Americans like deals--especially good ones--and that includes Americans who buy and sell rare coins. The pride we feel in acquiring a desirable, valuable coin is heightened when we get that coin through what we deem to be a "good deal."
Many of the people in this group come to me to negotiate the very best deal I can for them.
My coin-related activities are multi-faceted: I've written books, given lectures, been a guest and a host on video and radio talk shows and, of course, served as president of Scott Travers Rare Coin Galleries in New York. My primary skill, however, is that of a deal-maker. But I don't just put together deals--I put together GREAT deals, where everyone comes out a winner.
Deal-making involves more than just negotiating; it's also a matter of structuring a deal so that both sides come out feeling they've won.
For the most part, the people you deal with in the coin field are people you see--and deal with--again and again and again. For that reason, it's especially important to always deal fairly and squarely.
If you were to sell somebody coins and not deliver what you promised, he or she would quickly catch on and stop doing business with you. Conversely, if you bought coins and gave the seller a bad check, or did something else that wasn't reputable, that seller would size you up as a bad risk and you wouldn't be able to make any further deals.
The coin industry is basically a business of putting together deals and seeing them through. With that in mind, I've drawn up a list of 10 TIPS on how to put together the best possible deals. This list is based upon the section on "How to Negotiate With a Coin Dealer" from the newly published third edition of my bestselling book "The Coin Collector's Survival Manual" (Bonus Books, $13.95).
TIP NO. 1: Know the value. As I've written frequently in other COINage articles and said again and again at my seminars, the basis for putting together a deal is to know exactly what you have to sell or what you're going to buy. You need to know the value of things you buy or sell; you need to know the marketplace.
I could recommend that you always try to pay 50 percent of someone's asking price--but that advice would be meaningless if you didn't know the value of the item being sold. Let's say someone was offering you a coin for $1,000 and it really was worth just $200. If you were to pay 50 percent of the asking price, or $500, that would still be a very bad deal for you. So you need to know the value.
TIP NO. 2: Be non-emotional. You should always try to maintain a poker face; always deal from strength. As soon as the person you're dealing with smells blood ... as soon as that person thinks you're desperate ... you will get squeezed.
Even if you really do need something and you really do want to complete the deal, it's important to remain as composed and non-emotional as you can and at least appear uninvolved. When you APPEAR uninvolved, you will usually BE uninvolved, and that will help you cut a better deal.
TIP NO. 3: Never bluff and never lie. Contrary to what you may have read in textbooks on deal- making, one of the most important things to keep in mind when you're negotiating is not to lie.
Don't make an offer you're not prepared to keep, or issue an ultimatum you're not prepared to back up. It isn't wise to tell someone, "If you don't give me this coin for $500, I'm going to walk away from the table. This is my offer and my only offer--take it or leave it." If the dealer you're negotiating with, or making the deal with, then says, "OK, I'll leave it," you've painted yourself into a corner: You can't very well come back later and tell that dealer, "OK, I'll take it at your price, $600." If you do, you're going to look very foolish.
Similarly, if a dealer makes an offer to buy one of YOUR coins, don't mess with the truth. If he offers you $2,000 for that coin, don't tell him, "No, the dealer across the street offered me $2,500 for it"--unless, of course, the dealer across the street DID offer $2,500. If the second dealer finds out that the guy across the street DIDN'T offer $2,500, you're going to look pretty ridiculous--and you're probably going to jeopardize your future business relationship with that dealer.
Bluffing or lying will only get you into trouble. It will ruin your credibility for future deals--and possibly even ruin your chance to make the deal at hand.
TIP NO. 4: Let the other party make an offer first. This advice applies whether someone's selling you coins or purchasing coins from you. Often, if dealers are looking to sell you coins, they'll ask for a lot less than you might have imagined. Conversely, if you're seeking to sell coins to them, they might very well offer much MORE than you imagined.
If, for some reason, you can't get the other party to make an offer first, and YOU have to make it instead, you should always start very low when making an offer to buy and always start very high when making an offer to sell. Give yourself room to negotiate. Who knows: Your low-ball buy offer ... or high-ball sell offer ... may end up being accepted!
TIP NO. 5: Don't make an offer of which you aren't certain, and don't withdraw your offer once you make it. If you have your eye on a coin that you really think should cost you $300, don't tell the dealer you'll pay $350. If the dealer then replies, "OK, you own it," you really have to buy it for that price. You can't say, "Well, I'm not exactly sure; can you hold onto this coin for a few weeks?" That kind of vacillation infuriates most dealers.
When you make your offer, be very, very certain of yourself and confident of yourself. Otherwise, do NOT make the offer.
I can't overemphasize the importance of being decisive when you make an offer to buy or sell coins. In TIP No. 6, I'll elaborate on this point.
TIP NO. 6: Count out the money or write out the check. Let's say a dealer has a coin for sale, or a deal for sale, and he wants $3,000 for it and you're willing to pay $2,500. He may be thinking of compromising with you-- splitting the difference. But if you take out your checkbook and write a check for $2,500, the price you want to pay, in many cases the dealer will just say, "OK, I'll take it."
Similarly, let's say on a smaller deal you want to buy a coin for $500 and the dealer is asking $600 and says he's completely inflexible--he will not budge from $600. If you take out five crisp $100 bills and flash them in front of his nose and say, "Here you go, do the deal, take $500," for the most part I've found that he'll take the 500 bucks--even if he says he won't take a penny under $600. The $500 will do the deal for you.
TIP NO. 7: Place yourself in the position of power. If you and another party are sitting down to negotiate a deal, try to get the elite position at the table. If you're trying to appear businesslike, wear a suit and tie. It's a matter of psychology: You need to do whatever you can to make yourself appear to be powerful and able to do the deal. At the same time, you must NOT appear vulnerable and NOT give the other party the sense of smelling blood. Do these things and you will come out ahead.
TIP NO. 8: Be flexible and change the structure of the deal, if necessary, to make it work. Keep your options open; be creative. For example, if a dealer is offering you a coin for $500 and is absolutely rigid--he won't take one penny under $500--and you're willing to pay only $400, maybe you can structure the deal another way. Maybe you can go through his inventory and find some gold coins you know you could sell anywhere for $700 apiece, and get one of those coins added to the deal for $600. That way, you can pay the dealer his price on the other coin and still end up being a winner yourself: The $100 you make on the gold coin will offset the extra $100 you pay for the other coin.
If you're negotiating with an auction company to sell some of your coins and the company won't agree to the commission rate you're seeking, perhaps you can arrange for other considerations that will compensate for this and enable you to consummate the deal anyway. You might, for example, induce the company to give your coins better placement in the auction catalog, or larger photographs--possibly in color--or higher grades. These things would cost the company little or nothing, but would be of great benefit to you.
You can also build in a bonus when changing the structure of a deal. You can, for example, negotiate the deal with 90-day payment terms and then perhaps call 30 days later and discuss immediate payment. Sometimes, if the dealer is in a cash crunch, he will be extremely flexible under such circumstances and lower the price a lot more than just what the interest rate would be for those extra 60 days.
TIP NO. 9: Convince the other guy that it's in his best interest to do the deal. This might be a little more difficult for you psychologically. You might actually have to be a friend of the dealer in order to pull it off. What you need to do is talk about market conditions, offer advice and use your wit and ingenuity to show the other party why he needs you--why you're the person he needs to do the deal with and nobody but you will be able to satisfy his deal-making needs.
TIP NO. 10: Don't take things personally. Don't get emotionally involved. Don't be angry if a dealer rejects your counteroffer. And try to have a good time while you're playing the game.
Remember, what you're doing IS a game. It may be real money that you're playing with--but, for the most part, you're only playing a game. Enjoy it; have a good time.
If you play the game well, you and the other party involved can BOTH emerge as winners.
And that's a good deal all around!
|Scott A. Travers ranks as one of the most influencial coin dealers in the world. His name is familiar to readers everywhere as the author of six bestselling books on coins: The Coin Collector's Survival Manual, The Insider's Guide to U.S. Coin Values (annual price guide), One-Minute Coin Expert, Travers' Rare Coin Investment Strategy, The Investor's Guide to Coin Trading and How to Make Money in Coins Right Now. Mr. Travers appears frequently on television and radio and has served as COINage magazine contributing editor since 1984. He invites Coin Universe visitors to read free excerpts from some of his books.