Someone Splain Sumpin To Me!
BAJJERFAN
Posts: 31,094 ✭✭✭✭✭
How do these larger bullion dealers sell AGEs for $12 over spot on eBay and eat shipping and CC reward points and apparently still make something on each coin. It's been said that PP and eBay waive their fees.
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They bought them when spot price was lower?
Here is an interesting video by Siver bullet, Silver shield with an opinion that certain bullion business models are unsustainable, selling at losses in an increasingly difficult market.
It's all about what the people want...
Common sense will validate that comment. It's very unlikely that the banks holding the cc's would waive their fee. I'm sure the big boys get a reduced FVF from ebay, but so would anyone whose sales equal in volume.
I've wondered the same thing.
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Although I enjoyed my career and was quite successful, I often think now, that economics would have been a better choice.... seems like somewhere in there is a license to steal - albeit 'legal'....Cheers, RickO
How long can a place which is not an AP afford to sit on 800 ounces of AGEs or Buffs or Maple Leafs?
I've wondered if the APs don't get some sort of sweetheart deal like an option to buy at a lower price.
Gotta give ‘em credit.
Reminds me of the old saw about "we lose a little on every sale, but make it up in volume."
I would imagine all the other premiums on bigger volume items give this opportunity to 'sale' the gold. How many +$3 ASEs would make up for 800 'discounted' AGEs? I imagine they sell gobs more of the silver, plenty more to supplement these gold discounts and still make money.
I've heard they buy insurance, by that I mean they buy or sell futures or equivalent on the metal markets.
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I think this is the case.
My local burger joint loses money on their "coupon" deal for the sandwich, but they more than make it up, in the aggregate, on fries, sodas, beer, dessert, etc.
Plus, the gold place also gets your info for their mailing list
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I know they sell the same stuff at considerably higher prices on eBay, but anyone with an ounce of brains would wait for the specials.
Yes and it's called hedging. And those contracts are bought and sold at spot. If you pay a premium over spot for say a monster box of ASEs you stand a chance of losing the amount of the premium; at least that's how one member here who works in the biz explained it. A local dealer around here said that you need at least a million dollar account to trade on the COMEX.
We can all speculate, but I doubt that anyone in the biz will come here and spill their guts.
The big bullion players won't tell you how it is thought. They don't want you to know that they don't pay any ebay fees and that the rest of the small sellers are subsidising them. All the while making it harder and harder for the small sellers of bullion to compete at all.
Even without eBay fees it seems like profits are razor thin, if that. Does PP forgive their fees including credit card charges? Seems that they would also have to "buy right" however that is accomplished.
They’re covering the losses with palladium coins.
They've been doing this long before the palladium coin was a gleam in John Mint's eye.