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What is Fair Market Value?

    Fair Market Value is not a new term; however, it may be somewhat new to the coin industry. It refers to the price a dealer is asking for a coin, which is somewhat over his wholesale price. You may ask why you cannot buy coins at wholesale. Very simply, you can. All you have to do is buy an inventory, set up your office or store, dedicate yourself full-time, buy insurance, obtain a security system, hire employees, advertise your company name, and you are in business. You can compete with the other dealers on an equal basis. However, if you are not prepared to do this, then you must allow the dealers who are in business, who bear the risks of market cycles, a fair markup on the coins they inventory. These dealers have to make a living just like you do in your chosen career.

    This is not their hobby, this is their career. Most dealers have spent many years in this business, fine tuning their skills to the point that they are experts in various fields. Granted, not all coin dealers are created equal. That is why competition, education, inventory, cash reserves, expertise, integrity, longevity, concern for the future of the industry, all meld into what makes up the ideal coin dealer in the eyes of the collector. You must also remember, that many collectors may be as much an expert in their chosen field as some coin dealers. Through the many years of education--reading about and studying coins, collectors develop a love for numismatics that goes beyond just a pure business aspect. They truly care about numismatics. There are many dealers who feel the same way. It is your job to select the dealers who you feel will represent your best interests as well as their own.

    Getting down to brass tacks, if dealers are not allowed to make a fair profit for all their time and efforts in building a successful business, then they will not remain in business. The more dealers that are in business create more competition. If you create a competitive situation, dealers vying for your coins, as you want to sell them, then you will be able to maximize your returns. If there are fewer dealers making a profit in the coin business, competition will not be as fierce, and when you want to sell your coins, you will be at the mercy of the few remaining dealers. More dealers, more competition; it is that simple. This is free enterprise--the American way.

    Now, what really is Fair Market Value? It is a reasonable charge over a dealer's wholesale price for a specific coin. "How do you determine that wholesale price on which you base the Fair Market Value?" As professional impartial coin price information providers, we search the entire marketplace to find the lowest wholesale price for coins that are available to purchase. Competition among dealers to sell their coins will force them to offer their coins at realistically competitive prices. The more coins that are available in a specific grade within a series, means that dealers will be more competitive with their prices. The Fair Market Value is based on the rarity of the coin. On rarer coins the markup may be, and should be somewhat higher.

    I have served in several capacities in the coin business for 30 years. I have been watching, learning, and studying market capabilities, market momentum, market strategies, and market cycles for over 20 years. I have noted the marketplace transitions that have occurred over the last ten years. I have seen the market transcend from studying coins and trading coins on a sight basis prior to 1985; collectors were excited to look at and purchase coins they liked. With encapsulated coins, the marketplace tried to venture into an arena whereby coins could be traded just like stocks, without seeing them. This does not work for the multitude of coins. If coin collecting were created to trade just like stocks, there would be no need to ever look at the individual coins. There would be no coin collectors.

    However, there are coin collectors; thousands, if not millions of them and there have been since Biblical times. If they don't like the appearance of the coin, a cheap price does not make it look any better, only more reasonable. We have now come full circle. Dealers and collectors want to view the coins they are about to buy. If dealers like the overall appearance of the coin, they will pay a fair price. If the collector feels the same way about a coin he/she likes, they also will be willing to pay a Fair Market Value for the coin. This Fair Market Value is the price we will report to you. This will give you a fair way of learning more about the coins you purchase and relieve some of your concerns about the value of those coins. Remember, "Cheap coins aren't nice, and nice coins aren't cheap".

    Bear in mind that the more coins available within a given grade category, the more competitive prices will be. If a dealer owns a coin that is certified as a very low population, or, is a one-of-a-kind issue, this dealer may Ask any price he/she wants. In these rare instances, it behooves the collector to research this particular coin to determine whether they think this is a good value. If NumisMedia posts a price of an extremely rare coin, which may be the only coin offered (Fair Market Value or recent auction information), it is listed for reference purposes only. NumisMedia takes every precaution to determine the validity of prices posted on this system. However, NumisMedia makes no assertions or guarantees (implied or otherwise) that the coins offered by the dealers on this system are a good value. As a collector, you are obligated to study and learn about numismatics before you spend substantial amounts of money on rare coins. Competition among dealers will create the most competitive prices for coins. It is normally an appropriate course to check out the various dealers with whom you wish to do business. The dealers on this system are dedicated to numismatics. How they serve you, is strictly up to you.


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