Who really makes Money in Coins?

[Frank1-migration]

Who really makes money in silver coins? The place where I buy charges $4 above spot for silver eagles. ($3 for maple leafs) He then buys back at 97% of spot or less. So, for me to make money the spot price would have to go up $5 on eagles! ($4 for maple leafs) Given the current market this is unlikley to happen anytime soon. To compare this to stocks: I can buy 100 shares, or 1,000 shares and still pay the same ($20) commission rate. It seems the only ones making money are the dealers. The game seems to be rigged against the small buyer/invester. What do you think?

[James_OldeTowne]

Who really makes money in silver coins? The place where I buy charges $4 above spot for silver eagles. ($3 for maple leafs) He then buys back at 97% of spot or less. So, for me to make money the spot price would have to go up $5 on eagles! ($4 for maple leafs) Given the current market this is unlikley to happen anytime soon. To compare this to stocks: I can buy 100 shares, or 1,000 shares and still pay the same ($20) commission rate. It seems the only ones making money are the dealers. The game seems to be rigged against the small buyer/invester. What do you think?

I think that's like saying grocery stores "rig" the sale price of food items.

 

A seller can set a price level wherever he wants, and it's up to you as a customer to decide whether you can "make money" over a certain period of time.

 

Do you think a dealer should not "make money"??

[benjmurts]

Who really makes money in silver coins? The place where I buy charges $4 above spot for silver eagles. ($3 for maple leafs) He then buys back at 97% of spot or less. So, for me to make money the spot price would have to go up $5 on eagles! ($4 for maple leafs) Given the current market this is unlikley to happen anytime soon. To compare this to stocks: I can buy 100 shares, or 1,000 shares and still pay the same ($20) commission rate. It seems the only ones making money are the dealers. The game seems to be rigged against the small buyer/invester. What do you think?

I think that's like saying grocery stores "rig" the sale price of food items.

 

A seller can set a price level wherever he wants, and it's up to you as a customer to decide whether you can "make money" over a certain period of time.

 

Do you think a dealer should not "make money"??

 

I agree with James, if you can't make money over time then you don't buy.

[GoldFinger1969]

Who really makes money in silver coins? The place where I buy charges $4 above spot for silver eagles. ($3 for maple leafs) He then buys back at 97% of spot or less. So, for me to make money the spot price would have to go up $5 on eagles! ($4 for maple leafs) Given the current market this is unlikley to happen anytime soon. To compare this to stocks: I can buy 100 shares, or 1,000 shares and still pay the same ($20) commission rate. It seems the only ones making money are the dealers. The game seems to be rigged against the small buyer/invester. What do you think?

 

The markup's on ASE's is proportionately larger than for other bullion coins. The smaller the amount of bullion and/or the $$$-value involved, the more the markup. You will pay much more over spot if you buy a 1/10 oz. of gold or even a 1/4 oz. gold coin than if you buy a 1 oz. American Eagle.

 

I get e-mails all the time about specials from some of the larger on-line bullion dealers for coins. I got one a few weeks ago for like $1 over spot for ASE's. If you buy silver in bulk, comparable to a larger $$$-amount like a few gold coins, you'll chip into the markup.

 

My friend just bought a 1 oz. Kruggerand at the Parsippany Show for $40 over spot. My local NY/NJ dealers often charge $60-$85 over spot, which is reasonable (there's no sales tax over $1,000). I see that even graded MS-70 ASEs are being sold for under $50, compared to the regular prices in the $60's, and even higher-prices on Ebay. You just have to be patient and shop around and decide if you want COINS or just the METAL. If the former, you'll pay a bit more depending on graded vs. ungraded and any other special features....if the latter, you're just buying the metal in some raw form.

 

So while I understand your angst about the premiums, if you are buying these as disaster insurance and if silver ever goes to $100 oz, does it really matter if you paid the $21 spot silver price or the $25 coin price? Either way, you'll be sitting pretty.

 

BTW, you can always buy a silver ETF like SLV (though I'm not a fan of it), esp. if you want to trade it for a short period of time.

[cpm9ball]

When I first joined here in 2005, silver was about $5-6. I was searching 100 rolls of half dollars from my bank nearly every week, and 90% & 40% halves were reasonably plentiful. Then, silver began it's rise and everyone and their brother was searching bank rolls for silver. Finally, silver peaked at $49 and began the downward spiral. Fortunately for me, I sold all of it at $45. So, I didn't do too bad having only paid face value for them.

 

Chris

 

PS. I'm still holding on to 600-700 ounces of silver medals, but since most of these were also bought when silver was very low, I think I'll hold on to them for a while. I've got nothing to lose...................hopefully!

 

[flintcreek6412]

you need to search for a better place to buy. My guys sells at $4.50 over spot and buys back at $2.50 over spot unless I some how beat them up and out of high MS condition.

 

That's why I was tickled to buy ASE's on ebay when APMEX was having a deal. With my 10% ebay coupon I bought them at $20.02 ea and sold them the day they arrived for $23 each.

[GoldFinger1969]

That's why I was tickled to buy ASE's on ebay when APMEX was having a deal. With my 10% ebay coupon I bought them at $20.02 ea and sold them the day they arrived for $23 each.

 

That's who e-mailed me...APMEX. They've been running specials for a few weeks, ASEs, Silver Buffalos -- all at $1 or less over spot.

 

APMEX and ModernCoinMart are 2 firms I've used who have good prices.

 

What's this 10% Ebay coupon, BTW ?

[BillJones]

There have got to be dealers out there who will pay melt or slightly more for ASEs. The guy you deal with sounds like a cheapskate.

 

As for the prices for ASEs, you have to remember your state's sales tax. If the exemption limit is $1,000, then you need to save your money and buy some big dealers above $1,000. Many dealers who make a business of marketing bullion coins have discount policies for larger sales. It 's not huge, but every little bit helps.

[BillJones]

As for who makes money in coins, here's my list:

 

1. Competent dealers and auction houses (tie).

2. Knowledgeable collectors who can buy well and are willing to hang on to nice coins over the long term.

3. Bullion investors who combine luck and skill. "Buy low, sell high" is a cliché, but it's the only way to make money in bullion. You have to chart the market and look for trends. Generally that means you are not buying when everyone else is, and you must be willing to jump off the horse for a profit, even if you timing is not perfect. You also have to have to guts buy when many are saying that the bullion market is "dead." Usually those who buy when everyone else is buying end up losing.

 

[Walkerfan]

I remember a friend of mine being upset, when I told him that he got 'ripped-off' when he bought a 1927 St. Gaudens NGC MS 64 for 750 from a major marketing firm and NOT a reputable dealer who would have charged him around 500---this was 15 or more years ago. Well, he held onto it and still has the piece and has MORE than made his money back. He wishes that he'd bought MORE at that price, now!! Even financial/investing mistakes can be mended in time, as it is an excellent money maker. Bill is right----just imagine how well you can do if you 'buy right'.

[GoldFinger1969]

I remember a friend of mine being upset, when I told him that he got 'ripped-off' when he bought a 1927 St. Gaudens NGC MS 64 for 750 from a major marketing firm and NOT a reputable dealer who would have charged him around 500---this was 15 or more years ago. Well, he held onto it and still has the piece and has MORE than made his money back. He wishes that he'd bought MORE at that price, now!!

 

Yup, you can get 'lucky' at times. The key is he bought a legit coin in high quality.

 

If you charge outrageous prices all of the time, then only those lucky enough to buy near a market bottom or if gold/numismatics soar will make nice $$$. The folks who bought when the market was fairly valued or overvalued will be buried.

[bsshog40]

You mean there's money to be made in this hobby?

[rrantique]

You mean there's money to be made in this hobby?

 

(thumbs u

[CoinZip]

The place where I buy charges $4 above spot for silver eagles. ($3 for maple leafs) He then buys back at 97% of spot or less.

 

 

 

Ok so how many eagles does said dealer have to sell at roughly 4 bucks profit each to make a car payment, house payment, insurance payment.......

 

The key thing to remember is the dealer is not in business for you to make money.

If the dealer can not make money the shop will close and you will have to find a new place to sell your PM's.

 

I bet if you offer to buy 1000 ounces of silver he will cut his profit margin for you.

[GoldFinger1969]

The place where I buy charges $4 above spot for silver eagles. ($3 for maple leafs) He then buys back at 97% of spot or less.

Ok so how many eagles does said dealer have to sell at roughly 4 bucks profit each to make a car payment, house payment, insurance payment.......

 

This is similar to a post I had on PennyLady's thread asking about the finances of dealers travelling to coin shows (I deleted it at her request, may create another thread elsewhere).

 

On the one hand, we want good prices as close to spot as possible (or FMV, if a numismatic coin).

 

OTOH, if dealers aren't making any good $$$, they won't carry good inventory.

 

BTW, is there any count of how many official coin dealers there are in the country ? I'm going to say off the top of my head 5,000 ? I'm talking someone who does it full-time and has a store OR goes to several shows a month with multiple cases of inventory.

[Nutmeg Coin]

Collections bought, right place, right time, right, highest offer.

 

Slim margin coins like bullion become a customer service vehicle for other things.

 

I was at Laurel City in Winsted today and he with his 50 years of experience, buying/selling, and professional methods has been occasionally to make serious money. Precious metals are the bulk of his business with numismatics a close second. The big profits fund the later transactions of low profits.

[James_OldeTowne]

There have got to be dealers out there who will pay melt or slightly more for ASEs. The guy you deal with sounds like a cheapskate.

We pay close to $2 over melt for them.

[GoldFinger1969]

We pay close to $2 over melt for them.

 

Who's we ?

[Walkerfan]

We pay close to $2 over melt for them.

 

Who's we ?

 

The Scotsman Coin & Currency.