How Profitable Are Online Bullion Dealers

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Author	Replies: 4 / Views: 1,563
leon1998 Pillar of the Community United States 586 Posts	Posted 06/29/2015 09:27 am Since one of my friends bought silver regularly from JM Bullion, I will take them as an example. On a monthly basis, JM Bullion took about 30,000 orders; if you order monthly, you can calculate the difference between your order number; to find out. Let's assume $333 per order, that round up to about 10 million. If profit margin is 10%, this translates to 1 million gross profit. But then you have to pay the salary of employees, transportation, and other expenses. If one worker can process 30 orders per day, you will need at least 50 of them . . . How much is left for owners? Tough business indeed. Edited by leon1998 06/29/2015 09:52 am Report this Post to the Staff

YoshiRules Pillar of the Community United States 602 Posts	Posted 06/29/2015 09:41 am With bullion price as they are, yes, it is tough. Report this Post to the Staff
leon1998 Pillar of the Community United States 586 Posts	Posted 06/29/2015 09:55 am Made a mistake in my calculation, only need 50 workers to process 30,000 orders each month. Overall, probably not THAT bad; but that much capital and pathetic margin, maybe it is better to do something else. Report this Post to the Staff
omxfl Pillar of the Community United States 1026 Posts	Posted 06/29/2015 1:03 pm The profit margin on bullion is definitely lower than 10%, it's more like 1-5% to be realistic. You also have to consider postage & packaging costs (unless this is being charged extra, but it's not the norm anymore) and insurance costs for lost deliveries. You also need to rent a warehouse and pay for security among the many other things I don't consider right now. Also, consider chargebacks for credit card orders... Personally, I wouldn't deal with bullion - spot prices are too volatile and there is a lot of competition already. Not to mention milk spots...! You can make more money with numis, but this is sometimes a gamble as you need to predict hot coins. Report this Post to the Staff
Bret Pillar of the Community United States 1913 Posts	Posted 06/30/2015 1:27 pm I honestly don't see how they make money. Over the past six months I've purchased five 1oz gold bars on ebay from major dealers for spot. It's really less than spot once you consider that I get 1% cash back on the credit card that I use. Report this Post to the Staff
	Replies: 4 / Views: 1,563

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