Auction vs. Dealer Sale: Which Gets You More for Your Currency

You’re ready to sell part of your collection. The auction house wants 15% commission plus fees. The dealer offers immediate cash at 60% of retail. Which approach actually puts more money in your pocket? Understanding selling options helps collectors maximize returns when the time comes to liquidate.

Auction House Sales

Major auction houses like Heritage, Stack’s Bowers, and Lyn Knight reach maximum collector audiences. Their catalogs, marketing, and established customer bases expose your notes to serious buyers worldwide. For significant material, this exposure translates into competitive bidding and strong prices.

The costs are substantial. Seller commissions typically run 10-15% of hammer price. Photography fees, insurance, and cataloging costs add more. Buyer’s premiums (20-25% added to hammer price) come from buyers but affect what they’re willing to bid. All-in costs might reduce net proceeds by 25-35% compared to hammer prices.

Timeline extends months. Consignment, photography, cataloging, auction scheduling, and post-sale settlement create 3-6 month waits between consigning and receiving payment. If you need money quickly, auction sales don’t provide it.

When Auctions Excel

Rare and high-value notes justify auction costs. A $10,000 note selling through Heritage might hammer at $12,000 thanks to competitive bidding, netting $10,000+ after fees. The same note sold to a dealer might bring $6,000-7,000 immediately. Auction exposure created $3,000+ in additional value.

Exceptional quality attracts auction premiums. Choice Uncirculated examples of desirable types generate collector competition. When multiple bidders want the finest known example, prices exceed retail estimates. Dealers can’t replicate this competitive dynamic.

Collections with strong provenance or assembled sets benefit from auction presentation. A complete type set sells better at auction than piecemeal dealer sales because collectors appreciate assembled groupings. The collection becomes more than the sum of its parts.

Dealer Purchases

Dealers buy at wholesale to profit on retail resale. Typical dealer offers range from 50-70% of retail value, depending on the material’s marketability, the dealer’s inventory needs, and your negotiating position. This sounds like a steep discount, but context matters.

Immediate payment provides certain value. Cash in hand today beats auction proceeds in six months. The time value of money, the elimination of auction uncertainty, and the freedom from ongoing process management all have real worth.

Transaction simplicity appeals to many sellers. No photography, no cataloging, no waiting for auction dates, no post-sale settlement delays. You show the material, negotiate price, receive payment, and walk away. For sellers who value their time, this efficiency matters.

When Dealers Make Sense

Common material doesn’t justify auction costs. A note worth $100 retail might hammer at $80 at auction, netting $65-70 after fees. A dealer paying $60 provides nearly the same result without months of waiting. Auction economics don’t favor low-value items.

Large quantities of mid-range material may sell better to dealers. Auction houses can’t efficiently handle hundreds of $50-200 notes. Dealers who specialize in volume purchasing can absorb this material at fair wholesale prices when auction consignment isn’t practical.

Speed requirements favor dealers. Needing funds quickly—medical expenses, home purchases, debt obligations—makes auction timelines impossible. Dealers provide liquidity that auctions can’t match.

Hybrid Approaches

Sell different portions differently. Consign your finest notes to auction while selling common material to dealers. This approach optimizes for each item’s characteristics—auction exposure for notes that benefit from competition, dealer efficiency for volume material.

Use dealers for authentication before auction. Have knowledgeable dealers evaluate your collection. Their assessments help identify which pieces warrant auction investment and which should sell directly. Some dealers provide this service hoping to purchase what doesn’t go to auction.

Consider consignment to dealers. Some dealers accept consignment, selling on your behalf for commission rather than purchasing outright. This approach provides dealer expertise and retail pricing without the wholesale discount, though commissions and time to sale vary.

Negotiating with Dealers

Get multiple offers before accepting any. Three or more dealer evaluations reveal market pricing and identify who values your specific material most highly. Different dealers have different customer bases; your material might fit one perfectly while others can’t use it.

Understand that offers vary legitimately. A dealer who just sold a similar note doesn’t need yours; one who has a customer waiting will pay more. Variations in offers reflect business circumstances, not dishonesty. Shop around to find favorable circumstances.

Know your material’s value before negotiating. Catalog values, recent auction results, and asking prices from similar dealer stock establish reference points. Dealers respect prepared sellers and offer better prices to those demonstrating market knowledge.

Making Your Decision

Calculate net proceeds realistically. Auction estimates aren’t guarantees—notes can sell below estimates, especially in soft markets. Apply commission rates to conservative estimates rather than wishful projections. Compare these realistic auction nets against dealer offers.

Factor in your time and hassle tolerance. Auction consignment requires effort—selection, shipping, follow-up, settlement tracking. Dealer sales require showing up and negotiating. Which process better fits your life circumstances?

Consider your ongoing collecting relationship. If you’ll continue buying from a dealer, fair transactions in both directions build valuable relationships. Squeezing maximum price from someone you’ll want to buy from next month may not serve long-term interests.

Neither auction nor dealer sale is universally superior. Each approach suits different circumstances, different material, and different seller priorities. Understanding both options lets you choose appropriately for each selling situation you encounter.