Sunday, November 13, 2011

Buying Panda Coins on Ebay

Chinese Pandas have very low mintages compared to US modern coins, and they are dispersed widely around the the world. Ebay is one of the few places where a large number of Pandas are available for sale 24/7, worldwide.

Ebay and its subsidiary Paypal have significant strengths and weaknesses that are important for anyone trading Chinese coins to understand.

Ebay Strengths
  • Worldwide market with many coins listed
  • An large pool of active buyers and sellers of Chinese coins 
  • Fees that are lower than most major coin auction houses like Heritage and Bowers
  • Paypal has excellent buyer and seller protections against fraud
Ebay Weaknesses
  • The seller rating system is not sophisticated and doesn't communicate a sellers character.
  • Unknowledgeable sellers and expert sellers are difficult to distinguish
  • It can be difficult to identify problem coins vai photos alone.
  • Scammers occasionally sneak by ebay screening systems, especially in China, and collecting on buyer protections can be a hassle.
  • Ebay and Paypal fees are still quite high compared to face-to-face deals.
How to use Ebay and Paypal for buying coins

Ebay is excellent for connecting buyers and sellers of chinese coins. Finding coins to buy and comparing prices has never been easier.

Paypal provides fraud protection for both buyers and sellers.  If a seller's coin is not as advertised, or not delivered. a buyer can get refunded by Paypal if the seller is uncooperative.  Similarly, if a buyer doesnt pay, files a fraudulent chargeback, or tries to use a stolen credit card, Paypal will cover the loss.  This very valuable feature allows both parties to have the confidence to make high value transactions online.

Nevertheless, be cautions of sellers like these:
  • A history of selling $2 trinkets and then suddenly start selling $2000 coins
  • Gold coins selling under spot
  • Photos that are "stock" or copied from another seller
  • Photos that are not of the exact coin
  • Blurry or dark photos
  • Prices that are way out of line from other sellers or the price trend.
Although you are protected by Paypal, it is still a hassle to have to wait for disputes to be resolved.

We also recommend buying Pandas certified by PCGS or NGC only, unless you are very knowledgeable and can identify fakes, or you are working with a seller who you trust to identify fakes for you.  This will be very important when it comes time to sell. 

Ebay and Paypal Fees

The seller pays all Ebay and Paypal fees.

Ebay Powerseller fees vary from 11% for items under $50 and drop to about 2.3% ($114) for a $5000 fixed price item.  New ebay sellers will pay 20% more ($137 on $5000) until they are established.

Paypal fees depend on monthly volume.  About 2.9% for low volume sellers scaling to 1.9% for those processing more than $100K per month.  Typically, its about $110 on a $5000 coin.

Overall, the seller has to carry at least 5% in fees on a sales over $1000.  In a business where margins are often 5% or less, this is a huge tax.  As a business necessity, very often this fee is embedded in the listed price. It effectively inserts 5% into the bid/ask spread that buyer will have to pay.

Clearly, the value of Ebay and Paypal services are diminished once buyer and seller know and trust each other.  Ebay and Paypal fail to consider trusted party transactions in their current pricing structure.  As a result, many sales go "offline" in order for reasonable deals to be made.

How to save 5%

If you already have a good relationship with a seller, you may want to ask the seller if he has any coins he can sell "off-line" with a payment by check in exchange for a price discount of 4-5% off a comparable Ebay listed item.  The seller will net the same amount and you save a few hundred dollars!

It is against Ebay policy to negotiate off-line sales through the Ebay message system, or to renegotiate items already purchased through Ebay.  However Ebay does not have jurisdiction over sales conducted entirely outside of Ebay.  So it is best to use the sellers direct email address or a phone call to make this kind of deal.  Ask if he has any other coins like the one you saw on Ebay, but at a lower price.

Note that you will not have the Ebay/Paypal buyer protections, so be sure you trust the seller to deal fairly.

Until Ebay and Paypal adjust fees to better match the needs of the coin market, this is a good way to pay less for good coins from reputable sellers.


Many of the best coins will be listed at a fixed price, waiting for a discerning collector to come along.  However, sometimes Pandas come up or sale on Ebay as an auction rather than at a fixed price.  There are three reasons why a seller would use an aution.
  1. the market is hot or the coin is very rare and he hopes that his coin will be bid higher than previous sales
  2. he doesn't know what the coin is worth and lets the auction decide
  3. he doesn't care to maximize his selling price and just wants to liquidate quickly
Mass marketers and pawn shops sometimes dump coins onto ebay to raise cash or take a quick profit.  If too many are sold at once, or the auction ends at 3:00am, there are not enough cash-ready buyers online to bid for everything.  High-end auctioneers like Heritage manage auctions to maximize prices, but Ebay is unmanaged.  This can be a short term buying opportunity for savvy buyers.

Sometimes coins are underbid because the coin has problems or the seller is unkown to collectors.  Sellers who "dont know" or "dont care" about pandas, may not be able or willing to properly disclose issues and stand behind their coins.

Auctions can be fun and sometimes good bargains can be found.  However, a relationship with a good dealer can help you avoid costly mistakes.

Sunday, November 06, 2011

Panda Coin Buying Opportunity

Like any market, the Panda coin market goes through short term cycles.  After very powerful moves in spring and summer of 2011, it looks like this fall is a time of consolidation.  With a pull-back in gold from $1950 down to the 1600's, many newer entrants in the market are now hesitating.  Some are selling. Did the market peak?  Will pandas go down from here?

Whatever the reasons, there are now many excellent quality Pandas available on the market, and overheated prices have pulled back.  Key dates and rarities are still quite strong and going higher, but many excellent coins are now re-appearing at good prices.

The old-timers and market savvy collectors see pull-backs as a prime opportunity to find good deals.  Major dealers are happily re-stocking at bargain prices.  This is the time to buy!

Chinese dealers are buying in full force, raiding US inventories for any gold panda from 1990 to 2003.  Certain dates are targeted for accumulation, including 2000 to 2003 gold panda sets. They know to strike when the coins are available, and they are expecting renewed Chinese market strength in December and January. 

Gold fundamentals are stronger than ever.  We will see $2000 gold soon.  The European debt crises illustrates how deep the economic rot has become worldwide.  Chinese investors are looking to store wealth outside of the weakening real-estate sector and outside of paper currencies.  This trend will continue. 

Key coins to watch:
  • 1989 BU Gold, all sizes (maybe not as common as we thought!)
  • 1989-P proofs
  • 1990-P proofs 
  • 1992 and 1993 still in thin supply
  • 2000 frosted (1oz and 1/2 already pushing $3000), all sizes
  • All 1/2oz Pandas

High Flyers - look for deals that wont last:
  • 1998 small and large dates
  • 1999 all types still strong
  • 1995 - ready to catch up to 1998?
  • 91, 92, 93 and 94 proof sets are still being acquired by strong hands