During the week before this article was originally published, a gentleman came into the Atlanta Gold & Coin office trying to locate a SunTrust Bank ATM. Looking at his smartphone, he explained that the online address listed for SunTrust Bank was the office address. The response was a joking observation that “not everything online is true.” That encounter brought to mind the phone inquiries Atlanta Gold & Coin received at the time of publication from prospective customers who had found inaccurate information online, or who assumed that the value of one coin type established the value of every similar coin. Numismatics has many details that need consideration before a rare coin can be valued correctly. This archived article examines retail, market, and wholesale prices, addresses common misunderstandings about perceived rare-coin values, and outlines the four factors used to determine value. It also provides resources related to coin grading.
Retail Prices
When this article was originally published, people interested in selling rare coins often consulted Cointrackers and “A Guide Book of United States Coins: The Official Redbook;” commonly known as “The Redbook.” Cointrackers was an online source offering estimated retail values for many coin types. The original article explained that its listed amounts were usually well above market levels and did not accurately show the market value of most coins at that time. Atlanta Gold & Coin would have been pleased to sell coins for the amounts shown there, but the article stated that market value was generally about 80% or less of those posted figures. Cointrackers was not to be dismissed entirely, because it could help identify coins that might deserve further attention. At publication, the home page of our website included a comparable resource, titled “Rare Coin Guide” for people identifying lower-mintage coins and coins that could be more valuable. The Redbook could likewise help identify lower-mintage coins that commonly carried premiums, though the original article noted two limitations. It represented a moment in time and was generally published 6 – 9 months before the year printed on its cover. As a result, by the end of the stated year, the guide could be 18 – 21 months old. Rare-coin prices could move weekly, so the article advised monitoring the market. It also explained that most collectors did not pay retail, instead paying market value, which was usually much lower. These sources could help identify better-date and key-date coins that might command premiums, but the article cautioned readers at publication not to use them alone to estimate what they should expect for rare coins.
Market Prices
Unlike retail figures, market prices were described in this originally published article as the amounts most collectors paid when they purchased coins from dealers. At the time of publication, those values could be researched through completed auction results on eBay, Heritage Auctions, and Stacks & Bowers, among other sources. The “greysheet” from Coin Dealer Newsletter (CDN) was also widely used, although the article cautioned that not every published figure was accurate. Its example at that time was the 2008 proof quarter set, listed at more than the complete 2008 proof set. Maintaining fully accurate data across thousands of coins was impossible, though CDN was said to do an adequate job overall. Despite a common belief, the article explained that most dealers did not pay greysheet prices. Collectors had increasingly used the greysheet to decide what to pay for rare coins, making it more of a market-price reference than a wholesale guide. In dealer-to-dealer networks at publication, dealers who occasionally offered greysheet “bid” prices were quickly flooded with coins from other dealers. Dealers instead paid what the article called wholesale prices, discussed in the following section.
Wholesale Prices
As noted earlier in this archived article, dealers paid wholesale amounts when acquiring rare coins from other dealers and collectors. To operate profitably, a dealer needed to purchase at wholesale levels and sell at market levels. The article had already explained that dealers only rarely received published retail amounts when selling rare coins. Dealers used somewhat different methods to establish wholesale rates, which was why the article encouraged people at publication to investigate reputable dealers that could plainly explain their reasoning. In general, a dealer would pay a percentage of recent auction results or greysheet figures. Wholesale amounts were typically 70% – 90% of those figures, but, as previously discussed, published greysheet amounts were not always accurate, so an actual offer could differ. Another resource available at the time was “A Handbook of United States Coins: The Official Blue Book.” Its figures were wholesale prices, but it shared the same limitation as the “Red Book,” because it captured only a particular moment and could have been nearly two years out of date. The article said this resource could help identify coins that might be more valuable, while warning that it might or might not reflect accurate values when someone was ready to sell. Having distinguished retail, market, and wholesale values, the original article then moved to the four factors that establish a coin’s value and a closer discussion of grading.
How Coin Values are Derived
This original article identified four main elements in a coin’s value: its age, where it was made, its mintage, and its condition. For example, almost any U.S. or colonial coin produced in the 18th century was likely to be fairly valuable simply because of age. The production location also mattered. Some of the more valuable Morgan silver dollars came from the Carson City Mint. Although that mint struck more than one million coins in certain cases, every Carson City Morgan silver dollar sold at a premium according to the article. More significant than the mint location was the total quantity produced. As a broad guideline, coins with mintages of one million or less generally sold for more than common-date examples. Certain mints made limited quantities in particular years. The article gave the example that the Philadelphia Mint produced only 12,000 Morgan silver dollars in 1895, and all were proof coins. Many remained unaccounted for, helping support their price. At publication, finding an 1895-P Morgan silver dollar for less than $20,000 would have been difficult. The article explained that a coin’s mint of origin could be determined by looking for its mint mark. With the exception of Philadelphia, mints placed a letter or letters on a coin to show where it was struck. Common marks included “D,” “S,” “O,” and “CC,” indicating the Denver, San Francisco, New Orleans, and Carson City Mints. A mark might appear on either side, so the original article advised a thorough inspection. If none could be found, it said it was safe to assume Philadelphia production. Finally, condition was described as a primary value factor. Because condition mattered so much, the article devoted the next section to coin grading.
How to Identify Your Coin’s Grade
When this article was originally published, Atlanta Gold & Coin had spoken earlier that week with a prospective customer who possessed an 1844 Seated Liberty dime. She asked for a telephone quote, though assigning one without examining the coin in person was difficult. After requesting an answer, she was told that a low-grade example was likely worth at least $200. Before the call ended, she said the coin was worth $15,000, based on a price she had seen online. Although she may indeed have owned an 1844 Seated Liberty dime, she had assumed that the highest online price she found applied to her particular coin.
Condition, especially for a rare coin, is a central consideration in establishing value. Coins use a 70-point grading scale. A “1” indicates a coin in poor condition, whereas a “70” represents a perfect score. Put another way, a coin graded “70” shows no apparent imperfections under 10x magnification. When the article was originally published, readers wanting to understand grading further were invited to become familiar with the 70 point Sheldon Grading Scale. The scale was created by Dr. William Sheldon in 1949 and became the industry standard.
A coin’s grade and value can also be affected by rim problems, surface damage, or other alterations from its original state. For instance, a cleaned coin generally sold at a discount, sometimes a substantial one, compared with an example that had not been cleaned. Over the years, third-party grading companies helped reduce much of the subjectivity involved in coin grading. In addition to assigning a grade, these firms authenticate coins and note qualifiers when a coin has been changed from its original condition. PCGS and NGC were identified in the industry as the two leading U.S. third-party grading companies. ANACS and ICG were described as second-tier firms. Grades from most other third-party grading companies were generally considered unreliable and called for a careful examination to establish the appropriate grade.
Conclusion
In summary, the original article covered the distinction among retail, market, and wholesale coin prices. Published retail figures were seldom achieved; instead, most coins sold at market levels. To earn a profit, a coin dealer needed to buy rare coins below market prices, known as wholesale prices. There was no exact formula for setting a fair wholesale price for coins, but when this article was originally published, a practical guideline was 70% – 90% of then-current greysheet prices or auction results recently completed at that time, depending on marketplace demand for the particular coin. The Blue Book was also presented as a useful resource, although, as noted above, it had limitations. The article also addressed the four factors affecting rare-coin value, coin grading, the effect of grades on value, and certified or professionally graded coins. At publication, readers were invited to contact Atlanta Gold & Coin for further assistance if needed.
