What,s a fair premium when selling gold bullion to a dealer ?

Well i just came from my local dealer where i was going to sell one of
My Kruggers ( 1 OZ ) Gold coin and yes i expect that i would get hosed
When i bought, i believe it was $50, then i wanted to sell, kind of test
The waters, so Gold was at $1,511.28 about an hour or so ago when
I went in, ok, everybody has to make money and yes i get that, but
When he came back with a hundred dollar price tag, i said i will pass
So in essence he would of only give me $1,411.28 minus another
$50 that i paid for it, so $150 right off the bat.

His excuse was he has expenses to, maybe he ought to call in expert
Like Rick from the pawn shop, he knows all about offering 25 Cents on
The dollar....LOL

 

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I was at the ANA show and the best offers were around spot for most gold (I sold some fractional world and one US). One dealer offered $12 under for a 1/10 oz coin, which I thought was quite low for such a popular and easy to sell size.

 

For 1 OZ it seams very unrealistic to pay the kind of premium i was
Quoted.

 

I agree that $100 under spot is quite low.

Even with local dealers, I'd expect most to be $25-$50 under.
Often the buy/sell spreads are fairly close and the margins are thin on gold bullion. This might have been a dealer that doesn't have any place to sell or hopes for large margins (and that people will need to sell and thus accept any offer).

 

I just called around and got some more realistic quotes $1,450 and $1,460
The $1,460 i would say to be fair around $50, so will try and make some more
Calls and see if we can bump that up a bit.

 

My guy pays spot for generic gold and silver.

 

Depends on what you're time is worth.
Quick money cost money.
Always better to sell to the end user when possible and time permitting.

 

Sold some gold too today. Buff was $1,500 when melt was $1,511. The spreads are all over the place right now.

 

how does he make any money ? Cant pay spot and stay in business very long...

 

Depends completely on what he can sell for, doesn't it?

 

Generic bullion does not have any premium attached, there has to be some
Meat on the bone, for the dealer to stay in business, that,s economics 101

 

Howdy,

Premiums vary for so many reasons and you simply must shop around.

This is my local dealer - Liberty Coin in Lansing Michigan. They post their prices. Pat Heller started it and he writes quite a bit for Numismatic News. Use it as a benchmark.

http://libertycoinservice.com/wp-content/uploads/quotes/daily_quotes.pdf

peace,

rono

 

Last I heard an LCS could easily say they're not buying today and that would be the end of the discussion so I think you're doing as good as possible.

 

This is a typical and fair margin. Nobody complains about the margins in Walmart but because you know gold spot and can do the math when selling your bullion, every dealer is crook. If you dont want to pay that premium, good for you. Go to APMEX and you'll get a better deal. But don't kid yourself. You aren't the savvy investor refusing to get hosed by the greedy dealer. There's a lot of competition. If people could pay better prices and make it work, they would. APMEX has scale. Scale means tighter margins. A dude running a coin shop does not have scale. If you dont care about LCSs, go to APMEX and maybe all the LCSs will go under. If you like the concept of having an LCS, these are the numbers you have to deal with.

 

The margins are all over the place ! $100 at my local dealer that i have been
Buying silver for years and on a first name bases ! i went there because it
was easy, will i go back probably not, he was telling me most were doing $1400
And i called more places and found $1,475 allot mare fair in my opinion.

 

I offer them melt plus $5 from my table at shows.

 

I am hearing from allot of local dealers here
In Vegas right now 5% will see how that
Holds up.

 

I had a similar experience to the OP a few weeks ago at a LCS in NH. He offered me $50 under spot for a mediocre gold $10 Indian. I thought it was kind of a lousy offer at first, but later I realized, it's a small coin shop in a small town, they have overhead, they can't buy bullion coins for spot & make a profit.

Apmex--they have this whole system to sell to them. You pay at least $24 for the shipping, & have to ship it the same day--by UPS--that you make the deal. Seems like a lot of trouble to sell one or two coins.

 

My LCS does too.....he "charges" when I/you buy. Usually about 3-4%.

No way any discount to the spot price of more than 1-2% be tolerated. If the LCS is saying he's going to hose you on both Buys AND Sells, then find another LCS.

He needs inventory which means he needs to buy from wholesalers and his regular clients. A 6-7% discount when you sell is a ripoff.