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 Replies: 30 / Views: 3,128 |
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Valued Member
United States
368 Posts |
Another dealer purchased 1000 mixed year ASE proofs from my dealer this morning....he paid $83 each....$83,000 purchase! |
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Pillar of the Community
United States
4008 Posts |
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The reality is that silver increased in price by 80% last year & is up over 60% year to date. IMO anything that jumps in price like silver has could drop just as quickly. - trdhrdr007
Yes, that is always possible. As I like to say, "Investments that go up like rockets can come down the same way - and usually with a big BOOM! at the end of the trip".  Fortunately, there is strong fundamental support for silver that should dampen this tendency. For many Americans, our choice is to hold PMs or hold dollars / dollar denominated paper assets. Seen in that light, holding PMs can look pretty good. The price will jump around a bit. Volatility seems to be the name of the game these days. Owning PMs can be a bumpy ride but having 5-10% of one's net worth in them can help to stabilize and support the rest of one's holdings. As to the dealers... as silver prices rise higher, we may start seeing them not having silver bullion for immediate delivery to walk-in customers. Buyers may have to order their silver bullion, pay for it then, and take delivery when it comes in. Dealers can get some price protection that way, so will be more likely to continue selling silver bullion coins. This is how the on-line bullion sellers work so it isn't as if buyers had very many other alternatives. Edited by Ed_B
04/25/2011 1:31 pm
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Rest in Peace
United States
9104 Posts |
Dealers don't depend on retail business to resell silver. Refiners will buy any quantity at any time, the only thing that changes is the price they pay. Once Joe Sixpack buys his ten grand of silver or $100 for a month, lowering the sell price 20% won't get him to buy more.
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Pillar of the Community
United States
4008 Posts |
Quote:
Dealers don't depend on retail business to resell silver. Refiners will buy any quantity at any time, the only thing that changes is the price they pay. Considering that retail customers always pay more than the refiners, one would think that dealers would sell as much as they could to the retail buyers and then send their excess off to the refiners... at least as far as silver coins are concerned. Flatware and such are on their own. |
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Rest in Peace
United States
9104 Posts |
Let's say you can buy $20,000 in bullion/scrap in a day, and can make a 10% profit selling to the refinery. That's $2000 a day, or $250 an hour or roughly $4 a minute.
Say you spend 15 minutes with a retail customer. This is very easy to do when you have a new customer who needs to know how much silver content is in each type of coin, which is most popular, and a million other questions. That means you have to charge $60 more for what he buys, just to break even. In addition, each customer means more paperwork, and more exposure to shoplifting, bad checks, cc fees, etc.
If you sell it to the refinery, you throw everything in a box, have one transaction, typically get an advance for most of the total (in this example, $20,000, so you're back in business), and you're done. He's also not going to come back a month after spot drops and want his money back.
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Pillar of the Community
United States
2049 Posts |
I agree with biggfredd. At our shop, I would say 90% roughly of our sales were either to a refiner or to another dealer and the other 10% to retail customers. We were all about turning stuff over versus sitting on it so that our retail customers would have hundreds or thousands of face value in junk silver to pick from. He brings up plenty of valid points in the post above mine and I agree with him 100%.
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Rest in Peace
United States
9104 Posts |
Even before the 1979-80 rush, I talked shop with some friends who had a coin shop in a mall. They had paid $5000 for an IBM cash register, and said it was worth every cent.
At the end of each day, it would total up how many dwt of 10k, 14k, and 18k they bought and sold. Ditto 90-80-40-35-50-92.5% silver, scrap sterling, dollars and several other categories. Each item would then show the increase or decrease of inventory. If they bought 35dwt more 10k than they sold, they'd know to sell 35dwt as scrap to balance their inventory.
Since they would always be buying at lower prices than selling, this made sure that each's day's profit was locked in. Otherwise, they could quickly pile up a bunch of precious metal that they ended up selling at a loss, because they didn't watch the market.
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Valued Member
United States
198 Posts |
I work in the largest coin,PM,Stamp shop in my area. We watch the market closely. We were paying 4,250 for 100 oz Friday at 4 pm. If we get to many I take some home and sell them that night on the 3 sites I have. Eagles are hard to get. Have not ran out yet. Silver rounds we got down to 5.
The problem is the idiots that call and want me to pay spot!! I will get 20 of those calls tomorrow if it hits 50 oz. Gold people are much easier to deal with. They understand we have to make money to.Busy times. Last day off was Jan-10th when my Auburn Tigers won the NC:)
Today is my birthday. Still working.
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Pillar of the Community
United States
2764 Posts |
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Pillar of the Community
United States
4008 Posts |
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Let's say you can buy $20,000 in bullion/scrap in a day, and can make a 10% profit selling to the refinery. That's $2000 a day, or $250 an hour or roughly $4 a minute. I can see where volume can get the profit job done in the business world. We don't have any shops around here that deal in such volumes but I can see that some places would. |
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Valued Member
United States
198 Posts |
Thanks Bruce
Looks like tomorrow will be a sort day. Fine with me!
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Pillar of the Community
United States
1348 Posts |
profit takers. it will rise throughout the week
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Pillar of the Community
United States
2335 Posts |
warjag....Are you in Alabama? I'm an Opelika resident, 89 AU grad, & was in Arizona for the game. Good times!
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Valued Member
United States
198 Posts |
No I am in Florida but raised in Bham. Yes 2010 was good year. 2011 work wise has started out with a bang!
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Rest in Peace
United States
9104 Posts |
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I only brought this up because,I was collecting during the Hunt Bros silver boom and remember some dealers being reluctant to buy at these high prices....I know things are different now,but it will be interesting to see how this turns out! I know a big dealer who went to get a quote from the people he sold to in NY, as the 1980 bubble burst. They would not lock in any prices, as is normal business, they would buy at the going rate upon receipt. He sent someone with $200,000 in silver, and got $7000 less than he paid by the time they completed the 12 hour drive. |
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Replies: 30 / Views: 3,128 |
First Page
Posted 04/25/2011 1:27 pm
