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Would a Coin Shop EXCEL OR DIE??

I was talking to a buddy last night about the LCSs in our area and we were wondering:

If a coin shop said screw it and offered to buy Generic Silver for Spot +$1 and sell for Spot +$2-3 Guaranteed. Would they be the #1 shop in town? Would they get too much business selling? Would the other shops rally to close them down?

We thought they would be highly respected and supported by this community BUT that other shops would hate them forever.

ANY THOUGHTS???

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Comments

  • rickoricko Posts: 98,724 ✭✭✭✭✭

    Your thoughts are likely accurate, plus, they would soon go out of business due to financial losses. Cheers, RickO

  • JDsCoinsJDsCoins Posts: 135 ✭✭✭

    Do you think enough people would come to them to sell that even with a profit of only 5-10% compared to the norm of like 30% profit, they could survive?

  • tincuptincup Posts: 4,721 ✭✭✭✭✭

    Have to agree... won't meet the rent and expenses and will soon close!

    ----- kj
  • tincuptincup Posts: 4,721 ✭✭✭✭✭

    Also... suspect there would be potential buyers lined up outside.... a long line of individuals wanting to buy.... but a very short line, if any.... of sellers.

    ----- kj
  • JDsCoinsJDsCoins Posts: 135 ✭✭✭

    I guess that begs the question of what are your LCSs Buying silver for?

    Mine are only paying Spot -$1 Roughly at the moment

  • jmski52jmski52 Posts: 22,263 ✭✭✭✭✭

    Arbitrage would happen.

    They would end up either selling all they have while not being able to buy more, or they would end up running out of cash while buying a ton while not being able to sell much.

    Then, the market would go elsewhere. The best marketmakers maintain a low spread while still being able to conduct business both buying and selling.

    That might fit your scenario (buy @ +$1 and sell @ +$2 or $3) if the market was very stable with not much movement up or down, but in today's market arbitrage would happen.

    Q: Are You Printing Money? Bernanke: Not Literally

    I knew it would happen.
  • cohodkcohodk Posts: 18,493 ✭✭✭✭✭

    A Coin Shop is the best!!

    Excuses are tools of the ignorant

    Knowledge is the enemy of fear

  • JDsCoinsJDsCoins Posts: 135 ✭✭✭

    So if the economy is stable you think that a coin shop that offered a never changing spot + price would do good??

    And #cohodk you think it would be the best?

  • jmski52jmski52 Posts: 22,263 ✭✭✭✭✭

    So if the economy is stable you think that a coin shop that offered a never changing spot + price would do good??

    Precious metals prices aren't stable now, so it's a moot point right now. Reliance on a tight spread in a wildly volatile market opens up too much risk if the market turns against you.

    If prices were a lot more stable, a smaller buy/sell spread would at least be competitive and that should generate more foot traffic which could conceivably give the shop a better chance at survival.

    Q: Are You Printing Money? Bernanke: Not Literally

    I knew it would happen.
  • JDsCoinsJDsCoins Posts: 135 ✭✭✭

    Oh yeah just thinking, me and a few friends were discussing the issue the other night and I wanted to open it up to the community ☺️

  • ctf_error_coinsctf_error_coins Posts: 15,407 ✭✭✭✭✭
    edited December 3, 2022 10:53AM

    Money losing venture.

    If you get really high volumes of of trades, just think of how much money you could lose.

  • JDsCoinsJDsCoins Posts: 135 ✭✭✭

    True true good points everyone

  • streeterstreeter Posts: 4,312 ✭✭✭✭✭

    A friend of mine has another concept. He starts every morning with $250,000 liquid, either cash or bank balance. His goal is to make 10% on that ($250,000) balance.
    4pm rolls around and most of what he buys is gone, either to locals or shipped to market makers. He keeps only that which fits his business plan.
    His goal is to be liquid tomorrow morning. I suppose it takes several times the 250k to be liquid everyday but once you get capital it's just rinse, lather, rinse, repeat. You might be able to start out with 50k x 4 days to get the cycle rolling.

    All you need is a good location and a great satisfied customer base.

    Have a nice day
  • cohodkcohodk Posts: 18,493 ✭✭✭✭✭

    @JDsCoins said:
    So if the economy is stable you think that a coin shop that offered a never changing spot + price would do good??

    And #cohodk you think it would be the best?

    A Coin Shop is owned by one of our forum members. He's a straight shooter.

    However, the coin shop in your example would fail miserably.

    Excuses are tools of the ignorant

    Knowledge is the enemy of fear

  • BaleyBaley Posts: 22,658 ✭✭✭✭✭

    "But, but.. these ones are Worth More!! They got dat *Collectibles Premium to 'em!"

    Liberty: Parent of Science & Industry

  • GRANDAMGRANDAM Posts: 8,337 ✭✭✭✭✭

    @JDsCoins said:
    I guess that begs the question of what are your LCSs Buying silver for?

    Mine are only paying Spot -$1 Roughly at the moment

    What are they selling at?

    GrandAm :)
  • JDsCoinsJDsCoins Posts: 135 ✭✭✭

    Mine are selling for spot +$6 roughly

  • TwoSides2aCoinTwoSides2aCoin Posts: 43,757 ✭✭✭✭✭

    Thanks for the plug. Excelling in bullion ? Nah. I just paid over two thousand dollars for under a half ounce of silver. A circulated walking liberty half. Okay, it's Gutter metal/junk silver in some eyes. (Numismatics is the flip side )
    More recently paid a customer spot plus two bucks for silver rounds. Turned around and sold em for spot plus five. Normally (lately) I have to pay more (ordering) ....and wait longer for delivery.

    In my case I don't want to excel or die. We do get a choice. I have a pace. Very slow.
    My advice : have fun @ work&play

  • blitzdudeblitzdude Posts: 5,282 ✭✭✭✭✭

    A $2K WLH is numismatic a +$2 round is certainly gutter metal.

    PS premiums have begun the drop. Spot -$ soon. RGDS!

    The whole worlds off its rocker, buy Gold™.

  • jmski52jmski52 Posts: 22,263 ✭✭✭✭✭

    premiums have begun the drop. Spot -$ soon. RGDS!

    And I would venture to say that when premiums are dropping, the spot price will be rising, significantly.

    Q: Are You Printing Money? Bernanke: Not Literally

    I knew it would happen.
  • cohodkcohodk Posts: 18,493 ✭✭✭✭✭

    @jmski52 said:
    premiums have begun the drop. Spot -$ soon. RGDS!

    And I would venture to say that when premiums are dropping, the spot price will be rising, significantly.

    Now that's something to get excited about.

    Excuses are tools of the ignorant

    Knowledge is the enemy of fear

  • TwoSides2aCoinTwoSides2aCoin Posts: 43,757 ✭✭✭✭✭

    @blitzdude said:
    A $2K WLH is numismatic a +$2 round is certainly gutter metal.

    PS premiums have begun the drop. Spot -$ soon. RGDS!

    Look bro, if yo want to call silver gutter metal, I suspect a lot of aluminum gutter companies are bound to raise prices of install to $20 per foot. Try leaf guard , if ya think silver is cheap. Contractors love your thinking.

  • blitzdudeblitzdude Posts: 5,282 ✭✭✭✭✭

    @TwoSides2aCoin said:

    @blitzdude said:
    A $2K WLH is numismatic a +$2 round is certainly gutter metal.

    PS premiums have begun the drop. Spot -$ soon. RGDS!

    Look bro, if yo want to call silver gutter metal, I suspect a lot of aluminum gutter companies are bound to raise prices of install to $20 per foot. Try leaf guard , if ya think silver is cheap. Contractors love your thinking.

    Gutter is on the side of the street not the side of a house. As for leaf guard I use them and they were installed myself, no contractor needed. Happy New Year. RGDS!

    The whole worlds off its rocker, buy Gold™.

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