The Reeded Edge Looks toward Atlanta, GA and The ANA National Money Show

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cobb_galleriaIt has been a while for us since we have visited Atlanta, Georgia. For years, this was a regular stop on our coin show schedule. But with the dissolving of the Peach State Show and the relocation of the GNA show to Dalton, Atlanta has not been logistically possible for us to work into our already-busy schedule. You can imagine our excitement when we saw that the ANA scheduled their National Money Show at The Cobb Galleria in this prosperous north Atlanta suburb. We have very fond memories of this area, and for good reasons. The people have always been extremely friendly, epitomizing the definition of southern hospitality. Equally as important, Atlanta and surrounding areas are home to a broad nucleus of serious collectors, which usually equates to a recipe for success when it comes to a coin show. Both Rob and Robbie will be on-hand from February 27-29 at The Cobb Galleria representing The Reeded Edge at this important winter numismatic event. They will be located at booth #617 facing the front of the bourse hall. As usual, they will have their extensive array of certified U.S. coins, spanning copper to gold. The guys have been really active, both in the office and on the road, buying new properties for inventory. If you haven’t perused The Reeded Edge’s coins lately, you owe it to yourself to stop by our booth for a look-see. The Reeded Edge will also be aggressively buying throughout the show. Our open checkbook policy will be in full force. Whether you have a single higher-value coin for sale, or perhaps an entire collection, the guys will have both the motivation and resources on hand to make it happen. Please consider The Reeded Edge for ANYTHING of value that you have for sale-the guys hate saying no, and next week’s show will be no exception. For our dealer friends, we will also be attending the official show set-up, one day prior to opening to the general public. Atlanta is a vibrant southern city full of culture, sports, history, shopping and great eateries. We hope that it might be in your plans for next week. If so, please make a point of putting the Cobb Galleria on your schedule, as the guys would love to see you at the show.

The Reeded Edge Heads to St. Louis for The Greater American Coin Fair

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Airport HiltonRemember the old days of coin shows, and walking into an undersized room with dealers packed together like sardines? Navigating the crowded aisles was reminiscent of a rush hour traffic jam. Do you remember the feeling that that noisy room evoked? At that moment, the thought probably struck you like a bolt of lightning. This is a vibrant hobby and I am part of it! Unfortunately, as the business and hobby have both evolved into the technology era, that experience really has become a thing of the past. But, every now and then, and if for only one fleeting moment, circumstances allow for a deja vu return of that old days feeling. The personal aspect of buying coins face-to-face is not a dead concept, and the successful small coin show has not yet gone the way of the dinosaur, facts we are both reminded of once a year when we attend The Greater American Coin Fair in St. Louis, MO.  Conveniently located at the Hilton, directly across the street from St. Louis airport, this location provides the easy-in, easy-out that makes travel a breeze for the national dealer contingent. Most importantly, Mike Orlando (the show promoter) understands a few simple but important concepts. An undersized location with a crowd beats an empty, larger hall. Equally important, once a show location is established, don’t mess with it. Ironically, there is a newer and larger facility less than 10 miles north of the aging airport Hilton that features a really large convention center with free parking and easy interstate access. A second, unrelated St. Louis coin show is held there, with nowhere near the same results. Why does this show work year-in and year-out? There is no logical answer to this, as the mid-western weather can be a bit unpredictable in February, the undersized parking lot charges $10 a car, and the hotel itself is small and underwhelming. The Reeded Edge has always banked on the fact that this show is a winner, despite factors which should prove otherwise. Consequently,  Rob and Robbie make their annual pilgrimage to St. Louis for 3 days of brisk coin trading. The Reeded Edge will be located at their usual in-line booth, directly in the center of the main bourse room. They will have hundreds of great certified collector coins in tow, including new show and office purchases. In addition, the guys will be actively buying with their open checkbook policy in full force. Whether you have one high-value coin or an entire collection to sell, The Reeded Edge would love to be your go-to dealer. Please make a point of showing  anything numismatically worthwhile to the guys for their on-the-spot offer. Please note, as in prior years, we will be subletting Oklahoma Coin Exchange’s table. Although our booth will be branded with The Reeded Edge logo and signage, the show guide will list our location as “O.C.E.” Hopefully, Friday or Saturday will bring you to the St. Louis area for this always-active numismatic venue (or during set-up Thursday afternoon, if you are a dealer). Rob and Robbie would both love to see you at the show.

Vienna Active, But Not Like the Old Days

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The Vienna Coin and Stamp Show is a solid show with a decent following, but we remember the days when it was something much more than that. Vienna used to be one of the premier small shows in the country. It was marketed differently, with postcards sent out before each show to a vibrant customer mail list. It was attended differently with the isles packed with anxious collectors, to the degree that navigating the room was difficult if not downright impossible. The dealer contingent was represented by some of the most respected firms in the mid-Atlantic region. Suffice to say, all 3 of these components today fall short of the Vienna shows of the past. Perhaps, this is the evolution of the coin business and coin shows manifesting themselves in today’s marketplace. But with Vienna remaining one of the demographically top regions in the United States, we wonder if this show could be something more. After all, it was once. Despite present-day circumstances, Rob and Robbie returned from Vienna reporting a solid show. In the guys’ estimation, expectations are tempered to today’s climate, so Vienna seldom over or under performs. The Reeded Edge’s booth remained active for much of the show with buying and selling taking place throughout. Beyond that, there really is nothing to report-Vienna, in a nutshell, was as expected.

Next up for The Reeded Edge will be the always-active Annual Greater American Coin Fair at The St. Louis Airport Hilton. This show, taking place Feb 6-8, is an easy-in, easy-out affair, located literally right across the street from the St. Louis Airport. For this reason, it is very attractive for out of state dealers, and attracts a myriad of national rare coin firms. Actually, for its size and stature, this show may have the best dealer roster of any coin venue on the circuit. It is one of the true steady performers on the show circuit, and one that the guys put on their calendar religiously. If you have never attended this coin show, and circumstances find you in the St. Louis area, a stop at the Airport Hilton could be well worth your while.

FUN Rocks in 2020!

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orange-county-convention-center-arialThere is one constant on the coin show circuit. Irrespective of market conditions, The Florida United Numismatists (FUN) Coin Show will be both well attended and full of optimism. This year was once again no exception. We only wish that the dealer community would maintain this same level of enthusiasm throughout the year. We purposely did not mention collectors in that statement, and for good reason. They have been in the game for quite some time now, which makes figuring out the general lackluster mood of the wholesale sector of the coin market a real head-scratcher. It is always good seeing all of the market players, from the largest suppliers to the rank and file collector, on the same page. If only for the week, that’s exactly the mood that prevailed in Orlando. From Wednesday setup throughout the conclusion of business on Saturday afternoon, this was another FUN Show for the ages.  Although we couldn’t begin to guess the exact number of attendees, the numismatic bourse floor of The Orange County Convention Center remained packed with people for the duration. Given that there were well over 1000 dealers in attendance, this was no small feat. We never take for granted the amount of planning, work and manpower that it takes to pull off a show like this. Kudos to FUN!

The Reeded Edge was non-stop busy for the entire show. Rob, Robbie, Miguel and Rory were all-hands-on-deck with customers two-deep on both sides of the booth for much of the show. Running out of supplies like checks, ink for the printer, printer paper, invoices and price stickers are all indicators of serious activity. Both buying and selling were robust, which is another encouraging sign. Balance is one of the most important aspects of a stable market. In all, The Reeded Edge conducted over half a million dollars worth of numismatic business. Furthermore, a mix of everything was selling. Surveying the show cases on Saturday afternoon, holes were evident in every case from the early copper on the left side of the booth to gold coins on the right. There was no one emerging trend for us at FUN, other than the collector is king. From second-hand reports, the auctions sounded like a mixed bag with extraordinary coins selling at stratospheric prices and ordinary material predictably depressed. Since auctions play no role in The Reeded Edge’s business plan, this was not a component that impacted us either way.

Our takeaway from 2020 FUN was pretty much the same as every other year. The mood coming into the show was predictably optimistic, and the mood leaving, even more so. The next several months will be telltale in defining the true market direction. Our next show will be The Vienna Quarterly Coin and Stamp Show, before traveling to St. Louis and Atlanta in February. By then, all of us should have a better read on both the health and future of the 2020 coin market. For now, we will enjoy the results of FUN, and process the many hundreds of new coins that we purchased throughout the week, making them available to our customers for the first time. Stay tuned!

Happy New Year! 2020 Ushers in F.U.N.- Come See The Reeded Edge @ Booth #716

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fireworksIt seems like we just did this. It really is hard to believe that another year is behind us. Although for the record book, 2019 marked another year of declining prices in the rare coin market, the declines were not across-the-board, nor were they wide spread. Primarily the areas hit the hardest were the generic markets, proof type and modern coins. Other more resilient areas that garnered market support were silver dollars, classic commemoratives, early Federal coins, small cents, 20th century collector coins, key-date material and rare dated gold. A Cardinal Rule in 2019 was the coins that were languishing in many dealer’s case (whether at a show, shop or otherwise) were the same coins that did least well. Conversely, coins that nobody seemed to have, were the same coins that were on everybody’s want list. Coins with incredible eye appeal fetched equally incredible prices. Nobody will soon forget the 1938-S Mercury Dime that eclipsed $360,000. Here at The Reeded Edge, we sold a reverse toned 1923 Peace Dollar, PCGS MS-66 CAC for $6000 and an 1880-S Morgan Dollar, PCGS MS-65 CAC for $6500. Both coins exhibited absolutely incredible color and were one-in-a-million. The point is, that special coins found special homes at extraordinary prices, a good sign for the overall health of the market in deed! So maybe, selectivity was the word to best describe the 2019 coin market. One thing was for sure; this market was dominated by the collector. Those that catered to this demographic reported a good year, where others that simply traded coins wholesale had a tougher time. What then do we see in our crystal ball for 2020? Rob has been preaching to some of his customers that many coin prices appear to have bottomed out and the trend is beginning to reverse itself. We couldn’t agree more! Maybe this upcoming year really will mark an overdue turnaround for all sectors of the coin market. We do believe that if you have been delaying your numismatic purchases for one reason or another, now may be the time to act. The upcoming F.U.N. Show should either confirm or dispel this notion.

Speaking of F.U.N., The Reeded Edge will be set up for the duration of the show at Booth #716, front and center in the convention center. Just look for the BUYING, BUYING, BUYING sign prominently displayed at our space. In addition to Rob and Robbie, our friends Rory Shelby and Miguel Lopez will be assisting at the booth.  The Reeded Edge will have an extensive inventory of certified U.S. collector coins, including hundreds of brand new additions from a recently purchased collection. Make a point of visiting us early for the best selection. Of course, we will also be BUYING AGGRESSIVELY throughout the show. Whether you have one great item or an entire collection for sale, The Reeded Edge would love to be your go-to dealer. F.U.N. is always a great show filled with optimism and high expectations. For reasons stated earlier, we really believe that this year’s show may eclipse any F.U.N. show in recent memory-we shall see!

Finally, we want to extend a special thank you to each and every one of you that helped make 2019 a successful year for us at The Reeded Edge. Without your support and loyalty, we couldn’t have done it. We hope that the upcoming year brings peace, health and prosperity to you and yours. We also hope to see you next week in Florida, or at some other upcoming numismatic event in the very near future. Happy 2020!

Sales Tax on the Internet-The Impact Moving Forward

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Business is never without challenges. The latest we have been dealing with is the taxing of rare coins. South Dakota v. Wayfair was a landmark case decided by The Supreme Court, which in a nutshell, mandated that states may collect sales tax from out of state sellers. With this decision, on-line giants like Amazon and eBay started collecting sales tax on all purchases, irrespective of which state the buyer was a resident of. Gone were the days where buyers could avoid paying tax simply by dealing with an out-of-state vendor. But, is this really the case? That is truly the million dollar question, and for much of the answer, the jury is still out. Obviously sales tax is a very complex issue, as certain items are subject to it, where other items are exempt. So, where do rare coins fall in this picture? Many states do in fact have numismatic and/or bullion tax exemptions (Refer to tables below). Unfortunately, online behemoth eBay has been very slow responding to this reality. Most buyers are reporting being charged sales tax, even those that live in tax-free states. Apparently, eBay has taken the position that it is better to be too cautious than the alternative. For the time being, this is causing us a major headache (and yes, a drop in sales, as well). The question becomes how should one proceed until eBay gets this issue straight? The answer is two-fold: First, we believe that Wayfair will serve as the precedent for all out-of-state internet purchases, and exemptions currently in place will probably disappear over time. But, we also believe that those policies and the enforcement wings are not in place yet, so there still is a tax-free window for many out-of-state purchasers. For the time being, WE STRONGLY URGE OUR EBAY CUSTOMERS TO BUY FROM US DIRECTLY. WE ABSOLUTELY WILL NOT CHARGE SALES TAX TO ANY OUT-OF-STATE PURCHASERS, EXCEPT IN THE INSTANCES THAT WE ARE REQUIRED TO DO SO BY LAW. Again, we do believe at some point all vendors, ourselves included, will be required to collect sales tax; but, we are not there yet. We will certainly keep our customers apprised of any developments on this evolving issue.

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Successful Annandale Coin Show Concludes 2019 Show Schedule-Happy Holidays from The Reeded Edge!

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It has been a busy year, and despite challenging market conditions, a REALLY good one! The Annandale Coin Show ended the year much the same way that it started. The show was active throughout, although the retail traffic was admittedly off. That didn’t stop us from selling six figures worth of rare coins to a smaller, albeit enthusiastic, audience. This year has had its share of hits and misses. That somewhat characterized the coin market. In retrospect, this lead to a new sense of awareness which has transformed into a vital component of our business model. You have heard us stress, on multiple occasions, the importance of keeping inventory moving. At no time in the history of our company was this more important than during this last year. Declining market values constantly kept the cycling pressure on us. Fortunately, throughout it all, there was one constant-the collector.  The collector was with us to ring in 2019 and throughout the duration of the year; now, here we are in December, still selling coins to collectors. Yes, collectors really were the backbone of  2019. It truly has been a collector-driven coin market, and we expect more of the same going into next year. So, the recipe seems simple. Keep coins moving, and continue to service the collector. We intend to do both. To all of our friends, we wish you and yours a happy, healthy and safe holiday.

The Reeded Edge Heads to Annandale For Final Show of 2019

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Ernst Community CenterIt really is hard to believe that we are concluding business for yet another year, our thirty first as full time numismatists. To celebrate both our anniversary and the onset of the holidays, Rob and Robbie will both be on hand this weekend at The Enrst Community Cultural Center on Northern Virginian Community College’s campus for The Annandale Coin Show. Look for the giant BUYING, BUYING, BUYING sign clearly marking The Reeded Edge’s prominent booth space right inside the front entrance to the bourse hall. The guys will have a large variety of U.S. certified coin inventory with them, including some significant brand new office purchases; it would definitely be worth your while to stop by and take a look. Equally as important, The Reeded Edge will be aggressively buying as our need for fresh material is ongoing. Please consider offering Rob and Robbie any better numismatic items, especially coins that have been off of the market for an extended period of time. Whether it’s one higher-value coin or an entire collection, The Reeded Edge wants to be your go-to dealer. Our open checkbook policy will be in full effect for Annandale, so please show us what you have, and we will do our part to convert it into some holiday cash. Unlike many of our associates in the coin business, you will never hear us say that we’re not buying. This has been an active year in the numismatic arena, and we are stocking the shelves anticipating more of the same for 2020. The quintessential FUN Show in Orlando will be ringing in the new year for us, just as it does every year. More details on that mega-show will be coming next week. For the time being, we wish everybody a happy and safe holiday season, and hope to see you in Annandale this weekend.

Coin Economics 101 & The Cost of Money

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-A personal perspective, By Rob Lehmann

Business college taught me about traditional models. I gained insight into how various businesses ran. I learned that the snapshot of success or failure is usually disclosed by examining their finances. The nuts and bolts of any business can often be dissected by disseminating a P & L statement, balance sheet and associated ledgers. I also learned that a traditional inventory-based business sells durable goods at keystone or double cost (100% mark-up) and perishable goods at double or triple keystone (200-300% mark-up). In ordinary terms, this means that a shirt that cost a retailer $10, gets sold for a minimum of $20. A piece of fruit that cost a grocer $1, gets sold for $3-$4. Let’s now apply this simplified model to my business, The Reeded Edge. By definition, I am a wholesale-retail business. Ignoring the wholesale facet for a second, this means that in a traditional retail business model, a coin that cost me $100 needs to sell for a minimum of $200, a 100% mark-up or a 50% gross profit margin (GPM = the percentage of total revenue that becomes profit).  The problem arises in the word traditional. There is NOTHING traditional about the rare coin business. In fact, we defy tradition at almost every turn. Let’s go back to the example of the coin that cost me $100. On average, I sell this hypothetical coin for $115, $120-$125 if I’m lucky. This mark-up (or lack of) miffed my accountant. He told me that it was impossible for a business of my nature to sustain with this model. He and I had that conversation 31 years ago! How then, does my non-traditional business do it? To simplify the answer, I will address two extremely important concepts: inventory turns and cost of money. As we will see, this is a symbiotic relationship, meaning one factor impacts the other. First, let’s look at inventory turns. An inventory turn can be simply defined as my annual sales divided by the value of my inventory. For example, If I sell five million dollars worth of rare coins in a calendar year and my average inventory is valued at one million dollars, in this instance I would have 5 inventory turns per year. In actuality, the target number I need to hit is 6.5. Without micromanaging, this can easily be monitored by keeping a handle on my inventory levels and staying cognisant of my sales figures. Let’s look at the second factor or my cost of money. This is a bit more abstract, meaning that its harder to measure or quantify. If I maintain 6.5 inventory turns per year, then every $1.00 spent on coins, without any profit factored in, has yielded me $6.50 at the end of the year. Now let’s apply my non-traditional mark-up of 15% and see what happens.  My one million dollar inventory yields me $6.5 million dollars of annual sales multiplied by 15% or an additional $975,000 of profit. In this hypothetical example, I now have profit which allows me to pay salaries, rent, insurance, travel costs, advertising etc, etc….which is known as overhead. If I turn inventory less often, this profit number would decline. If I turn it more often, obviously it increases. The direct correlation between inventory turns and profitability of my business should be readily apparent. Let’s now look at cost of money. I will apply this simple definition. Cost of money is what every dollar is worth to me at the end of a calendar year. In the previous example $1 invested in inventory at the beginning of the year, yields me an additional 97.5 cents at the end of the year. Every dollar I gain, yields me $1.97 per year in round terms, and every dollar I lose, cost me $1.97. Therefor my cost of money annually, expressed as a ratio, is approximately 2:1. Why is knowing this number so important? For one, it allows me to assess the liability of dormant inventory. Not every coin, sells 6.5 times a year. Some are still in inventory a year later. For every dollar spent on one of those coins, it has cost me almost two dollars. Awareness is very important in business. It is one of the reason I constantly monitor stock codes and how they translate to the age of a coin in inventory. When a coin gets to a certain age, it needs to go. I will discount it incrementally until I hit the sweet spot and it sells. The actual loss sometimes is the least offensive aspect of ownership. The dollars the coin has tied up by not selling, and the value of those dollars in sustaining my business, is the more integral factor. A second and equally important component of understanding cost of money, is loan value. What exactly do I mean by this? Let me use a simple example to illustrate. If a customer decides to purchase a coin but needs an extended period of time to pay for it, I have to understand what it will cost me to do this transaction. Let’s say that customer wants to buy a $1500.00 coin which originally cost me $1250.00, and needs two months to pay for it. On the front end, I am making $250.00 of profit, but in reality, I am only making $250.00 less the cost of money of providing 60 day free financing. I know that my cost of money annually is about 2:1, which on a monthly basis, would translate to about 8%. That $250.00 profit times 8% times two (the number of months that I am providing free financing) , is now reduced by approximately $20.00 per month, netting me an actual $210.00. Is it now apparent why understanding my cost of money is so important?

Contrary to popular belief, the coin business really is extremely challenging. The margins are some of the lowest for any inventory-based business on the face of the earth. Challenges such as a declining market, slow-pay accounts, economic or seasonal factors and rising overhead, just to name a few, impact my business even further. Understanding and interpreting concepts such as inventory turns and cost of money are really not electives. They are at the very foundation of my business, and what allow me to continue selling rare coins for the next 31 years.

Note: Throughout this article, I have used the first-person. It is not just I who runs this business. Robbie Jenkins is both a junior partner in The Reeded Edge and an equal partner in The Reeded Edge Reserve Equity Fund, a related but separate company. Without Robbie’s knowledge, dedication and work ethic both companies would be nothing more than namesakes. I don’t want any of my readers to think for a second that our business is a one-man operation, because that would be the furthest thing from the truth.