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If Something Has A Melt Value Why Sell It Here For Less?

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Pillar of the Community

United States
539 Posts
 Posted 01/04/2012  01:43 am Show Profile   Bookmark this topic Add weavus135 to your friends list Get a Link to this Message
this may sound like a controversial or inflammatory topic but that is not my goal. I read fairly regularly folks willing to sell their silver for less than melt here on the forum. I ask myself why would they do that? I suppose one reason is that they simply wish to pass on some coins to another deserving collector. But I'm wondering if it is because 'melt' is not really what the coins are worth on the metals market. I mean if I had $100 in melt value, why would I not just go down and sell it to a 'melter' for $100. I'm guessing because you wouldn't get $100 but rather something less and so why not try and sell the coins for something less than melt but higher than what you could actually get for them for true melt. Is that what I'm seeing? I collect, so I would never buy a coin for 'melt' unless I wanted to add that coin to my collection so it has to have some details left rather than just a hunk of silver. I don't own a lot of silver because of that but would certainly love to add some silver coins to my collection because some are quite beautiful and would complete some type sets.
And if you are one of those folks that does buy silver below melt, why do you do that? Are you trying to gather silver for sale later at a profit or do you need those coins for a collection goal?

thanks for the feedback.
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United States
14463 Posts
 Posted 01/04/2012  02:07 am  Show Profile   Bookmark this reply Add Fuzzy317 to your friends list Get a Link to this Reply
Many collectors (me included) would rather sell them for a little below melt to other collectors. We hope the coins bring joy to someone else.
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Australia
7096 Posts
 Posted 01/04/2012  02:08 am  Show Profile   Bookmark this reply Add trout1105 to your friends list Get a Link to this Reply
I try and buy a lot of older silver Aussie coins so that I can pick through them and of course I want to pay melt or less for them, why would you pay more if you don't have to.
If I feel that a particular collector is deserving I will let them have the coin for melt or just give it to them free if I'm in a good mood.
As a consequence I have a few kilos of silver coins that are surplus to what I need
I will never send these to get melted because there isn't that many of them left in comparisson to US,Canadian and Brit silver coins.
The Aussie silver coins were only produced from 1910 to 1966 and the mintages of each were nothing like as large as the other three countries I mentioned before.
Anyway they arn't doing any harm just sitting there.
Also I am a coin collector not a coin recycler
Edited by trout1105
01/04/2012 02:26 am
Valued Member
United States
316 Posts
 Posted 01/04/2012  03:21 am  Show Profile   Bookmark this reply Add Secret Argent Man to your friends list Get a Link to this Reply
There's lots of reasons to buy below melt. Myself, I like to check for die varieties and whatnot-- and that can be on a coin without a numismatic premium just as easily as one with. I mean sure you could just buy one with it already identified, but for me the fun is in finding it myself--- knowing I turned a $10 coin into a $50 coin because I had the whatever it takes to look.

And of course more often than not there is no DDO or whatever, so most coins accumulated are not "keepers" in the end. I still keep them, particularly the silver ones, both because I hope it will go up, thus increasing the value of my collection by default, and because I like silver coins. There is just a certain satisfaction one gets with silver as opposed to copper, cupronickel or steel. Assuming one believes silver is going up, it's like a win-win scenario-- enjoy it now, possibly sell it for more later.

Now, as to selling below melt, think of it this way-- if you ever watch pawn stars for instance--- the guy comes in with something the expert is called and it is "worth" 10k. He sells it to Rick at $7k. Why? Maybe because Rick has cash, maybe he just doesn't want to deal with finding another buyer. Rick of course, to talk the guy down says things like "I've got to find a buyer, and I have employees and rent, etc etc etc...I expect it would be ethe same for a smelter. You probably couldn't get the full melt value because they have to melt it and refine it... they would lose money if they gave you the full metal content.

I am guessing though, because myself I have and would never sell a coin direct to a refiner. I'd much rather give it to a collector at a discount or free any day.

So I guess the short answer is "it varies"
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United States
219 Posts
 Posted 01/04/2012  03:34 am  Show Profile   Bookmark this reply Add beachloan to your friends list Get a Link to this Reply
I do not melt coins, but I deal in scrap silver and the best deal I have found from a refiner is paying 90% of value on sterling or better. That is if you have 100oz or more. The less weight you have the less percentage they will pay. So yes, when you say you will get less than melt value you are correct. Granted you can find private parties to pay full melt but I have yet to find one to buy my 350oz bar.
Valued Member
United States
294 Posts
 Posted 01/04/2012  06:00 am  Show Profile   Bookmark this reply Add omahaorange to your friends list Get a Link to this Reply

Quote:
this may sound like a controversial or inflammatory topic but that is not my goal. I read fairly regularly folks willing to sell their silver for less than melt here on the forum. I ask myself why would they do that? I suppose one reason is that they simply wish to pass on some coins to another deserving collector. But I'm wondering if it is because 'melt' is not really what the coins are worth on the metals market. I mean if I had $100 in melt value, why would I not just go down and sell it to a 'melter' for $100. I'm guessing because you wouldn't get $100 but rather something less and so why not try and sell the coins for something less than melt but higher than what you could actually get for them for true melt. Is that what I'm seeing? I collect, so I would never buy a coin for 'melt' unless I wanted to add that coin to my collection so it has to have some details left rather than just a hunk of silver. I don't own a lot of silver because of that but would certainly love to add some silver coins to my collection because some are quite beautiful and would complete some type sets.
And if you are one of those folks that does buy silver below melt, why do you do that? Are you trying to gather silver for sale later at a profit or do you need those coins for a collection goal?

thanks for the feedback.


The simple answer to your question is...
They can make more money this way.

Now, to expand on that answer...

"Melt" is the value of the precious metal in the coin, not the value of the coin itself. Silver coins typically contain 90% or less silver, the other content being some other base metal such as copper or nickel. To extract the silver from the other metals, the coin has to be melted and refined. This costs the refiners (melters) money. So for the refiner to make money he has to buy at enough below melt so when he sells the refined silver at melt, he covers his production costs and makes a profit. So to sell your silver coins at slightly below melt to other collectors, you can get more out of the coin than you would by selling to a refiner (or someone who sells to a refiner). Basically, you eliminate the middle man by doing it this way.
Edited by omahaorange
01/04/2012 06:02 am
Valued Member
United States
404 Posts
 Posted 01/04/2012  11:07 am  Show Profile   Bookmark this reply Add akane17 to your friends list Get a Link to this Reply
People sell for below melt out of convenience and in some cases ignorance.
Pillar of the Community
United States
539 Posts
 Posted 01/04/2012  11:19 am  Show Profile   Bookmark this reply Add weavus135 to your friends list Get a Link to this Reply
thanks for the feedback thus far. Essentially melt is not really an obtainable number so I really should be (should I really ever try and collect silver in a bigger way) push for something less than melt because in reality the owner of that coin in not going to get melt (that is at least what I think I am reading). I recognize there is the value associated with the collectability of the coin and some how that needs to be factored in. So not trying to be argumentative but the comment about 'doing it out of ignorance' is not really valid because it is not an obtainable value under normal circumstances for the normal collector.
Bedrock of the Community
United States
20246 Posts
 Posted 01/04/2012  11:36 am  Show Profile   Bookmark this reply Add just carl to your friends list Get a Link to this Reply
Although you hear melt value all the time, it is not as possible to get it as most think. People may say melt is this or that but just where do you really get the so called melt price? You could try smelters and/or jewlers and usually you would be told a price far less than so called melt. In some places only about 75% or even less. Melt values are sort of like coin prices. Not always realistic and not always available.
just carl
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United States
17388 Posts
 Posted 01/04/2012  12:16 pm  Show Profile   Bookmark this reply Add Conder101 to your friends list Get a Link to this Reply
There are three different "melt" values.

There is the theoretical melt value which is the spot price times the weight of the metal in the coin. You will never get this because there is no profit in it for the buyer unless the metal price rises.

There is the melt value that the refiners will pay for quantity amounts of material. This is some percentage back of the theoretical melt value. The refiners make their profit on this difference buying at their melt value and selling the refined material at the spot price to end user and manufacturers. They also half to recover the refining costs from that difference.

Then there is the melt value paid by dealers. This is a percentage back of the refiners melt value. This percentage has to allow for fluctuations in the spot price while they accumulate enough for sending to the refiner.

Many collectors when they talk about melt value mean the theoretical melt value. They know they can't get that and so they sell or buy "below melt".
Gary Schmidt
Valued Member
United States
294 Posts
 Posted 01/04/2012  1:03 pm  Show Profile   Bookmark this reply Add omahaorange to your friends list Get a Link to this Reply
Maybe I misunderstood, but I read the original question as Why do we (forum members) sell to each other here (on the forum) at below melt?

Coins can have both numismatic value (what the coin is worth to a collector) and precious metal value (the value of the PM, like silver, contained in the coin). Let's assume, for argument's sake, that melt value and spot price are the same (they are, actually).

Read through some of the other posts on this forum, especially in regards to silver. Most do not collect silver, but accumulate it, in the hopes that if he buys at the current spot price (or slightly below) he can then resell it for a profit when the spot price of silver rises.

Getting the current spot price for your silver is an unreasonable expectation, unless you are willing to melt, separate, and certify that what you have is genuine. Costs for this type of operation will be prohibitive to the average basement smelter. To sell through a purchaser, who then sells to a smelter, who then sells to a silver buyer, adds costs to the process, and not only is each individual in this chain looking to recoup their costs, they also want to make a profit. Everybody wants a piece of the pie. By me offering to sell you silver coins or bullion through this forum, at slightly below the current spot price (assuming I bought when the spot price was lower than it is today) I can turn a profit on my coins and I'm not ripping you off. Like I said earlier, it eliminates the middle men who want a slice of your silver pie.
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United States
23522 Posts
 Posted 01/04/2012  1:23 pm  Show Profile   Bookmark this reply Add SsuperDdave to your friends list Get a Link to this Reply
Maybe I bought when melt was $15 for a Morgan. Yeah, I could make $30, but $25 is still a tidy profit. It's not all about the money.
Pillar of the Community
United States
539 Posts
 Posted 01/04/2012  1:43 pm  Show Profile   Bookmark this reply Add weavus135 to your friends list Get a Link to this Reply
My original intention was indeed limited to the forum activity because this is where I would probably buy silver coins if I were to try this. My thought though was broader as to why folks quote 'melt' when, as pointed out by other replies, this is not a realistic number. And I have seen and understand the responses thus far. There are collectors and then there are buyers of silver for potential profit. Both seem to be legitimate (probably not the word I was searching for) options to me, though I clearly fall into the collector category.

I have seen the generosity of this group. Many of you have added to my collection with very reasonable acquisition costs including zero. I certainly appreciate that and have tried to do the same when I had something someone else was interested in.

Thanks for this discussion. I don't 'play' much in the silver area and very little in US coinage so some of this may seem pretty obvious but to me it is educational.



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Canada
1733 Posts
 Posted 01/04/2012  2:09 pm  Show Profile   Bookmark this reply Add Ugly to your friends list Get a Link to this Reply
I see it a simple equation of buying and selling, (generally speaking)the buyer wants the lowest possible price point and the seller wants the highest possible price point. Regardless of where the melt line falls withing that range, a deal will be made. If coins containing PM's sell for less than melt, then there's more supply than there is demand at a higher price.

I think a lot of silver coin buys are made impulsively actually, without regard to coin quality just because it's silver. My take on it is that I wouldn't care if the coin was made from unobtanium , if I didn't like the strike or it didn't meet my expectations I wouldn't take it for half of melt, no interest. I got over the idea I could get rich buying and selling scrap a long time ago. My hope is merely to break even as I buy entire collections that allow me hours of sorting and examining pleasure. By accumulating enough coins that typically sell well below melt into a large enough pile I can increase the percentage of value I obtain from them from 90 per cent of melt to much higher than that.

That doesn't mean I ignore silver/gold/platinum bullion, but that's why they make maples, bars and eagles etc.. I don't examine a half roll of 1/2 ounce gold maples before I buy them for their coin quality, because that's not why I'm buying them. To me they don't represent numismatic items, they just happen to be round, like coins.

I just see melt as a rough guide but one that is more or less effective.
Pillar of the Community
United States
2605 Posts
 Posted 01/04/2012  2:13 pm  Show Profile   Bookmark this reply Add svslav to your friends list Get a Link to this Reply
My understanding is that melt value is just a reference point, kind of like the "catalog price". The seller may quote the melt value so that the buyer knows (s)he does not overpay (much). Just like the catalog value it's only a guide, a suggestion; other factors may weigh in, like rarity and such.
Anyway, when a seller states "below melt" or "below catalog value" it sure makes more attractive to the potential buyers.
Valued Member
United States
294 Posts
 Posted 01/04/2012  6:03 pm  Show Profile   Bookmark this reply Add omahaorange to your friends list Get a Link to this Reply

Quote:
Maybe I bought when melt was $15 for a Morgan. Yeah, I could make $30, but $25 is still a tidy profit. It's not all about the money.


Sure it is. Just look at this statement. Don't equate my comments to greed. That was not my intention. There are many ways to make a buck without being greedy about it (including this one). The OP didn't ask about collectible coins. He asked about "silver". He specifically mentions coins with no details left. How many posts and ads do you see (including this forum) about buying and selling bullion and junk coins for slightly less than or at melt value? There is an entire forum on this community devoted to bullion.
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