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 Replies: 11 / Views: 1,560 |
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Pillar of the Community
United States
2242 Posts |
I understand the US Mint only sells its bullion silver/gold to several large companies who in turn sell to dealers and the public. I heard there are usually 10-12 of these big vendors who buy the silver/gold eagles, etc. I think the US Mint posts the names of them.
When the US mint offers certain coins/commemoratives with purchase limits to the public the limit is often ended soon, like the next day. My question is, once the limit is over, are the big companies that buy the bullion allowed to buy these once limited products in bulk at a discount, at a better price than a collector can buy them? Or does everyone pay the same price?
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Pillar of the Community
United States
959 Posts |
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Or does everyone pay the same price?
I would think everyone pays the same price. I hope I don't find out otherwise. |
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Bedrock of the Community
13014 Posts |
There's bulk discounts to large dealers that are in the bulk program. The discounts are anywhere from like 3-5% and the orders have to be worth 10k or more with a minimum of 20k spent a year. The more they buy the higher the discount can go. Keep in mind that this is just the standard advertised policy, the truly big boys may have better terms than this. https://catalog.usmint.gov/on/deman...ent-form.pdf |
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Pillar of the Community
United States
1375 Posts |
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There's bulk discounts to large dealers that are in the bulk program.  but, the bulk discount program doesn't apply to commemorative coins. The Mint's Bulk Purchase Program only applies to these items: Quote:The following products are part of the Numismatic Bulk Purchase Program: United States Mint Proof Set® United States Mint Silver Proof Set® United States Mint Uncirculated Coin Set® American Eagle Gold and Silver Proof and Uncirculated Coins American Buffalo Gold Proof Coin United States Mint America the Beautiful Quarters Proof Set™ United States Mint America the Beautiful Quarters Silver Proof Set™ America the Beautiful Five Ounce Silver Uncirculated Coins™ For commemorative coins, I believe anyone who orders pays the same price, regardless of order size, but I suppose the Mint might cut individual deals if the order is really large  Quote:
Keep in mind that this is just the standard advertised policy, the truly big boys may have better terms than this. Perhaps, but what would be the Mint's incentive to offer a better deal? It's not like a buyer can get them from another supplier Edited by BadDog
01/27/2019 1:05 pm
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Pillar of the Community
United States
1613 Posts |
Personally, I don't understand why the mint will not sell direct in conjunction with the "authorized" dealers. What I really don't understand is the undisclosed price for gold, platinum and palladium. Silver is a precious metal. If the price spiked three hundred dollars in one day the amount they'd make over melt would leaves them with a greater profit. It's not out of the rhelm of possibility that a system is in place to adjust accordingly. Back to silver. It is currently $22.02 per ounce while the uncirculated American Eagle is priced at $46.95 direct. If the spot price jumped to $27.50 (25%) the mint is still above 75% profit for twenty-four hours. Assuming they'd adjust the price daily, which they most surely would. Just my thoughts.
ANA member - PAN Member - BCCS Member There are no problems only solutions - the late, great John Lennon
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Bedrock of the Community
13014 Posts |
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Personally, I don't understand why the mint will not sell direct in conjunction with the "authorized" dealers. Because they don't want to deal with the risks of bullion or small orders where they would have to up the price to actually make money with the extra man hours. Bullion orders cannot be canceled, there are no returns, and they are done in massive amounts. The mint basically makes whats ordered/what they anticipate and move on. They just want to get their money have it out the door and that be the end of it while letting other people deal with the public and the hassles of it. If they could they very likely would do that with every product |
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Bedrock of the Community
13014 Posts |
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Perhaps, but what would be the Mint's incentive to offer a better deal? It's not like a buyer can get them from another supplier They don't have to get them at all either or could just get them in much smaller quantities. It's a win win for the mint and the buyer to offer them a bigger discount for massive sales |
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Pillar of the Community
United States
1375 Posts |
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It's a win win for the mint and the buyer to offer them a bigger discount for massive sales Again, perhaps it would work this way, but if I understand the economics of monopolistic pricing correctly (It's been a LONG time since I took ECON101  ), then I'm not sure this would be the case. Maybe there's an economics professor who collects coins in the forum who could give us a short treatise on how monopolistic pricing is typically practiced  Edited by BadDog
01/27/2019 7:45 pm
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Bedrock of the Community
13014 Posts |
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Again, perhaps it would work this way, but if I understand the economics of monopolistic pricing correctly (It's been a LONG time since I took ECON101 ), then I'm not sure this would be the case. Monopolies are best exploited for necessities which is why laws were created to control their pricing to an extent. Foods, gas, medicine, water, a monopoly there would have people lined up yelling take my money because you need those things. Mint sets, proof sets, monopoly or not no one needs it and most collectors aren't to interested in those products anymore. The big buyers are the biggest customers for those and send their big grading orders in than dump the non 70s. If the big buyers walked away from the mint (which they actually could and just focus on bullion and classic coins) sales would plummet. |
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Valued Member
United States
325 Posts |
"Back to silver. It is currently $22.02 per ounce..."
Silver is under $16 an ounce right now.
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Pillar of the Community
 United States
2242 Posts |
Interesting stuff. Thanks all for responding.
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Bedrock of the Community
 United States
12845 Posts |
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Silver is under $16 an ounce right now. True. And still an affordable/reasonable buy at this price point if you can find it for 16.50/oz or less. |
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Replies: 11 / Views: 1,560 |
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Posted 01/26/2019 2:24 pm
