Is buying from Swiss America a total loss?

Hello,
I'm a complete and total new-be.
I need to know where I can get information on the risks involved in buying from a dealer like Swiss America. Specifically, the coins of interest are American Eagle Silver proof coins and American Eagle gold proof coins.

Let me paint the picture that I think I am seeing.
Please correct me where I have it wrong.

First they don't want you to know what the *REAL* market value is for the coin.
They tell you "this is the value of the coin".
But they are really lying.
The value they have is in reality *THEIR SELLING PRICE* for the coin, and does not really represent the coins *REAL* value.

They avoid providing any detailed information about the coin, such as who minted it, the date of minting etc. They withhold this type of information to keep you from finding alternative sources where you can purchase the same coin.

Then after they convince you to buy a coin at their inflated value, they refuse to tell you that their transaction fee is going to be upwards of 30%.

Then they want you to sell the coin back to them some day in the future.
And the whole scam gets repeated, but in reverse order.
They offer to pay you far under the coins *REAL* worth.
And again charge you a massive transaction fee.

Did I get it right?
Please help!!
Thanks

 

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i'm going to be honest....I stopped reading after hello

 

This thread seems like a rant instead of a question. There are a multitude of reputable dealers to buy from, so why would you engage in angst for such a common coin?

 

I agree with Tom...find a dealer you're more comfortable with.

Bruce

 

Thank you very much GeekPride!!
I will follow up! :-]

 

Hi Tom,
I appreciate your response!
I know I must sound totally unrealistic.
Perhaps that is because I know so little about the subject compared to everyone else.
And I'm sure most of the members of CoinTalk learned these things years ago.

Off the top of your head, can you name a few dealers that you consider reputable?

And can you recommend a book or any form of information on the subject for a beginner?

If you were going to counsel a friend on the *smart* way to buy, what tips would you site"

Sincere thanks!

 

Thanks again for having patience with me!!

One site I just found is the usmint.gov, selling 1 oz American Eagle Silver and Gold proof coins.

Price for silver is: $52.95
Price for gold is: $1,660.00

The "aforementioned dealer" has them also listed as
(1.0 oz Gold American Eagle Proof) and (1.0 oz SC1AE Silver Amer Eagle Proof).
Price for silver is: $78.00
Price for gold is: $2011.00

Without knowing any better, I would interpret the difference as commission fees.
Gold proof commission appears to be 47% on top of the usmint price.
Silver proof commission appears to be a little over 20%

So if indeed these are the same exact coins, I would be silly to purchase them from a dealer, when I can get them at a significantly lower price from usmint.

What is REALLY odd is the dealer is indicating they will buy back the silver proof at $67.08 and the gold proof at $1729.00. How can that be?
How can they afford to purchase a coin back from someone and pay a higher price for it than they would pay if they bought that coin from usmint.gov???
I must be missing something!!!

 

moderncoinwholesale.com is a good site

 

Why not just go to a local coin shop / pm dealer?

 

Thank you Mike,
Yes, I found them there listed at: $1,447.72
And I also found them at APMEX for $1,577.69
And also at USMoneyReserve for $1,372

Tonight I found a 10 year chart for the closing prices of Gold Eagle coins at http://www.monex.com/prods/gold_eagle_chart.html

What burns me is, I have a friend who purchased these coins from the aforementioned dealer in December 2009 and the dealer charged $2525 per coin.

A few days later, the buyer took possession of them and had them valued, and the agent valued them at $1300 per coin. With the quantity purchased it was a loss of $20,000.
The buyer called the dealer and the sales person said "don't worry about it, the gold market is just fluctuating".

My friend obviously did not do due diligence and compare prices with other sellers to discover that the *REAL* value of the coin was $1300 at that time.
The dealer inflated the price per coin by something like 90%.

Unfortunately, no way to recover that loss now unless the *REAL* prices of Gold Eagles goes above $2500 some day. And I think that will take another stock market crash before that happens.

 

which local shop do you recommend, jensenbay?

 

There is a local shop near me that I have purchased silver eagles and other bullion coins from in the past. Just pay x over spot price. I haven't purchased proofs though. Sometimes walking into a shop is nice. Not everything has to be online. Anyway, I have had great service at Redmond Rare Coins, and other local shops. I won't help unless you're near where I live

 

However, it is helpful to know that you have found local business that you respect and trust. That speaks very well of searching around for some in my area. :-]

 

I don't know if anyone here gets the "MoneyChanger" newsletter.
I just started subscribing.
But here are a few items on his "Ten Commandments for buying coins" you might find interesting.

Never buy premium if you can avoid it.
Buy bullion for business, numismatics for fun.
Buy silver first, then gold.
Buy small gold first, then large.
Never buy exotic coins or modern rarities or anything you don't understand.
Know your dealer.
Never swap bullion coins for U.S. $20 gold pieces.
Never break the law.

 

File a complaint with BBB - looks like others have http://www.bbb.org/central-northern...ng-corporation-in-phoenix-az-10879/complaints. And as mentioned use a local dealer - but understand how they work. My local dealer sells at a fixed price over spot - last time I checked it was like a $1.50 for silver. But understand how they buy and how they sell. You might even want to talk to a few shops in your area.

 

Thanks Mark!
I really appreciate the link!
And yes, I think there may be one in the county where I live.

 

But how many coin dealers have a hit record?

 

When buying bullion type coins from a dealer you don't ask what the "market value" or the "real value" is. You want to know what they will sell that coin for right now and what they will pay for that same coin right now. (I assume you already know what the spot price is.) This will tell you what their buy/sell spread is and what their markup over spot is. And if they charge a "transaction fee" go elsewhere. There should be no reason for a transaction fee, they make their money on the buy/sell spread.

This is true if you are buying the current years proof gold and silver eagles. If you are looking for a previous years coins you have to buy from a dealer, because the mint isn't selling them. In that case they will probably be more than issue price.

Possibly convenience. They are buying and selling constantly. So they will pay a little higher to get the coins NOW rather than having to order and wait for the Mint to get around to sending them. If I have people calling in and ordering proof silver eagles I need to buy coins and have them NOW not in two or three weeks.