Why doesn't the US Mint produce bullion coins that don't have significant markups?

FellintoOblivion

Looking at offerings from the various mints around the world on some websites I can get a wide range of 1 oz. silver coins for ~$5 above spot and that includes the cost of getting them to the US from wherever in the world they are minted.

When I look at products from the US Mint I see a lot of stuff that costs $50 and isn't even .999.

In my novice opinion I feel like collectors would snap up .999 1 oz. US coins featuring something like the Canadian Birds of Prey series.

Is it simply a matter of the stuff the Mint is producing selling well enough they don't need to offer a product like that?

GoldenEgg

Bullion ASEs.

FellintoOblivion

@GoldenEgg said:
Bullion ASEs.

Yea I forgot to put "besides Silver Eagles" in my OP

BackroadJunkie

@FellintoOblivion said:
Is it simply a matter of the stuff the Mint is producing selling well enough they don't need to offer a product like that?

No, what the Mint can produce without an Act of Congress is very limited in scope:

31 U.S. Code § 5111 - Minting and issuing coins, medals, and numismatic items
and
31 U.S. Code § 5112 - Denominations, specifications, and design of coins

It is why we only get gold coins and silver medals. A law would have to be passed to get any other type of silver coinage.

Jimnight

$$$$$$$$$$

Zoins

The reason is people will pay more. These are collector coins, not circulation or bullion.

jmski52

It's true that the Mint's prices on the many items being sold as collectables are obscene, all things considered. Some Mints are better; some are worse.

TopographicOceans

They will charge what the market will bear, so they can maximize their profits.

MsMorrisine

100xAgree on BackroadJunkie's post

Congress controls coins and gave the mint no latitude to make a variety of bullion issues. Liberty one side, eagle other. It.

Zoins

@MsMorrisine said:
100xAgree on BackroadJunkie's post

Congress controls coins and gave the mint no latitude to make a variety of bullion issues. Liberty one side, eagle other. It.

They do a great job on Liberty and eagles for the platinums.

Hydrant

Wild guess;....increased profit margin?

Davideo

Bullion 5oz America the Beautiful

COCollector

I think the OP is looking for U.S. bullion in the wrong place.

That is, AFAIK the U.S. Mint doesn't sell bullion coins directly to consumers.

Instead, authorized dealers buy bullion from the Mint. Then re-sell to consumers. For example, the 2017 ASE is 1 oz .999 silver for about $3/oz above spot depending on quantity.

Of course, you can also buy U.S. bullion in the secondary market -- dealers, ebay, private parties, you-name-it. Obviously shop for best prices.

OTOH, the stuff you see on the U.S. Mint website is more expensive than bullion. Typically these are uncirculated or proof collectibles.

TheDukeK

I'd say part of the problem is the same reason many manufacturing jobs go abroad.

1. US mint employees get paid more for labor, retirement, healthcare, vacation, ect...
2. Material costs more as they have to buy only US metal vs possibly less expensive metal abroad
3. Fixed costs seem to be more as our real estate in the mint towns can't be cheap or insurance levels here for our costly legal system.
4. And finally just because they can lol

FellintoOblivion

@BackroadJunkie said:

A law would have to be passed to get any other type of silver coinage.

They could produce silver dollars besides the Silver Eagle without a new law as long as they followed the provisions in the US Code you linked to.

"(A) symbolic of Liberty on the obverse side" is pretty vague.

FellintoOblivion

@COCollector said:

That is, AFAIK the U.S. Mint doesn't sell bullion coins directly to consumers.

Yes, I was confused by the many products the US Mint is selling on their website under the "Coin" category that are explicitly described as "coins" and yet are apparently not legal tender

RogerB

@TheDukeK said:
I'd say part of the problem is the same reason many manufacturing jobs go abroad.

1. US mint employees get paid more for labor, retirement, healthcare, vacation, ect...
2. Material costs more as they have to buy only US metal vs possibly less expensive metal abroad
3. Fixed costs seem to be more as our real estate in the mint towns can't be cheap or insurance levels here for our costly legal system.
4. And finally just because they can lol

There’s a lot of misinformation in this post that begs correction.

1. Mint employees are on the same Federal Government pay scale as most others: GS rank and longevity. Their total compensation is usually much less than those with comparable responsibility in private business, but they have better job security and can’t be discriminated against or randomly fired. [A GS-15, the highest non-executive pay level starts at $103,672 and typically manages over 200 people in multiple programs/projects often of a critical nature. This might be equivalent to a plant manager in manufacturing, or a Senior Systems Engineer. Private compensation is typically double the GS-15. and often much more. A position of similar responsibility at a large IT company has a minimum salary of approx $375,000 + incentives + bonus + stock.]
2. Congress establishes restrictions on many materials in order to promote the US economy and US business. “Buy American” has been common policy since 1789. A private company has no such restrictions and can buy on price/availability alone.
3. Federal buildings have to pay for all local goods and services. Usually, the Federal Government has a lower cost for these because of negotiated volume pricing. [Compare the price of a hotel room for “Government Rate” and “normal rate.” That will give you an example of large-scale buying power. Some large corporations, such as IBM, also have lower negotiated rates than ordinary consumers can get.]
4. The US Mint is required by Congress to sell bullion and numismatic products at a profit – no “loss leader” sales equivalent to bread and milk at the grocery - but the Mint cannot do the kind of advertising a private company could do to boost sales volume and reduce unit cost. Congress also exercises oversight to be sure profits are in line with their expectations. There is no “just because they can.” Leave that to pharmaceuticals, cars, trucks, gasoline, etc.

The bottom line is that government and private business have different roles, tasks, priorities and performance options. Examples of either can be found that are highly productive, efficient and effective in their roles; and examples of the opposite also abound.

See also: https://www.cpsc.gov/About-CPSC/Job/Working-for-the-Federal-Government-What-Every-Employee-Should-Know.

ricko

There are other commercial mints that produce coins (not legal tender) for the market... This is seen in silver rounds and bars... also gold products....Many people collect these (check out the PM forum). Cheers, RickO

TwoSides2aCoin

They're in the business of taking more of our money as we play "Go Fish" for more of their's .

MsMorrisine

By Federal Law, denominated numismatic items are legal tender and thus coins.

https://www.law.cornell.edu/uscode/text/31/5132

So start pocket piecing a puck today.

BackroadJunkie

@FellintoOblivion said:

@COCollector said:

That is, AFAIK the U.S. Mint doesn't sell bullion coins directly to consumers.

Yes, I was confused by the many products the US Mint is selling on their website under the "Coin" category that are explicitly described as "coins" and yet are apparently not legal tender

MsMorrisine is correct. The collector coins the mint sells is legal tender, even the 5oz pucks. (It's called NCLT or Non-Circulating Legal Tender. I assume you know the term, but I'm not sure from your statement...)

FellintoOblivion

@BackroadJunkie said:

@FellintoOblivion said:

@COCollector said:

That is, AFAIK the U.S. Mint doesn't sell bullion coins directly to consumers.

Yes, I was confused by the many products the US Mint is selling on their website under the "Coin" category that are explicitly described as "coins" and yet are apparently not legal tender

MsMorrisine is correct. The collector coins the mint sells is legal tender, even the 5oz pucks. (It's called NCLT or Non-Circulating Legal Tender. I assume you know the term, but I'm not sure from your statement...)

Nope, never heard of it.

So what's the legal tender value of this:

BAJJERFAN

@FellintoOblivion said:

@BackroadJunkie said:

@FellintoOblivion said:

@COCollector said:

That is, AFAIK the U.S. Mint doesn't sell bullion coins directly to consumers.

Yes, I was confused by the many products the US Mint is selling on their website under the "Coin" category that are explicitly described as "coins" and yet are apparently not legal tender

MsMorrisine is correct. The collector coins the mint sells is legal tender, even the 5oz pucks. (It's called NCLT or Non-Circulating Legal Tender. I assume you know the term, but I'm not sure from your statement...)

Nope, never heard of it.

So what's the legal tender value of this:

It's NCLT, but can be used as a silver dollar if one is foolish enough to do so. It says right on the back that it has a face value of $1.

FellintoOblivion

@BAJJERFAN said:

@FellintoOblivion said:

@BackroadJunkie said:

@FellintoOblivion said:

@COCollector said:

That is, AFAIK the U.S. Mint doesn't sell bullion coins directly to consumers.

Yes, I was confused by the many products the US Mint is selling on their website under the "Coin" category that are explicitly described as "coins" and yet are apparently not legal tender

MsMorrisine is correct. The collector coins the mint sells is legal tender, even the 5oz pucks. (It's called NCLT or Non-Circulating Legal Tender. I assume you know the term, but I'm not sure from your statement...)

Nope, never heard of it.

So what's the legal tender value of this:

It's NCLT, but can be used as a silver dollar if one is foolish enough to do so. It says right on the back that it has a face value of $1.

So it does, I overlooked it, being embedded in the fur the way it is.

BackroadJunkie

@FellintoOblivion said:

@BackroadJunkie said:

@FellintoOblivion said:

@COCollector said:

That is, AFAIK the U.S. Mint doesn't sell bullion coins directly to consumers.

Yes, I was confused by the many products the US Mint is selling on their website under the "Coin" category that are explicitly described as "coins" and yet are apparently not legal tender

MsMorrisine is correct. The collector coins the mint sells is legal tender, even the 5oz pucks. (It's called NCLT or Non-Circulating Legal Tender. I assume you know the term, but I'm not sure from your statement...)

Nope, never heard of it.

NCLT is covers a lot of stuff, including coins like the ones with Mickey on 'em from Perth, or much of the other collector coins from the other world mints.

So what's the legal tender value of this:

(deleted picture)

Technically, it's one dollar. (It's on the other side.) Par value for clad commems is 50 cents and gold commems come in at five dollars.

However currently, it has a higher value as a collector coin. I see it like a stock certificate. They have a par value as well, usually $0.01, but it's value is higher than that. Or at least you hope it is. (I could make a joke about the Lions Club commem, but I won't. )

BackroadJunkie

@BAJJERFAN said:

@FellintoOblivion said:

@BackroadJunkie said:

@FellintoOblivion said:

@COCollector said:

That is, AFAIK the U.S. Mint doesn't sell bullion coins directly to consumers.

Yes, I was confused by the many products the US Mint is selling on their website under the "Coin" category that are explicitly described as "coins" and yet are apparently not legal tender

MsMorrisine is correct. The collector coins the mint sells is legal tender, even the 5oz pucks. (It's called NCLT or Non-Circulating Legal Tender. I assume you know the term, but I'm not sure from your statement...)

Nope, never heard of it.

So what's the legal tender value of this:

It's NCLT, but can be used as a silver dollar if one is foolish enough to do so. It says right on the back that it has a face value of $1.

Hey, I'd buy that for a dollar!

oldgoldlover

@FellintoOblivion said:
Looking at offerings from the various mints around the world on some websites I can get a wide range of 1 oz. silver coins for ~$5 above spot and that includes the cost of getting them to the US from wherever in the world they are minted.

When I look at products from the US Mint I see a lot of stuff that costs $50 and isn't even .999.

In my novice opinion I feel like collectors would snap up .999 1 oz. US coins featuring something like the Canadian Birds of Prey series.

Is it simply a matter of the stuff the Mint is producing selling well enough they don't need to offer a product like that?

It is all about money and the U.S. mint makes millions of dollars each year from selling these pieces.

Cougar1978

Like any other business they have to cover variable and fixed costs. It takes a 30 percent gross margin on sales at a minimum to sell on eBay and make 10 pct profit.

They are running a for profit project. You can buy their products in the after market.

TheDukeK

@RogerB said:

@TheDukeK said:
I'd say part of the problem is the same reason many manufacturing jobs go abroad.

1. US mint employees get paid more for labor, retirement, healthcare, vacation, ect...
2. Material costs more as they have to buy only US metal vs possibly less expensive metal abroad
3. Fixed costs seem to be more as our real estate in the mint towns can't be cheap or insurance levels here for our costly legal system.
4. And finally just because they can lol

There’s a lot of misinformation in this post that begs correction.

1. Mint employees are on the same Federal Government pay scale as most others: GS rank and longevity. Their total compensation is usually much less than those with comparable responsibility in private business, but they have better job security and can’t be discriminated against or randomly fired. [A GS-15, the highest non-executive pay level starts at $103,672 and typically manages over 200 people in multiple programs/projects often of a critical nature. This might be equivalent to a plant manager in manufacturing, or a Senior Systems Engineer. Private compensation is typically double the GS-15. and often much more. A position of similar responsibility at a large IT company has a minimum salary of approx $375,000 + incentives + bonus + stock.]
2. Congress establishes restrictions on many materials in order to promote the US economy and US business. “Buy American” has been common policy since 1789. A private company has no such restrictions and can buy on price/availability alone.
3. Federal buildings have to pay for all local goods and services. Usually, the Federal Government has a lower cost for these because of negotiated volume pricing. [Compare the price of a hotel room for “Government Rate” and “normal rate.” That will give you an example of large-scale buying power. Some large corporations, such as IBM, also have lower negotiated rates than ordinary consumers can get.]
4. The US Mint is required by Congress to sell bullion and numismatic products at a profit – no “loss leader” sales equivalent to bread and milk at the grocery - but the Mint cannot do the kind of advertising a private company could do to boost sales volume and reduce unit cost. Congress also exercises oversight to be sure profits are in line with their expectations. There is no “just because they can.” Leave that to pharmaceuticals, cars, trucks, gasoline, etc.

The Op asked for reasons and I still think my points have validity.

I won't argue with you but I don't know where jobs at those levels are but getting around must not be my strong suit
And it sounds like the others that you pointed out back up my comments as "Buy American" of course drives up cost (whether it is a good idea or not I'm not debating).
And even if the Government negotiates better you can't tell me cost in San Fran/ Philly and Denver are as cheap as no-where Kansas or farmland Ill.

BAJJERFAN

@TheDukeK said:

@RogerB said:

@TheDukeK said:
I'd say part of the problem is the same reason many manufacturing jobs go abroad.

1. US mint employees get paid more for labor, retirement, healthcare, vacation, ect...
2. Material costs more as they have to buy only US metal vs possibly less expensive metal abroad
3. Fixed costs seem to be more as our real estate in the mint towns can't be cheap or insurance levels here for our costly legal system.
4. And finally just because they can lol

There’s a lot of misinformation in this post that begs correction.

1. Mint employees are on the same Federal Government pay scale as most others: GS rank and longevity. Their total compensation is usually much less than those with comparable responsibility in private business, but they have better job security and can’t be discriminated against or randomly fired. [A GS-15, the highest non-executive pay level starts at $103,672 and typically manages over 200 people in multiple programs/projects often of a critical nature. This might be equivalent to a plant manager in manufacturing, or a Senior Systems Engineer. Private compensation is typically double the GS-15. and often much more. A position of similar responsibility at a large IT company has a minimum salary of approx $375,000 + incentives + bonus + stock.]
2. Congress establishes restrictions on many materials in order to promote the US economy and US business. “Buy American” has been common policy since 1789. A private company has no such restrictions and can buy on price/availability alone.
3. Federal buildings have to pay for all local goods and services. Usually, the Federal Government has a lower cost for these because of negotiated volume pricing. [Compare the price of a hotel room for “Government Rate” and “normal rate.” That will give you an example of large-scale buying power. Some large corporations, such as IBM, also have lower negotiated rates than ordinary consumers can get.]
4. The US Mint is required by Congress to sell bullion and numismatic products at a profit – no “loss leader” sales equivalent to bread and milk at the grocery - but the Mint cannot do the kind of advertising a private company could do to boost sales volume and reduce unit cost. Congress also exercises oversight to be sure profits are in line with their expectations. There is no “just because they can.” Leave that to pharmaceuticals, cars, trucks, gasoline, etc.

The Op asked for reasons and I still think my points have validity.

I won't argue with you but I don't know where jobs at those levels are but getting around must not be my strong suit
And it sounds like the others that you pointed out back up my comments as "Buy American" of course drives up cost (whether it is a good idea or not I'm not debating).
And even if the Government negotiates better you can't tell me cost in San Fran/ Philly and Denver are as cheap as no-where Kansas or farmland Ill.

If you were a rancher raising beef, I'm sure that you'd be tickled pink if the American consumer chose to buy imported beef and let yours rot in the meatcase because imported was cheaper. Or expected you to work for nothing or sell at a loss in order to compete with the imported product.

TheDukeK

Again I didn't say it was good or bad. Just that it is a reason for driving up costs.

derryb

If the mint is selling bullion ASEs at $2.50 over spot to its authorized purchasers after buying the fabricated planchets from a contractor and paying for all of the further fabrication of the coins including overhead, I'd say that they are producing bullion coins that don't have significant markup.

The more expensive collector coins you refer to are produced in much, much more limited numbers and are really produced (at a much higher per coin cost) to cater to a very small numismatic community. The mint does not decide what it will produce; it follows orders primarily from politicians who are historically known not to care about cost.

Don't forget the primary purpose of the US Mint is to produce the nation's circulating coinage. Everything else takes a back seat.