HOW THE INTERNET IGNITED NUMISMATICS Public Deposited
- John Feigenbaum recently wrote an article that appeared on the cover of the June CDN Monthly Supplement. "An Examination of the Rare Coin Marketplace: a Journey from the Industrial Age to the Digital Age" covers a lot of ground, primarily concerning grading. With permission, I'll reprint here the section on how the Internet has changed the hobby. John can be reached via email at: john@davidlawrence.com. -Editor
The Internet Ignites the Hobby
As in many industries, the Internet was a true game changer for the rare coin hobby. While the first web sites (including ours) began popping up around 1995, the true modern era of coin collecting was a direct result of the great efficiencies the Internet can provide. There are many reasons for this, and all play a role, but it is clear that certified rare coins are ideally suited to web site and Internet trading. I have sold multiple million dollar coins via email, based solely on an image and third-party grade.
With the new trading channel of the Internet emerged a new type of collector. This collector had previously not participated in rare coins for a number of reasons. Many collectors are unwilling to come to coin shows because of geographical/time constraints; others are uncomfortable in a show setting. The new collector is more technologically advanced than the collectors of the 1990’s and earlier. He or she is comfortable doing price research on the Internet and making purchase decisions without a single phone call. For this reason, dealers who have eschewed the Internet are missing out on an entire generation of current collectors.
In a repeat of the 1986 third-party-grading stubbornness, many “coin show†dealers refused to modernize their operations and go online with their wares. If collectors want to buy their coins, they have to come to a show, wait for their weekly copy of Coin World, or call in. Since most collectors of the established collectors of the early 1990s were also slow to adapt to the changing times, this refusal to modernize on the dealers’ part was benign for the better part of a decade.
Of course, there were a small number of dealers who did adapt to technology quickly, and their willingness to change and invest in technology paid large dividends. There is no greater example than live auction. As recently as 2005, Heritage Auctions found themselves in a very competitive live auction business with numerous powerful competitors, like Stacks (founded 1935), Bowers and Merena, American Numismatic Rarities, Superior Galleries and others.
Heritage was early and easily the most aggressive with technology investment and today they are the live auction leader with annual revenues reported over $800 million. A merged Stacks-Bowers is in distant second place and most of the other mentioned companies cease to exist today because they failed to adapt. In less than 10 years the landscape has been completely upended, and the companies with the best technology are winning.
The text of the full article can be found here (temporarily): http://devuc.davidlawrence.com/blog/an-examination-of-the-rare-coin-marketplace/
The above link is to a development site; ordering and bidding do not work. Once John's new web site is launched in a couple weeks, the article should be found here: http://www.davidlawrence.com/blog/an-examination-of-the-rare-coin-marketplace/
. - 2014-08-17
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