Why coin dealers drink--Part CCCCXXXVI

CaptHenway

From the dealer-to-dealer network:



"Telephone Call of the Week. Got a call from an old local Jeweler,

who I have not heard from in about 25 years or so. She wants to buy

some 1 oz. American Gold Eagles and wanted to know how much over spot

I charged. Told her they would be in the $50-60 range over spot, and

she whined that it was WAY TOO MUCH over spot, and why would anyone

want to pay that much for gold over spot. I asked her about the 14K

GOLD chains that they used to buy at $100.00 and then retail with a

Keystone of 300-400%, and why would anyone buy that gold for so much

over spot? She replied, "Oh that works", but why would anyone pay

such a big premium over spot for a 1 oz. Gold Eagle. Told her the

United States Mint does not sell 1 oz. Gold Eagles at spot, and

charges a small premium over spot, and again reminded her about "Keystoning".

But she still insisted the premium was way too high."



Interesting use of the terms "keystone" and "keystoning" for markup. Any body know why those terms are used in the jewelry business?



TD

BStrauss3

Double keystone refers to an item that is wholesaled at 50% of the retail price, tripple keystone refers to an item wholesaled at 1/3 of retail.

Staircoins

Any body know why those terms are used in the jewelry business?

The term "keystoning" was first used in 1896 by Keystone magazine, a predecessor of Jewelers' Circular-Keystone (now JCK), a popular jewelry industry trade rag. The original name of the magazine is thought to reference the Keystone cut, a gemstone shape popular in that era.

CaptHenway

Thanks! I learned something today!

Staircoins

... as did I! Source (partway down the page) ...

The term keystone, meaning that 50% of the stated price should be considered to be the wholesale price, comes from the jewelry trade. It was originated in 1896 by Keystone magazine, a predecessor of Jewelers' Circular-Keystone, after subscribers had complained about the showing of dealer costs in a publication that customers might see on jewelers' counters.

ricko

Interesting... did not know that....thanks...Cheers, RickO

DollarAfterDollar

How much you wanna beet I'll forget what I just learned walking through the first doorway?


Still, info I'd never get elsewhere.

asheland

$50 to $60 over for a 1oz gold eagle isn't all that bad, actually..