through boxes of books for 15 minutes, then nod to Vaughn on their way out.

Other than on-the-job training, Vaughn became certified through the American Numismatic Association. Through its conventions, newsletters and website money.org, the ANA provides information about coins, coin clubs and coin shows to hobbyists and dealers.

Framed certificates for various ANA courses, including obsolete currency and detection of counterfeit U.S. paper money, line one wall of BE's Coins-Hiawatha Coin. Brian Fanton's shop has been at 85 N. Center Point Road, across the street from the Hiawatha Police Department, since 1998.

Fanton has been an instructor at the ANA's Summer Seminar since 1995, was named a Numismatic Scholar in 2005 and in July was awarded a rare Doctor of Numismatics degree.

He began collecting at 7, when he received an 1857-S quarter dollar and a copy of “A Guide Book of U.S. Coins” - known as the Red Book - from his grandfather, who was a collector.

A coin club member, Myron Hittenmiller, now of Dyersville, took Fanton under his wing. Hittenmiller suggested Fanton help him at coin shows and in 1969 urged Fanton to get started in the business. As Fanton worked as an electronic equipment installer for phone companies, he also was a coin dealer, which enabled him to learn more about his hobby, support his own collection and earn a little extra cash flow.

For many years, those he dealt with were collectors coming into the shop to fill their want lists of very specific coins.

“It's like looking for a new treasure every week,” Fanton said.

Coin collecting can be a bit like gambling, he added. It's not uncommon for someone to walk in with a coin and have no idea what it's worth. Earlier this year a man brought in a 1937-D Buffalo nickel that he inherited from his grandfather.

Fanton showed the man that it was a fairly rare three-legged Buffalo, explained that it was in good condition and informed him that it had a value of about $1,000.

“His mouth fell down a little bit,” he said.

Fanton deals in all United States and worldwide coins and currency, and bullion on consignment only. Others, as with coin dealer Craig Betzer of Atkins, deal mostly in bullion.

Gold coins have both intrinsic value, which is the value of the metal, and numismatic value, the value of the coin, Betzer said. Gold buyers typically pay only a percentage of the intrinsic value based on current precious metal prices but nothing for the numismatic value, he said.

Rather than operate a walk-in retail coin shop, Betzer travels to shows and stores. He has had shops but currently deals with clients by appointment and through advertisements. He's been very busy since gold and silver skyrocketed, however, and plans to work in a retail setting again soon, likely in Des Moines.

“It takes so much more money to get into this business. A couple of years ago, you could open a business on a shoestring. Now you'd better have a couple thousand dollars,” Betzer said.

He's been a collector since he was 13 and had been a professional dealer in coins and gold for more than 20 years. Coins are one of the few collectibles that don't lose value, and Betzer is optimistic that the numismatic value of coins will recover as the economy does.

People will often sell “to the first person that comes along with money in their hand,” Betzer said. “Price around. That's my advice to people. Price around like you do for a car.”