The Perth Mint recently updated their numismatic sales figures. I have taken a look at these figures in the past, but it is always surprising to see just how low sales can be for some offerings.
To highlight and discuss, I compiled a list of the 2011 and 2010-dated coins which have the lowest sales figures. These are shown below along with the indicated maximum mintage.
As can be seen, sales are as low as 20 pieces for some of last year’s releases, and 18 out of 20 on the two lists are below 100 pieces.
|2011 Coins with Lowest Sales Figures|
|2011 1/2 oz Platinum Proof Dingo||20||1,000|
|2011 1/2 oz Platinum Proof Emu||20||1,000|
|2011 1/2 oz Platinum Kookaburra||21||1,000|
|2011 1/2 oz Platinum Tasmanian Devil||21||1,000|
|2011 1/2 oz Platinum Great White Shark||24||1,000|
|2011 2 oz Gold Proof Koala||48||250|
|2011 1/2 oz Gold Proof Dingo||54||1,000|
|2011 1/2 oz Gold Proof Emu||57||1,000|
|2011 1/2 oz Gold Proof Tasmanian Devil||60||1,000|
|2011 1/2 oz Gold Proof Great White Shark||62||1,000|
|2010 Coins with Lowest Sales Figures|
|2010 1/2 oz Platinum Proof Platypus||29||1,000|
|2010 1/2 oz Platinum Proof Wombat||29||1,000|
|2010 1/2 oz Platinum Proof Lizard||32||1,000|
|2010 1/2 oz Platinum Proof Crocodile||32||1,000|
|2010 1/2 oz Gold Proof Platypus||72||1,000|
|2010 1/2 oz Gold Proof Wombat||73||1,000|
|2010 1/2 oz Gold Proof Lizard||78||1,000|
|2010 1/2 oz Gold Proof Crocodile||78||1,000|
|2010 1 kg Silver Diamond Eyes Tiger||300||5,000|
|2010 1/2 oz Platinum Proof Koala||283||1,000|
All of these coins still remain available for purchase. Here are the pages for the 2010-2011 Platinum Discover Australia Coins, the 2010-2011 Gold Discover Australia Coins, and the 2010 1 kg Silver Diamond Eyes Tiger. The 2011 2 oz. Gold Proof Koala is listed as “Sold Out”, but this may have something to do with the exclusive distributor situation for the coin.
Over on the US Mint Blog, I have periodically taken a look at coin offerings with low sales levels since these can translate to low final mintages, which in some cases lead to substantial price appreciation on the secondary market. This type of informed speculation is possible since there are legislative restrictions on when the United States Mint can strike each coin. Numismatic coins are struck initially or periodically throughout the year based on demand forecasts. After the year closes, additional coins cannot be struck, but the US Mint can continue to sell coins from remaining inventory. Once this inventory is exhausted, the coins are “sold out” and the final mintage can be far below the initial authorized maximum mintage. (For US commemorative coins a firm sales ending date occurs near the end of the year. )
For Perth Mint offerings the situation is different. Based on answers I have received from their sales manager via the public relations manager, the Perth Mint does not have any limit on how long a particular coin can be offered as long as the maximum mintage is not sold. “If The Perth Mint has stock of a particular release, it will continue to sell it until the stock is depleted.” Additionally, even if the stock is depleted, the Perth Mint has the authority to strike additional coins to fulfill demand, again provided it does not exceed the maximum mintage. “The Perth Mint can back mint on any issue provided the release has not reached its mintage.”
Effectively, the Perth Mint has the ability to offer any particular collectible coin indefinitely, as long as sales have not reached the maximum mintage. This changes the perception of the low sales figures from potential low mintage to an open-ended mintage up to a very high maximum.
While this situation might be beneficial for collectors who choose to add prior year releases to their collection, it puts a damper on speculative buying activity related to potential low mintages, which can be a powerful source of demand. After the US Mint unexpectedly sold out of the Lucy Hayes Gold Coins at a level that would represent a new mintage low for the series, sales of the Lucretia Garfield Gold Coin jumped by more than 500 in a week, compared to single digit sales for most prior weeks.
Another factor to consider is that once a year has closed, sales for prior year products tend to diminish to minimal levels. Older products fall off collector’s radar, as the newer releases take focus. As a result, the incremental sales benefit of leaving coins available for an extended period of time is limited. The number of coins sold during the later years might not come close to the sales achieved in the initial weeks or months.
Finally, for collectors who did purchase the coins, the continued availability from the Perth Mint puts a cap on any potential secondary market appreciation for their holdings. As long as the coins remain available from the original source, there is no impetus to drive market prices higher. While this is not the sole motivation of most collector purchases, it is always nice to see your coins appreciate in value.
In my opinion the situation for prior year Perth Mint products with historically low sales could be handled better. By the following one of the two strategies below, I believe the Perth Mint could achieve incrementally higher sales for these type of products, as well as foster a better environment for secondary market price appreciation, which would benefit collectors as well as longer term sales trends.
Hold a “Last Chance” Sale – Within an established format, periodically announce the last chance to buy certain products. For example, it can be announced that all 2010-dated products will only remain available for sale until December 31, 2012. After this date, remaining inventory would be melted and final mintages announced. During the sale, collectors would have some renewed focus on these largely forgotten products, likely with particular interest in some the coins with the lowest reported sales. After the conclusion of the last chance sale, secondary market prices may rise for the coins with the lowest final mintages, benefiting collectors. The Perth Mint would benefit from a final burst of sales and may also see a positive impact for subsequent issues.
Establish Minimal Mintage Levels – If sales for a particular product type have historically been very low, establish the maximum mintage for future issues just above the base level of demand. For example, if a mintage limit of 50 or 100 coins had been established for the 2011 1/2 oz Platinum Proof Coins, this exceptionally low number would likely entice more collectors and potentially lead to a sell out. From the Perth Mint’s perspective, total sales could be 2X to 4X greater than if the higher maximum mintage was set. From collector perspective, a sell out and a low mintage might set up for secondary market appreciation.
I believe that the Perth Mint does an excellent job creating and offering their silver products at reasonably established maximum mintage levels. Many of these experience an exciting release, relatively quick sell out, and secondary market price appreciation. On the other hand, some of the Perth Mint’s higher end gold and platinum products tend to have maximum mintages that are too high, which combined with open ended production, serves to impede sales. I think the two strategies discussed above could improve the situation for both the Perth Mint and collectors.