The Guide to Coin Collecting -- Revised 19/01/12 : eBay Guides

Hello to all my fellow coin collectors on eBay, and thank you for taking the time to read my guide.   I have written several guides prior to this one and I have decided to try to consolidate all my knowledge into a single cover-all guide.  This guide is written with Canadian collectors in mind, but most of the information I'm sharing is universal to the hobby and can be used by anyone.

1.  Buy the book; it'll tell you what you've got, what it's worth, and what to get next.  A good book will save you the pain of paying too much for a coin, buying something other than what you hoped for, or buying an outright counterfeit.   Price guides may also alert you to a variety that the seller has missed, and can allow you to buy a valuable piece at a bargain price.  Good price guides can be had for under $30, and are essential tools to anyone with a desire to collect.  For Canadian collectors I recommend the Charlton Standard Catalogue, and for American coins Red Book is the consensus for many collectors.

2.  Buy a magnifier, it's the best way to view your coins and it will help detect the small varieties that can make a big difference in price.  When you buy a magnifier, buy a glass one, the clarity of glass is significantly better than anything plastic can do for you.

3. Know your seller.  Before you decide to bid take a look at their feedback, pay attention to their location and read the fine print.  Some sellers make their money, and circumvent eBay fees, through inflated shipping prices. A good seller will state their refund policy, along with their shipping and handling costs up front.  It is not unusual (or unreasonable) for some sellers to have no refund policy on bullion or graded items, but for loose coins, I consider it a must.  Good sellers will make an honest assessment of the coins they are selling;  it happens too often that buyers will buy a circulated coin at excessive prices because a dishonest seller has listed it as uncirculated.  When it comes to business in exotic locatons, my advice is simple; NEVER buy rare coins from China, they're either fakes, or they won't come at all. Likewise, I don't sell to China because tracking your shipment is both difficult and expensive  If you are unsure about an item, ask.  In my experience a good seller will answer your questions in a timely and honest fashion while a dishonest seller with be brief and generally unhelpful if they respond at all.
 
4.  If your aim is to make money in the hobby, don't quit your day job.  Coins often take many years to appreciate in value, it is rare to make a profit in a matter of weeks or months.  Even if you do have an item rise in price, be mindful of eBay fees when you sell; the final value fees can turn an on-paper profit into a loss.  That said, if you're smart/lucky enough to pick quality items, you will see a nice return on your investment.

5.  High grades and key dates appreciate in value more than low grades and common coins.  Compare this years' prices to the ones listed in last year's price guide, and you'll find it's predominantly the MS65s and MS64s and the key dates that have increased in value.   

6.  Buy the best example you can.  Given the choice of a handful of nice coins or a single great coin, I would buy the great one every time.  You won't build a massive collection, but you will have a collection that will hold up well through the ups and downs of the coin collecting market.  I would rather have a collection of a few dozen high grade keys and semi keys than a collection of thousands of coins in average condition.  If they're worth the same value now,  mine is far more likely to have the higher value ten years from now. Of course, money isn't everything, and if you desire a wide variety to your collection, go ahead.  You may find that you have greater enjoyment from a massive pile of coins than you would from a single top quality piece.

7.  When it comes to damaged coins, my advice is don't buy them.  They are hard to sell, and are do not command the prices of an undamaged piece.  If you have a choice between a Fine coin that has been damaged, or a problem free Very Good example of the same coin, I recommend buying the lower grade.  Undamaged coins are easier to sell, and they have the originality that most collectors want.  The only exception to this rule is for absolute rarities; you may not get another chance to buy one, so take advantage, even if it means buying an ugly coin.

8.  Coin collecting doesn't necessarily mean buying hundred year old coins for hundreds of dollars.  There are some great opportunities to find valuable coins in your pocket change.  The best way to do this is to read the books, and familiarize yourself with the varieties out there.  Learn to recognize the cent varieties from the reign of George VI -- the 1949 A points and 1948 A between can still be found occasionally in change.  The 1973 Large Bust Quarter is in high demand in any condition, as is the 1991 quarter.  You can double your money (depending on the price of nickel) by pulling all pre-1981 nickels from your change; the medal value of these coins regularly exceeds 10 cents, and there are buyers who will pay a premium for them.  The average citizen doesn't look close enough at their change to notice these small differences, so these haven't all been picked out of your change.  Even if you don't want to collect these circulating varieties, you can sell them and use the profits to purchase a coin you really want.  

9.  When you are buying coins in higher grades (or key dates),  the best guarantee of the quality of your coins comes from a professional grading service.  In Canada ICCS was considered the standard for many years.  Unfortunately, many collectors feel that their grading standards have slipped, and the price for ICCS coins has slipped correspondingly. That said, if you have an opportunity to pick up a coin in the old ICCS holders, you can be assured of a top quality piece for the grade.  My recommendation is to stick with the two biggest services, PCGS and NGC.  They are American companies that do a great job of grading and protecting the coins.  PCGS has the reputation of being somewhat stricter, but I wouldn't hesitate to pick up coins from either service.  For the uninitiated, grading companies guarantee that the coin is genuine, they note the grade and condition of the coin,  as well as any significant features.  In my experience, the average collector can make a reasonable grading estimate for most mid grade coins,  but they tend to lose their accuracy in evaluating the higher grades, where a single point can mean hundreds or thousands of dollars difference.  If you don't want to risk losing hundreds of dollars on a coin that has been over-graded by the seller, buy a professionally graded example. 

10.  Get to know the difference between Mint State, and Proof Like.  Proof like coins are specially minted for mint sets, and were never intended to enter circulation; Mint State coins are coins that were intended for circulation and have been pulled out by collectors before they pick up much damage.  Mint state coins are less common in high grade than proof-like coins, as regular circulation wears out most mint state coins within a few years of release.  As a consequence, a coin graded at PL-65  is generally worth much less than the same coin in MS-65.   Keep an eye out for Numismatic Brilliant Uncirculated coins, it is a designation created by ICCS to describe modern-day Proof-like coins (the finish on these coins changed slightly, so proof-like is no longer an apt description).  Numismatic BU coins are not Mint State, and you should not pay a premium to get them.

11.  Be cautious when buying modern high grade coins.  Traditional economics say that high grade coins get their value from the scarcity of coins in like condition.  An 1858 large cent in MS-65 won't have many equals,  and you certainly won't be likely to find any.  A 2012 cent in MS-67 also won't have many equals,  but there is still the potential to find one. The 2012 coin you buy as the solo highest known could quickly find many peers, while there aren't likely to be many MS-65 large cents that have not yet been certified.  The uncertainty of whether your coin can hold up as the single best example is much greater for modern coins, and therefore you would be wise to keep this in mind before spending huge amounts on a modern high grade rarity.

12.  Buying large collections or lots for a single coin within them can be a profitable venture.  I have found that many of the lots I have purchased are sold by a seller without much knowledge who just wants to get rid of their entire collection.  It is not unheard of to buy a lot,  pluck one or two examples from the pile, and sell the remainder for a profit.  There is a slight risk to this, some sellers will often use lot sales to dump their worn, beat, bent junk coins in one go;  there's not much of value in these lots.  The best lots come from sellers with little knowledge, often those who have inherited a collection and have no interest in its contents.  These can be goldmines to the informed collector.

13.  Be careful with the buy-it-now items with a submit best offer option.  I have seen sellers who have a $10 item listed with a buy-it-now of $40, and a submit best offer option.  A buyer who thinks he's making a lowball offer of $20 is still paying double the value of the item.  Offer what the book price is,  not a price that tries to make a compromise with the seller.  Timing is very valuable when it comes to buy-it-now sales; a great buy-it-now deal will disappear quickly, so when you search the buy-it-now auctions, start with the ones that have been listed most recently.

14.  One final tip for all you collectors: buy what YOU want.  Everybody's collecting interests are different,  for ever Silver Dollar collector who swears by the Dollars, there is a dime collector who will swear by his collection with just as much passion.  Buy a few, or buy a lot,  the key to longevity in this hobby is to be happy with your collection.  If you don't like what you've got, you'll lose interest. 

I hope you've enjoyed reading this guide as much as I enjoyed writing it.  If you have found this useful,  please click Yes,  and let me know.