Currency pricing has gotten complicated with all the auction results and dealer listings flying around. As someone who has tracked both markets for years—winning bids, buying from dealers, and selling through both channels—I learned everything there is to know about what prices actually mean. Today, I will share it all with you.
A note sells at Heritage for $5,000. The same type appears in dealer inventory for $3,200. Which price reflects reality? Short answer: both do, and understanding why helps you make smarter buying and selling decisions.
How Auction Prices Form
Probably should have led with this section, honestly: auction prices emerge from competitive bidding. Multiple interested buyers push prices upward until only one remains. That final hammer reflects what at least two bidders were willing to pay.
This dynamic can drive prices above typical retail. When two collectors have hunted a specific note for years, both may bid aggressively. The result exceeds what a dealer would charge because auction bidders may see this as their only chance—dealers assume another buyer will come along eventually.
Conversely, auctions sometimes produce below-market results. If the right collectors aren’t participating, competitive bidding never develops. A note that would interest dozens of people might sell cheaply if only two or three happen to bid that day.
How Dealer Prices Form
Dealers price based on acquisition cost, market comparables, holding expectations, and desired margins. A dealer who paid $2,000 for a note and expects to hold it six months might price it at $3,500—enough margin to cover costs and time while remaining competitive.
That’s what makes dealer pricing endearing to us planning types—it smooths volatility. Unlike auctions where two eager bidders create a spike, dealers set consistent prices based on sustained market levels. You can plan purchases without reacting to auction anomalies.
Dealers also provide services beyond the notes themselves. Authentication expertise, return policies, payment plans, and personalized guidance add value justifying premiums over auction purchases. That confidence has real worth.
When Auction Prices Run High
Trophy notes attract aggressive bidding. The finest known example of a type, notes with exceptional provenance, or pieces completing major collections command premiums exceeding normal market levels. Collectors pursuing specific pieces pay whatever necessary.
Market timing matters too. Strong economic periods see more collectors with disposable income competing. Major auction events with extensive marketing reach more potential bidders. Estate sales from famous collectors attract attention that ordinary lots don’t generate.
Grade scarcity creates premiums. A note might be common in Fine but genuinely rare in Uncirculated. When choice examples appear, collectors who insist on high grades compete intensively. The same note in lower grade might sell near guide values while the choice example exceeds them dramatically.
When Dealer Prices Make Sense
Immediate availability eliminates uncertainty. Dealer inventory you can buy today beats hoping the right note appears at auction. Time has value—collectors actively building collections often pay dealer premiums to acquire notes now rather than waiting months.
Inspection before purchase reduces risk. Examining dealer inventory reveals condition nuances that auction photographs miss. That “Extremely Fine” note might have problems visible only in person. Dealers allow examination; auction lots typically don’t.
Relationship benefits compound over time. Dealers who know your interests alert you to acquisitions before listing publicly. They may discount for regular customers or hold items during tight spots. These advantages don’t appear in price comparisons but provide real value.
Using Both Sources Effectively
Track auction results to understand market levels. Heritage archives results indefinitely, creating a historical price database. Monitoring realizations for notes you’re interested in shows price trends and identifies under- or over-priced dealer offerings.
Compare dealer prices against recent auction results. If a dealer prices a note at $1,500 but similar examples recently auctioned for $1,100, the dealer price looks high. If auction results exceeded $2,000, the dealer price represents value.
Consider total acquisition cost. Auction purchases incur buyer’s premiums (typically 20-25% of hammer) plus shipping. A $1,000 hammer price becomes $1,250+ delivered. Dealer prices often include shipping without hidden premiums. Compare final, all-in costs.
Selling Considerations
Auctions reach maximum audiences but extract fees. Seller commissions (10-15% typical) plus photography, insurance, and listing costs reduce net proceeds. A $5,000 auction result might net $4,000-4,250 after everything.
Dealer purchases provide immediate liquidity at lower prices. Dealers must profit on resale, so they buy at wholesale—often 50-70% of retail value. A note worth $5,000 retail might bring $3,000-3,500 from a dealer. The trade-off is immediate payment versus auction uncertainty.
Condition and marketability affect this calculus. Desirable notes in strong condition achieve better auction results because competition develops. Common notes or problem pieces may sell better to dealers who have customers seeking affordable examples.
The Truth About Pricing
Neither auction results nor dealer prices represent absolute truth. Both reflect specific market conditions, participant motivations, and countless variables. Market value exists as a range, not a point—both prices fall somewhere within that range.
Informed collectors use both sources to triangulate reasonable values. When auction results, dealer prices, and catalog values align, confidence increases. When they diverge significantly, investigate why—you might find opportunity or warning signs.
The “right” price is what a willing buyer pays a willing seller. Auction and dealer prices both represent valid transactions between willing parties. Neither is more “true” than the other—they’re different market mechanisms serving different needs. Understanding both helps you navigate the market more effectively.
