Mint News Blog

News, Information, and Commentary on US Mint Products

Wednesday, July 28, 2010

Price Increases Hurting Annual Set Sales?


Sales of the United States Mint's two most popular annual sets, the 2010 Mint Set and the 2010 Proof Set, debuted with lower sales compared to previous years. The increased price for each set may be one of the factors contributing to the decline.

This year's annual sets included price increases of $4 and $2 for the Mint Set and Proof Set, respectively. Both increases took place despite a reduction in the number of coins included in each set.

The 2010 Mint Set went on sale July 15, 2010. In the debut sales period through July 18, the US Mint recorded sales of 200,764 sets. In the most recent sales report covering data through July 25, sales had reached 247,085. This is a far cry from the initial sales for the 2009 Mint Set. The first reported sales figures covering October 1 to October 11, 2009 were 392,007.

Besides pricing considerations, the huge drop may have also been the result of seasonal factors, since the 2009 Mint Set was released in October rather than the slow summer months. Also, the set included the popular 2009 Bicentennial Lincoln Cents struck in 95% copper and was released following a delay, which added some anticipatory demand.

For further comparison, I went back tot he 2008 Mint Set. This year's set shows a drop in sales which is less dramatic, but still apparent. Within the initial sales period covering July 30 to August 3, 2008, the US Mint recorded sales of 234,762 for the 2008 Mint Set. If this is considered a base year, this year's sales are down 14.5%.

Examining the 2010 Proof Set, a drop in sales is also apparent, although different durations for the initial sales periods hinder exact comparisons. The 2010 Proof Set recorded sales of 296,379 during the debut period from July 22 to July 25, 2010.

The prior year 2009 Proof Set sold 437,178 units in the initial sales period covering June 1 to June 7, 2009. The 2008 Proof Set sold 424,402 units in the initial sales period covering June 24 to July 6, 2008.

It's interesting to note that the 2009 annual sets both included pricing increases, which were tolerated by collectors. The key difference was that the increased prices were viewed as necessary due to the inclusion of additional coins and the special composition Lincoln Cents. In situations where price increases are necessary and justified, the US Mint has generally provided collectors with an explanation.

Most recently, the press release for the 2009 Mint Set stated: "The price increase is due to the inclusion of the two additional quarters and the special metallic content - 95 percent copper - of the eight one-cent coins."

This year, no explanations were offered for the price increases to the annual sets. Earlier in the year, I did see an explanation for the bronze medals, which had prices increased by 60% from $3.50 to $5.50. The US Mint simply mentioned higher material costs. While this might be true, it cannot fully justify the extent of the increase.

The 2010 annual sets have actually reverted back to the same contents by denomination and metallic content as the 2008 annual sets, but prices are much higher. The table below shows the number of coins and face value for the past three years annual sets, along with the original US Mint prices.

coins face value issue price
2008 Proof Set 14 $6.91 $26.95
2009 Proof Set 18 $7.19 $29.95
2010 Proof Set 14 $6.91 $31.95




2008 Mint Set 28 $13.82 $22.95
2009 Mint Set 36 $14.38 $27.95
2010 Mint Set 28 $13.82 $31.95

The only explanation for this year's price increases that I can fathom relates to the lack of precious metals numismatic products like the Proof Gold and Silver Eagles. It seems that these products carry higher profit margins that the annual sets, which sell in higher volumes.

In the latest fiscal year, the US Mint cited the shift in demand for higher margin precious metals products to lower margin recurring products as the reason behind the 50% drop in numismatic products net income and seigniorage. As bad as things were last year, they could have been worse. To some extent the damage was offset by sales of the 2009 Ultra High Relief Double Eagle Gold Coin. Overall numismatic sales were down 21%, but excluding the UHR, sales would have been down 41%. The UHR's contribution to net income was not broken out.

With this year's schedule (so far) lacking any widely popular higher ticket items and the prospects of Proof Gold and Silver Eagles still uncertain, the US Mint's product mix has shifted even further towards lower priced items with historically low margins. This year's price increases may have been established in large part to bolster margins to make up for the income lost through the lack of precious metals numismatic products. Of course, if sales volumes fall, gains made through higher margins may be lost any way.

If this is what's behind the recent price increases, the saddest part is that effectively all collectors are being asked to pay the price for the lack of Proof Gold and Silver Eagles.
New Coin Grader Capsule: Crossover, Cross-under, or Cross-out?

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21 Comments:

At July 28, 2010 at 1:58 PM , Anonymous Anonymous said...

Three words pretty much sum it up for me.

"Satin Finish Coins"

 
At July 28, 2010 at 2:17 PM , Anonymous Anonymous said...

With the drop and quality and quantity from the mint with these sets, I've got better places to spend my money. I may pick up one of each (compared to a few in the previous years) in a few months (or not). There's just no excitement in collecting coins from the Mint anymore.

 
At July 28, 2010 at 2:43 PM , Anonymous vaughnster said...

I agree with the above post. Last year I purchased dozens of proof and mint sets due to the unique types of coins included. This year will be two of each, tops. I'm focusing my interests this year on filling in some key dates in my collection of "older" coins. Thanks U.S. Mint!

 
At July 28, 2010 at 2:56 PM , Anonymous Anonymous said...

Count me out on these. I hate to buy sets year after year, then with rare exceptions watching their collectible value drop. Dealers end up selling the sets for half or less of the price I paid to the Mint.

If I decide to get the 2010 sets later on, I can probably buy them from a dealer for at least $10 less per set than what the Mint is charging.

Granted, I know that if enough would-be buyers shy away from this one from the Mint, the sales might be low enough that the secondary market prices won't drop. However, I'm willing to take my chances!

 
At July 28, 2010 at 3:02 PM , Anonymous Anonymous said...

With the price increase on these sets and the lack of Silver Eagles, I decided to not buy any Mint products this year. As someone else said, there are better places to spend money. When the Mint produces Proof and Uncirculated Silver Eagles, I will buy.

 
At July 28, 2010 at 4:28 PM , Anonymous Anonymous said...

Additionally, the Mint is releasing these annual sets piecemeal to maximize shipping costs. I'm canceling subscriptions left and right. Not going to play their game by adding insult to injury of multiple shipping charges to the already over-inflated set prices.

 
At July 28, 2010 at 4:37 PM , Anonymous Anonymous said...

The average collector has a choice among a large selection of crappy coins from the mint. There are just too many crappy coins from which to chose. I just can't decide which crappy product to get.

 
At July 28, 2010 at 4:57 PM , Anonymous Anonymous said...

Last year I placed many orders with the Mint and did the same in 2008. I have not placed a single order this year. In my opinion, the Mint made a poor decision eliminating many offereings like the fractionals and burnished gold. Since these more profitable items are no longer made, the Mint now looks to increase profits by raising prices on what is left. The Mint has the right to do so, we have the right to say "no, thanks' and spend our money elsewhere.
Maybe somewhat related is the whole issue of "design excellence" we have heard so much about and seen so little of. Maybe the Mint should take a lesson from successful businesses- provide your customers what they want at a fair price, and provide excellence instead of continuing to repeat it is a goal.

 
At July 28, 2010 at 5:26 PM , Anonymous Anonymous said...

The numbers are going to drop after I return all my Mint sets and Proof sets due to poor quality. Most coins were spotted and many were very poorly struck. It's obvious that the US Mint cares nothing about quality of its coins. And they can have there crappy sets back for the jacked up price.

 
At July 28, 2010 at 5:28 PM , Anonymous Anonymous said...

Sage words from Grandpa: "Spend your money where and when it's treated best!"

It's not unAmerican to decide to engage in a personal BOYCOTT of overpriced, unimaginative, junk. Nearing 50 years of buying and collecting coins and sets direct from the Mint makes the worthlessness of current offerings blatently apparant. I refuse to be insulted by a lackluster Governmental entity. Sad, but true. ~ Grandpa

 
At July 28, 2010 at 5:45 PM , Anonymous Anonymous said...

The Moy Mint remains clueless... they force collectors to choose between buying overpriced UGLY coins and not buying at all.
Guess which choice makes the most sense..?

 
At July 28, 2010 at 6:01 PM , Anonymous The Dude said...

RIPOFF

 
At July 28, 2010 at 6:57 PM , Anonymous Anonymous said...

This year's penny is okay, but the quarters are "over the top" cliche-ish. I think it would have been neat if the Mint would have did a throw-back to the wheaty for one year. Oh well...

 
At July 28, 2010 at 7:22 PM , Anonymous Anonymous said...

Overpriced circus coins. The new quarters program makes me want to vomit. Keeping same theme coins gives America a sense of stability. BRING BACK THE EAGLE!!!
Mr. Moy, you are a con artist with the prices of the mint sets. PLEASE resign and take your talents to South Beach!
I do admit liking the '10 Lincoln cent reverse.

 
At July 28, 2010 at 8:13 PM , Anonymous Anonymous said...

Mike - Any chance of you or someone in Numismatics trying to get an interview w/ Mr. Moy. I think there are a lot of enthusiasts who need definitive answers on Mint pricing. Seems like a lot of disgruntled collectors are voting with their pocketbooks

 
At July 28, 2010 at 8:30 PM , Anonymous Anonymous said...

The mint probably thought that if they raised the price they would sell more sets.

Duh.

 
At July 29, 2010 at 3:57 AM , Anonymous Anonymous said...

Almost a 50% increase for a mint set over two years? What a bunch of crap! We want answers! We want accountability!

 
At July 29, 2010 at 5:12 AM , Anonymous Anonymous said...

I am picking up the Proof set only to fill the holes in my albums. This is probably the last year I will do so as I can see another increase next year, and I am at my limit of patience and understanding.

I have serioulsy considered selling everything and getting out of coin collecting altogether. Between the rip offs on ebay, doctored coins, greedy dealers (not all, but enough), TPG grading games and costs, and the mint price increases, it is almost impossible to enjoy this hobby anymore!

 
At July 29, 2010 at 5:30 AM , Anonymous Anonymous said...

I think the comments over all coins not made of gold and silver being "crappy" are way overblown. I don't think I've seen a single thread where someone has not declared that product X is crap because there are no gold and silver eagles. Most of the coin sets I've ordered from the Mint this year have been of average to good quality.

With that having been said, I agree the price increases are ridiculous (though expected given the state of the government and economy right now), but to write off every non-gold and non-silver product as "crap" is a ridiculous overreaction, to say the least...

 
At July 29, 2010 at 5:39 AM , Anonymous Anonymous said...

Hopefully the US Mint Pricing is the next bubble to burst!

 
At July 29, 2010 at 6:45 AM , Anonymous JA said...

I feel exactly the same. At this time last year, I had placed multiple orders for Sacagawea's, Kennedys and many other offerings. In 2010, I have not placed a single order for a mint product.

I cannot justify paying more and more for less and less in return.

It does seem like they feel they have a cash cow and they set out to get even more out of it via the price increases --- totally disregarding and taking advantage of the love that coin-collectors have for their hobby.

I am not ready to sell my coin collection just yet but as I stated earlier this year on several posts, I am ready to be much more selective about my purchases and it appears the rest of the coin collecting community feels the same.

 

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