Updated: Feb 21, 2022
How much seed money to you have to invest? Do you have a collection that can become inventory?
Most people start with $50k - $75k or equivalent in inventory that is saleable at current prices. In order to do shows you need to fill up 2-3 cases. If you have $50K in inventory, you may sell $3,000 at a show, make $300 and all told will be worth your time for a Sunday. Much less than that and you will not be covering table fees. If you do not need the cash and can keep it in the business, you will be able to grow it over time, so having $10K in sales with $1000 profits is a normal one day show. Of course, the split between coins and bullion is important. You can make 10-20% on coins, 2-5% on bullion.
Inventory and SKU management
You are selling to the public, so must carry multiple skus of product. In coins, it means you cannot just buy one or two series and expect to make a lot of money, unless you are situated to be “the guy”, like Jay Cline was in Standing Liberty Quarters, Rick Snow in Indian Head and Flying Eagle Cents, or Julian Leidman in patterns. Most of us need to carry a lot of different series in coins, even some that we traditionally may not have liked. Personally, I never cared much for Morgan Dollars, but they are the backbone of the hobby, so if you don’t have them, you lose out on a lot of sales. You build your inventory around fairly common coins, as rare coins are rare. You can specialize in a small number of things, but breadth is generally better than depth, at least until and unless you get known for something. If you are inclined to write books and articles, that may happen. Otherwise, most of us will have a breadth of offerings.
In bullion, sku management is important as well. There are silver and gold coins and rounds of different types, bars of all sizes, and different manufacturers. You need to carry enough diversity that people feel there is a choice, but are not overwhelmed with choices. I carry 1 oz rounds, 5 oz, 10 oz, half kilo, and kilo bars. I do not carry 4 different kinds of kilos, for example. You need to manage your inventory so you do not run out of skus that you carry at any time. Running out during a show or before a show is poor inventory management. In gold, you have the decision to carry foreign circulating gold or US pre-33 as well, both of which have a following.
You will find bullion prices will go up and down, but you should always sell at a price where you can buy back cheaper with decent margins. At times this will involve selling bullion at prices below where you bought it, but maintaining inventory by always buying back cheaper will lead to success in the long term as prices will not go in one direction forever.
Most people do not talk much about the business side of the business, but it is important too. Create a business, preferably as an LLC to protect your personal assets. Setup a bank account in the name of the business that is separate from your personal account. You will find business checks to be useful, though you will need to deal in cash until you are known.
Get a safety deposit box for your inventory, or a TL-30 safe with a home security system.
Get a PO Box and start using that for all business purposes. Go to VistaPrint and order business cards with your business name, PO box, phone and email on them.
Either setup spreadsheets to track your costs and sales or invest in Quickbooks so you can do your accounting. Keep scrupulous records so that you are able to file your taxes. The IRS may not care about your $300/month profit at the beginning, but you may be surprised by how quickly this can turn into $5000/mo and its best to establish good habits early.
Establish a cost code based on a word that has few or no repeating letters, at least nine letters long. Correspond the numbers to the letters and you have a basic code. Write costs in code on the back of flips so you know what you paid for items. Never tell your code to anyone. Why use a code? You will have to hand coins to others to look at and they will read what you write on the flips.
Buy 3 display cases so you can do shows, carrying bags, and a cart.
Setup at some local shows and meet some dealers. Be a dealer at shows and you will get wholesale pricing on coins when buying. Go to big shows and learn who the dealer's dealers are. Spend a lot with them and sell at retail. You need to build an inventory as well as a clientele.
Coins should be bought from dealer’s dealers. These people do not have pretty displays. They often have coins in boxes, often disorganized. Some of them explicitly will not serve collectors. However, they do extremely high volume and move coins at cheap prices. Be prepared to spend a few thousand dollars at a time to not waste their time.
Bullion should be bought from distributors if you want to be a serious bullion dealer. The online retail sites like Bullion Exchange, JM Bullion, Provident, and SD Bullion are not a source for dealers for the most part. They are retailers and that is what they do well. They may be the only source for some of the newer issues, but decent pricing will usually require buying in bulk. Find out who the distributors are and set up dealer accounts. These folks do not want 10,000 accounts that do $5000 orders once a month. They live off of the 500 accounts that do $100,000 orders a month. You can start with one until you develop volume, then have multiple accounts. It will be difficult to get the very first one setup as you will need trade references.
Selling Setting up a local shows is a good way to start. You will start out trying to cover your table fee at the beginning but should be able to work your way up to making $500 on a Sunday afternoon.
There are coin groups on Facebook that a lot of business is done on. Some groups have a focus on Coin Collecting, Selling, and Trading, and others on Silver and Gold Bullion. Join a small number of them, get known, and start selling. Success in selling in these groups relies on the reputation of the seller and you will need to have a steller reputation online in order to sell at any volume. Reputations are built with hundreds of good sales and can be destroyed by one bad deal. There are sellers that do well on Instagram and Reddit as well, but it takes a long time to develop a following.
Finally, network with other dealers a few years ahead of you. Some of them will be willing to share some of their tricks and you will be able to learn how to get to the next level.