PCGS & NGC slabbed coins - I am curious

[Guest]

To preface this - I know some do not at all like slabbed coins. This question is not for you... (I am not trying to be rude - really)

So - I have started to hunt NGC/PCGS slabbed coins on e-bay. Specifically PF69 (or PF70, but this doesnt really work with them, but sometimes...)

Daily I will place 20-30 low bids on these. I don't like to pay more than $5 or $6 total on them. I may get one or two - some times none - but that is the fun of the hunt.

Now - Lets say that the 'value' on this coin is $20. I know it takes like what - $18 to slab a coin. I know that the $18 is not part of the value of the coin, but if I were to buy a raw proof $20 value coin and slab it I would be at like $38 for it.

How am I able to do this? I mean - if this coin is a $20 coin and it takes $18 to slab it, and I pick them up for $6 or so. Someone is losing money...

The only scenerio I can come up with is that 'coin dealer' is getting a large amount of sets, rolls, whatever. Breaking them out and sending them to get slabbed, hoping for the PF70's to roll in and then dumping the PF69's and lower. So it is a loss leader of sorts... Then keeping 'one' (whatever number) for their collection and selling off the rest of the 70s which could, in theory, help recoup the dollars that he is spending to slab all of them...

Obviously, I am in it for the long haul on these - The coin that I spend $6 on I am not too likely to be able to flip them anytime soon for more than that. Plus I like to look at them. But I don't think I am too likely to lose money on these....

Thoughts/opinions/theories are welcome.

[coinman2009]

I say if you're pulling them at 6 bucks, Keep it up! That Seems Like A Great Buy!

[1sgret]

Most large dealers do bulk submissions (Solid dated bricks, rolls or broke out proof sets to obtain a reduction on costs) on submissions. All it takes is a few PF-70 or MS-70's to make a nice profit. Sell the rest and the dealer is still making a nice profit off the $6.00 - $10.00 slabs.

It only takes one major error or variety coin also out of a bulk submission (Sealed Brick) to turn an extremely nice profit. It is a gamble but it has to be paying off for the dealer.

[RWBILLER]

Joe's right on.
Bulk discounts! 20,000 or more at s time! You ever watch that tv junk? They do the same. I used to look foward to the 3:00 blood test- woke me up to watch that stuff on tv!!!
Roger

[liveandievarieties]

The other thing to consider is this- when I send in a coin for slabbing, I'm pretty confident in it's grade, but ultra-high grade coins are really a crap-shoot. The only way it seems to get MS-67s or better with any regularity is by submitting 100 or more at a time. Most smaller guys don't have the budget for this. So when I slab coins individually in a submission of 15 or 20 at a time, I may get back an MS-64 or 65 when under a bulk submission I personally think the same coin would qualify for a higher grade. With what I have invested in the slab fee (even if the coin cost nearly nothing out of a BU roll), I realize I won't be getting my slab investment back.
I could either sit on the coin for 50 years in the hopes that one day the value will exceed the slab fee and money lost with inflation, or simply take a loss and move on. You can't make money on every coin and what is one's loss is another's gain.