Young Coin Dealers, Taking Tables is a Key to Success

By Charles Morgan for CoinWeek …..

Two weeks ago, I published Five Tips for Young Coin Dealers, an article that got quite a bit of play in the hobby. I’ve given the topic some more thought, and so today I wanted to talk about the vital importance of shows to the hobby and especially to the business of coins.

As a professional numismatic journalist and a former Governor of the American Numismatic Association (ANA), I can tell you that the current state of coin conventions is not what it once was. The Long Beach Show is on shaky ground. There have been numerous discussions over the years to end the ANA’s National Money Show (as a board member I suggested the ANA turn it into the organization’s annual convention). In 2023, Coin World announced that it would enter the space in a partnership with Larry Shepherd; the future of that enterprise hinges on its September show in Rosemont (Chicago), Illinois.

Why Are Coin Shows Struggling?

I believe there are three primary explanations for the state of coin shows across the country: auction company pull-out, aging coin dealers, and a lack of innovation. Let’s tackle each of these one at a time and then I will explain how you, as a young dealer, can take tables at shows and build a successful business.

Auction Companies

The leading auction companies have built tremendously successful businesses on the backs of major coin shows – and not just in the United States. Coin shows attract buyers, and for years this meant that landing official sanction at major coin shows was of paramount importance to their bottom line. For example, Heritage was for a long time the sole sponsor of the ANA’s conventions and has had long-term relationships with other shows. An even better example of my point is Stack’s/Stack’s Bowers Galleries, who built a large portion of their brand and marketshare on their dominance of the New York International Numismatic Convention (NYINC) and biannual Whitman Expos.

Over the last two decades, in-person auctions have coexisted with each of these company’s internet platforms. But instead of building auctions around the attention span of an in-person audience, the firms packed thousands of lots over many sessions. For most of each sale, a live auctioneer performed his or her duties in front of an almost empty room.

When COVID-19 hit, auction companies were able to continue operations because their bidders were already online. Add a dearth of entertainment options to the mix and 2020-2021 became two of the hottest years in the history of the rare coin market. Unfortunately, shows suffered major losses, being cut off from their revenue streams and having to eat overhead and collateral costs.

As shows reopened, attendance was understandably lower than before the pandemic, and auction firms–seeing the cost savings of staying online–reevaluated the value of sponsoring conventions. The impact of this decision on coin shows is significant and will force them to find new ways of generating excitement and revenue.

Aging Coin Dealers

Aging out is a normal part of the industry’s life cycle. Looking back over the past 100 years of the hobby in America, we see a handful of prominent dealers dominating their respective eras, with the prior generation’s greats receding from the spotlight and the next generation of market-makers coming onto the stage.

The majority of dealers aging-out today entered the market in the 1970s and ’80s, when the hobby was much more popular. The landmark event of their careers was the arrival of third-party grading companies. These firms freed dealers from having to defend the quality of their inventory (and expertise) with each sale. Graded coins also brought excitement and introduced new concepts to the market – conditional rarity being chief among them.

I believe that third-party grading made it easier for dealers to stick around for longer, as it made the product easier to sell and the market more predictable. It also made the rare coin business much more lucrative, as conditionally rare coins, even from common dates, sell for tremendous premiums. Of course, the great coin rarities now often sell for millions of dollars.

The negative consequence of building a market around third-party certification is that influence has been concentrated into the hands of a few established companies and dealers. Nevertheless, the founders of those companies are aging out, and many of their long-standing dealer customers are, too.

For the younger generation, this is a time of opportunity! Since entering the coin industry, it has been my sense that the market was top-heavy with aging-out coin dealers and that there was an opening for younger dealers to shake it up.

I got the first taste of this when Georgia coin dealer Rob Oberth founded Coin Dealers Helping Coin Dealers in 2017.

Oberth’s group quickly established itself as a force within the industry because of the ease with which dealers could trade amongst themselves using social media. But he wasn’t done there. In 2019, he successfully promoting the Great American Coin Hunt, a nationwide promotional program where dealers and collectors seeded collectible coins into circulation, giving the public an opportunity to find something cool and valuable in their change. This marketing strategy got the attention of the national media, and even the United States Mint joined in by releasing collectible W-mintmark quarters into circulation.

Seeing Oberth’s success first hand, I can tell you how amusing it was to see how quickly established dealers coalesced around him. They understood the value of innovative thinking. For young dealers, this innovation will be critical to not only your success but also the growth of the market. Bring your ideas forward and build a market that will grow for the long term! Change is way overdue and you will be that change!

Lack of Innovation

I touched upon the lack of innovation as it pertains to aging-out coin dealers and how dealers new to the scene bring much-needed new ideas. But I wanted to spend some time discussing how the lack of innovation persists and how it weighs down our industry.

Let’s start with what I call #metoo businesses. A #metoo business is built on the idea that if someone else could make it work, then I can, too. Not long after PCGS launched a successful for-profit third-party grading business, several other businesses emerged – all offering essentially the same services but lacking the innovation of the original concept. Did these services offer a good product? No. And not because those involved could not grade coins – I’m sure some of them could – but because they did not understand that the product PCGS was selling was not only a graded coin but one graded to a standard acceptable to its dealer members.

Similarly, when John Albanese launched CAC as a coin-stickering service, other dealers followed suit, stickering their own coins, or stickering world coins, or stickering modern coins, or stickering coins that were blast white… you get the idea. As with PCGS, these services failed to realize that it wasn’t the sticker that made CAC successful, it was the network of dealers that worked with John to accept the premise that the coins he and his team found worthy were a cut above the rest.

The most recent #metoo business idea that is floating around the market is the blindbox certified-coin product. I take some umbrage at these promotions because I pitched a similar idea to PCGS and NGC years before these products emerged. My idea was to grow the hobby by offering the public opportunities to interface with coins and the grading service’s brand by purchasing low-cost blind packs ($30-$50 a pack) and building complete sets around a 30-coin-per-series registry set construction. I’m not suggesting that any of these companies lifted my idea, but what came out instead was nothing short of loot-box gambling, where major losses can be incurred by not getting the chase coins. It may be exciting to see an internet influencer to break a pack open and land a $100,000 Pan-Pac in MS63 (only to resell it, I’m sure), but for a majority of buyers, the $300 coin they get for their $1,000 bucks will leave a bad taste and you don’t build markets by alienating people.

This lack of innovation carries on to coin shows, as well. Let’s face it, shows have been stagnant for years. With flagging support from auction companies and aging-out coin dealers, much of the excitement has dulled. Is the era of coin shows in the past?

No, I don’t think so. But it will take your generation of dealers to bring them back to their full glory and it will take innovation and for each show to carve out its own identity to make it happen.

How Young Coin Dealers Can Use Shows to Build Their Business

I still believe that coin shows offer young dealers the best opportunity to building lasting relationships and customer bases. Take what you’ve learned from selling online and translate those skills and innovations to in-person sales. Develop a branding concept and design your booth to project this level of sophistication.

Many young dealers already attend shows and walk the bourse selling their own coins or trying to sell coins on behalf of other dealers, and it’s true that you can make money doing this. But ask yourself, are you really building your own brand moving coins for the benefit of others?

In order for the hobby to grow in the coming years, shows are going to have to get younger, more current with what’s on offer, and more innovative in the way they do business. Much of this innovation will come from young coin dealers. But now is the time to act before the next generation seizes the opportunity.

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