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PM Dealer question
yspsales
Posts: 2,230 ✭✭✭✭✭
Working on a business plan of sorts over on the US coin Forum.
Not a stacker in any way but was wondering about the business model of the average PM dealer.
I get that the margins are slim, but how do they physically dispose of the gold/silver purchased?
Local buyers?
Shipping to refiners?
How? Brinks.... Fed Ex?
Just some stupid and basic questions I have had....
BST: KindaNewish (3/21/21), WQuarterFreddie (3/30/21), Meltdown (4/6/21), DBSTrader2 (5/5/21) AKA- unclemonkey on Blow Out
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The dealer to dealer network is alive and well. I can buy something over the counter and have it sold to another dealer in a matter of minutes if I wanted. Most of the shipping is USPS, FedEx and UPS, depends on your insurance and who you trust.
If its scrap gold/silver, most take to a local/regional buyer who smelts and assays the material and pays out based on that. I melt and assay here at our shop for dealers around the country, costly to enter this part of the market but can pay off huge dividends over time.
Thank you for the comments!
Very helpful!
BST: KindaNewish (3/21/21), WQuarterFreddie (3/30/21), Meltdown (4/6/21), DBSTrader2 (5/5/21) AKA- unclemonkey on Blow Out
and then there's the retail side of dealing bullion.
Give Me Liberty or Give Me Debt
Slow and Painful. It SOOO much fun to sell ASE one at a time to make $1 each.
Silver .999 I can usually sell locally to buyers, Odd shape /off size crap not as much. (Refinery bound)
90% I have not had as much of that coming in lately, so I have been disposing of it locally for the time being, when overage comes, (refinery bound). Now things like Walking halves or nicer merc dimes, SLQ in nicer shape do well on ebay, but anything worn or not as nice, the margins don't work for ebay(doesn't bring any more than I can melt it for.
gold
1/10 and 1/4 age, I can sell locally, can also sell a few misc smaller world gold coins, if too many don't come at once(if so, refinery) anything larger 1/2 or bigger larger world gold, no local buyers at all, goes to refinery.
Ebay does not work on bullion for me, margins too tight except maybe a 2 1/2 0r 5 Indian. May be a $10 indian if nice.
rest goes to melt. I don't ship mine , I drive it there its about 1 hr drive for me. I am usually there twice a week. Also, my place will open for me really early in the am, so that I have time to get back in town, go to the PO, bank etc, then open the store on time. He doesn't do it for everybody, just me and a few others.
During the big run-up in gold (back around 2009) there was even a mall kiosk buying gold on the spot...for cash. I asked him about AGE's, and he offered a generous price....was tempted, but decided to hold - not sorry. He did say to call him ahead of time so he could bring the cash (My request was for ten AGE's)....At the time, that would have been a significant pile of currency. Cheers, RickO
Edit this out before someone decides to follow you to the refiner
I have copy and pasted to my note keeping section on google... feel free to edit. Very helpful explanation.
BST: KindaNewish (3/21/21), WQuarterFreddie (3/30/21), Meltdown (4/6/21), DBSTrader2 (5/5/21) AKA- unclemonkey on Blow Out
There not going to follow me to the refinery, one, they don't know where it is, secondly, I never leave from the shop direct
see you think that helps but now you are actually making it worse