Selling Your Collection Through Outright Sale

"Liquidation price means low enough that the buyer feels comfortable even with items he didn't want."

This chapter is the first of three that outline methods for disposing of your collection. Each has benefits for certain types of collectibles, and weaknesses for others. The common thread is that each method subscribes to the philosophy that "time is money." This means that, all other things being equal, the faster you get paid for your collection, the less you are likely to receive. This is not an unfair situation, as you will see in these chapters. We are going to try to put you inside the heads of your potential customers, and help you understand their motivations for buying. Their time is valuable, as is yours. Our goal is to aid you in making a measured decision about the amount of time you are willing to invest in the disposition process.

Outright sale is without question the easiest method of selling a whole or partial collection. You present the articles to one or more buyers. They make offers. You either accept or decline. Your time invested is limited to the period you are with the collectibles at the evaluation(s); if you accept an offer, you receive your payment and get on with your life. If you assembled the collection, this may either be devastating or cathartic, but it won't drag out.

First, we will assume that you are offering any collection of substance to a dealer in that collectible type. Dealers are most likely to have both the motivation and wherewithal to buy an entire collection. It is also easier to locate them through their advertising and they can be qualified through their references and affiliations. What is the dealer thinking when you bring him your collection to bid?

Dealers are in business to buy collections coming through the front door (or through the mail). Most of their advertising and their longevity at a particular site are planned specifically to entice just such a situation. Many collectibles are a fixed-supply commodity. If you're in the business, you have to acquire products to sell, and advantageous buying is at the core of such a business. The dealer wants to buy your collection — it's his raison d'être — and the nicer the collection, the more he wants it.

We have two parties together; one who wants to sell and one who wants to buy. Now comes the sticking point. In any trading situation, the final result reflects the combination of knowledge and leverage of the parties. The dealer wants to buy the collection at the lowest price he can pay without it walking out the door. His leverage is that he has the money and willingness to buy the whole deal, plus any degree of impatience that you possess or he can instill in you. You may also believe that he is more knowledgeable about current markets than you are. You, nonetheless, want to feel that you are getting the maximum reasonable price for your collectibles. Your leverage is that he does not want to let you out the door with the collection. Your knowledge and negotiating skills are also an advantage.

A dealer is bidding on three planes when a collection is offered. First, there are those items for which he knows he has customers or which are readily liquid in his retail or "high wholesale" operations. These will generally be figured strongly because his risk and expense of holding inventory is minimal. Second are the articles that do not fit that criteria—collectibles that are not routinely traded and which will require greater effort to sell. This particularly applies to bulk where additional shipping weight is also a factor. Such items will be figured cheaply because of the effort and expense necessary to resell them at a profit. This may seem callous, but it's a matter of perspective. Some of your collectibles may be very special to you. Those same pieces sitting unsold on a dealer's shelf are merely inventory that is losing (or costing) interest. He will take the time to find the "high buyer" because it's how he makes his living, but his bid for those items will reflect both his intent to make a profit at wholesale, and any uncertainty about the high buyer and his buying levels. The third factor is not related to the collectibles, but rather what the dealer perceives his competition to be. If you live in a small town with only one dealer (in the field of your collectible), his basic assumption may be that he pretty much has things his own way. This may also apply in any locale if the dealer perceives you aren't "shopping." His bid will not be competitive.

There are those who will read the last paragraph and mumble about "rip-off" dealers, but the reality is endemic throughout society and business in general, not just this portion of it; it lies at the very heart of Capitalism. Americans as a whole are not raised to function in a barter system or to be negotiators. We go to the store and buy what we want at the marked price, only sometimes, perhaps, after checking the newspapers for sales. It's what we see in childhood and by the time we are adults making our own decisions, most of us are conditioned to the process. As a result, a large percentage of people still pay "sticker price" even in those environments where some negotiating is expected.

When selling or trading something in, the same conditioning applies — the dealer establishes the market and as the perceived authority figure, a surprisingly large number of people accept that quote as fact—or at least believe that their only options are yes or no. The dealer, of course, falls into that group of people who, through aptitude or training, are both comfortable and practiced in negotiating (that is, appearing not to be negotiating). Naturally, you need to present your collection and your business skills in their best light if you want to get a better price for your coins.

Here are some tips for negotiating the best deal on your collection:

• Know the Best Items for Direct Sale
  To get the best prices from direct sale, consider all of the following tips and how you might apply them to your effort.

• Allow yourself a National Marketplace
  The world has become a much smaller place through increasingly more rapid communications and transport. You need not limit your search for outlets to your hometown. If your collection is significant enough, the outlets will come to you!

Find a "Full Service" Dealer

Remember the note about liquidity-based bidding. A large dealer with a wide clientele and business contacts will "see" your more common items as more liquid because they routinely sell that kind of material as well as the "good" collectibles. They already know who the high buyers are and what they're paying. Additionally, because of their business volume, they will not have the need (or temptation) to "make their month" on your collection. As a result, they're more likely to bid the whole deal "closer."

Create an "Aura of Competition"

It is rarely a bad idea to get more than one bid on something you're selling and NEVER a bad idea to let a potential buyer know that other people are bidding (whether they are or not). This can be communicated after you get a bid — "Is this your best offer, Mr. Smith? I know dealers sometimes leave a little 'wiggle room,' but I have two other people bidding and this isn't that kind of negotiation" — or before — "I want you to know in advance, Mr. Smith, that I'm offering the collection for bid to three people. Please give me your best offer the first time."

Display Your Knowledge in Discussing the Bid

Dealers and people handling collectibles respect those who speak the language. You don't necessarily have to have a deep knowledge if you can "sell" yourself on a few key points. If you have a few pieces in your collection that stand out, bring them up. "What do you bid for this, Mr. Smith?" Similarly, you should get a feel for the levels being offered for your second tier material.

"Play the Player"

You needn't be a market expert to get the "feel" of a collection if you are at all adept at reading others. Follow up the responses to the questions above with further questions. "You bid ____? Isn't that a little low?" If the dealer can immediately address the questions with logic and weigh options, he may be extremely glib, but more likely he is comfortable with his offer. Alternatively, if he's evasive or there's no logic to his response, there's very likely negotiating room left in the offer.

Split the Deal

Rather than offer the whole collection in one lot, offer "test" groups for bid to get a feel for your potential buyers. Generally, there is more control when dealing with smaller, manageable "pieces" and you can often get a bit more in this manner. There is also the "bait" technique of letting the bidders know that there is more beyond. This perception may lead some bidders to treat you better in the early rounds. The trade-off is more of your time.

In summary, only you can decide how much of your time you are willing to invest in the disposition of your collection. Generally, the more productive time spent, the better the result. You can be most effective in preparing for disposition by knowing your collection, knowing the market and knowing your potential buyers.

TIPS FOR HEIRS: If you are a non-collector and after reading this chapter you want to use this method, we would recommend strongly that you seek multiple offers. We would also recommend that you first read and consider the options in the next two chapters as well.