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TexMetals Inventory Update See Bold Text
C0INB0Y
Posts: 627 ✭✭
Got this Email Update last night:
Update, 5/1/13:
Dear TexMetals Customers:
I want to provide you with a brief update on TexMetals inventory, and answer some common questions from clients over the past week or so. To begin, we have received (and will continue to receive) silver shipments this week. We have newly added to the website:
1 oz Golden State Mint Silver Bars
10 oz NTR Silver Bars
100 oz RCM Silver Bars
Texas Silver Round Monster Boxes
Canadian Silver Maple Monster Boxes
On Friday morning (May 3rd), we will release 15,000 silver american eagles at 8am CST. In a previous email, I commented that we would release silver eagles every week on Tuesday morning, but last week we offered two releases - one on Tuesday and one on Friday - because we were able to pull in stock early. Moving forward, it is likely that Friday will become the norm for the weekly release of eagles.
To answer a few questions:
Why are you not selling quantities less than 500 ozs of silver?
This is not entirely true. We are selling less than 500 ozs on certain products, namely: 1 oz GSM bars, 10 oz Kookaburra, and Kilo Koala. We anticipate offering 10 oz NTR bars and Texas Silver Rounds in smaller denominations early next week.
In general, during times of extreme shortages, any order size restriction we impose is either a function of extreme demand or logistics issues. We use several vaults throughout the US to store our metal. All US Mint and Canadian Mint products originate on the East Coast and are trucked down to Texas. Some of the private mints send product from California and Utah. One of the secrets to keeping a three-day shipping window is to reduce the transit time of inventory, and therefore we sometimes ship to clients directly from our third-party vaults rather than pulling all inventory to our central hub in Texas. However, we limit this process to orders of certain sizes. Orders involving "broken boxes" or smaller units always ship from our vault in Texas given the care required to package and count product. Under present conditions, we are often selling out of inventory faster than we can truck it down to Texas.
Last week, on Tuesday, we offered 15,000 silver eagles on our website, and they sold in 8 minutes. On Friday, we sold another 15,000 in 4 minutes. All orders sold as monster boxes. The demand is so greatly outstripping supply that we do not have the option of offering smaller quantities. It is an unfortunate by-product of current market dynamics, and we are empathetic to our longtime clients who dollar-cost-average in smaller denominations.
When will inventories return to normal?
It is difficult to speculate. As gold and silver begin trading in a narrower range, buying pressure tends to ease a bit. However, the mints are so far behind the demand curve after last month's activity, that we expect at least 6-8 weeks before inventories return to normal. This, of course, assumes no further significant movements in spot price. A strong move downward into the sub-$21 range in silver would perpetuate longer lead times and rising premiums.
When will premiums return to normal?
Premiums are a true barometer of supply and demand in the physical market. When equilibrium is skewed in one direction or another, premiums either reach a minimum baseline above cost (supply exceeds demand) or rise greatly in a type of silent auction (demand exceeds supply). We are experiencing the latter phenomenon now, and premiums will not retreat until supply and demand return to a state of equilibrium.
We appreciate our customers greatly. These messages are intended to keep all of our clients updated on the latest information. If you have questions, please do not hesitate to call or email.
Sincerely,
Jason Kaspar,
CEO, Texas Precious Metals
Update, 5/1/13:
Dear TexMetals Customers:
I want to provide you with a brief update on TexMetals inventory, and answer some common questions from clients over the past week or so. To begin, we have received (and will continue to receive) silver shipments this week. We have newly added to the website:
1 oz Golden State Mint Silver Bars
10 oz NTR Silver Bars
100 oz RCM Silver Bars
Texas Silver Round Monster Boxes
Canadian Silver Maple Monster Boxes
On Friday morning (May 3rd), we will release 15,000 silver american eagles at 8am CST. In a previous email, I commented that we would release silver eagles every week on Tuesday morning, but last week we offered two releases - one on Tuesday and one on Friday - because we were able to pull in stock early. Moving forward, it is likely that Friday will become the norm for the weekly release of eagles.
To answer a few questions:
Why are you not selling quantities less than 500 ozs of silver?
This is not entirely true. We are selling less than 500 ozs on certain products, namely: 1 oz GSM bars, 10 oz Kookaburra, and Kilo Koala. We anticipate offering 10 oz NTR bars and Texas Silver Rounds in smaller denominations early next week.
In general, during times of extreme shortages, any order size restriction we impose is either a function of extreme demand or logistics issues. We use several vaults throughout the US to store our metal. All US Mint and Canadian Mint products originate on the East Coast and are trucked down to Texas. Some of the private mints send product from California and Utah. One of the secrets to keeping a three-day shipping window is to reduce the transit time of inventory, and therefore we sometimes ship to clients directly from our third-party vaults rather than pulling all inventory to our central hub in Texas. However, we limit this process to orders of certain sizes. Orders involving "broken boxes" or smaller units always ship from our vault in Texas given the care required to package and count product. Under present conditions, we are often selling out of inventory faster than we can truck it down to Texas.
Last week, on Tuesday, we offered 15,000 silver eagles on our website, and they sold in 8 minutes. On Friday, we sold another 15,000 in 4 minutes. All orders sold as monster boxes. The demand is so greatly outstripping supply that we do not have the option of offering smaller quantities. It is an unfortunate by-product of current market dynamics, and we are empathetic to our longtime clients who dollar-cost-average in smaller denominations.
When will inventories return to normal?
It is difficult to speculate. As gold and silver begin trading in a narrower range, buying pressure tends to ease a bit. However, the mints are so far behind the demand curve after last month's activity, that we expect at least 6-8 weeks before inventories return to normal. This, of course, assumes no further significant movements in spot price. A strong move downward into the sub-$21 range in silver would perpetuate longer lead times and rising premiums.
When will premiums return to normal?
Premiums are a true barometer of supply and demand in the physical market. When equilibrium is skewed in one direction or another, premiums either reach a minimum baseline above cost (supply exceeds demand) or rise greatly in a type of silent auction (demand exceeds supply). We are experiencing the latter phenomenon now, and premiums will not retreat until supply and demand return to a state of equilibrium.
We appreciate our customers greatly. These messages are intended to keep all of our clients updated on the latest information. If you have questions, please do not hesitate to call or email.
Sincerely,
Jason Kaspar,
CEO, Texas Precious Metals
I was ‘COINB0Y' with 4812 posts and ‘Expert Collector’ ranking (Joined in 2006).
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Comments
I wonder what their "third party" counterpart is, do they actually have multiple vaults or are they talking about from the people that they buy their PMs from?
Anyway, nice e-mail.
Thanks for sharing,
Ray
<< <i>That's a well thought out e-mail, thanks for sharing. From a business point of view, their explanation is logical. If they can sell a monster box at their premiums and have only one shipping cost, then they save a lot of my and time by shipping the monster. The down side is us little guys (Talking about myself) that can not not do such a large purchase.
I wonder what their "third party" counterpart is, do they actually have multiple vaults or are they talking about from the people that they buy their PMs from?
Anyway, nice e-mail.
Thanks for sharing,
Ray >>
If they buy [say 100,000 ounces] from say Sunshine Mint, they might choose to pay SM a fee to hold/store the order for a short time rather than receive it or if they get a big order like 50,000 ounces it makes sense to drop ship it directly from SM. No sense paying double shipping and waste time getting it in and sending it out. This also makes sense for those who place large orders, but aren't quite large enough to meet the minimum at a place like SM.
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